Recently, I noticed a rather interesting market phenomenon. Last week, the situation in the Middle East continued to heat up, and Iran’s highest leader made his position clear that the Strait of Hormuz must not return to pre-war conditions, which directly hit the energy market. WTI crude oil ended its previous four-day winning streak; on Friday it fell 2.19% to $94.88 per barrel. At the same time, the US Consumer Confidence Index dropped sharply: the University of Michigan’s April consumer confidence final reading was only 49.8, the lowest level since June 2022. The impact of heightened war-driven inflation concerns is indeed becoming apparent.

But the response from the US stock market is interesting— the three major indices moved in different directions. The Dow edged down 0.16%, the S&P 500 rose 0.8%, and the Nasdaq gained 1.63%, with all of them hitting new record highs. The Philadelphia Semiconductor Index continued to surge, up 4.3%, extending a streak of 18 consecutive trading days and setting the longest run of consecutive gains on record. Intel has been particularly strong this week: its share price jumped 23.6% to a record high. In an interview, Executive Vice President Kevork Kechichian candidly said that Intel is undergoing a transformation at a historic level, and the next two years are a window that will determine success or failure. He mentioned that internally they are already seeing the usage ratio of CPUs to GPUs doubling and even tripling, and that ultimately this ratio will reach 1:1, sending a strong demand signal. NVIDIA also broke through a market cap of $5 trillion, underscoring just how hot AI chips are.

However, there are voices calling a different tune. The big short seller, Brayer, recently posted a bearish view on the semiconductor sector. He has already established a SOXX put options position and said outright that the current rally lacks fundamental support and is driven more by technical factors. He believes that if you currently hold semiconductor stocks with a long position, you should consider selling. Baker Hughes’ chief financial officer expects the Strait of Hormuz may not fully recover until the second half of the year, meaning energy supply tightness will likely persist.

From the data, Bitcoin is up 0.93% over the past 24 hours, currently at $77.34K; Ethereum is up 0.82%, currently at $2.13K. In Europe, stocks are generally under pressure, with shares in the UK, France, and Germany all falling. The Deputy Governor of the Bank of England for Financial Stability also warned that there are substantial risks in the current market, but asset prices are at historical highs; global markets are likely to see a correction at some stage. This week, Microsoft, Amazon, Alphabet, and Meta will all release their quarterly earnings reports, and these figures will be key points to watch going forward.