Geopolitical risks remain live. While Monday's futures gains suggest investors are willing to look past the latest U.S.-Iran exchanges, the situation is fluid. Oil prices have swung between gains and losses, and any escalation that threatens supply routes could quickly reverse the risk-on mood. The Cboe Volatility Index eased to 18.21, down 2.98%, but remains elevated relative to levels seen earlier in the year.
The chip rebound has rekindled a familiar debate: whether the latest sell-off is a buying opportunity or a warning sign. Contrarian investors point to Micron's management stating the memory market will stay tight beyond 2027, and to the fact that global chip sales hit a record in 2025 with AI-related silicon accounting for roughly half the total. Yet the PHLX Semiconductor Index remains deep in correction territory, and the earnings gauntlet ahead leaves little room for error.
The question now is whether Big Tech earnings can validate the AI demand narrative that has driven this year's rally, or whether the bar has been set too high for even strong numbers to satisfy.
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