After a remarkably successful initial public offering for AI chip firm Cerebras Systems (CBRS), stock markets will open down on Friday morning trade.
Cerebras traded as high as $385 just after trading started on Thursday. The demand was so strong that the exchange temporarily halted trading. Unfortunately for the AI suppliers and the rest of the world, the hyperinflation for memory chips is a red flag. Corporations mentioned memory pricing over 550 times, according to the Daily Chartbook on Bloomberg.
The stock market faces three macroeconomic headwinds. They are bond yields, China/USA summit results, and energy prices. The 10-year bond (IEF) gained 50 bps since the Iran invasion began. It rose from below 4.00% to around 4.577%.
Oil prices are not pricing in the impact of the Strait of Hormuz still shut down. For now, Exxon Mobil (XOM) and Chevron (CVX) will trade in a range. If WTI crude prices rise quickly, those two oil and gas integrated firms will break out.
The market will weigh in on the outcome of the U.S. President’s meeting with China’s President Xi. Heavily worrisome for markets is whether the U.S. would come to Taiwan’s aid if China attacked it.
Your Takeaway
Watch the Nasdaq (QQQ) today. NVIDIA (NVDA), Micron (MU), Intel (INTC), and AMD (AMD) are vulnerable to profit-taking. If selling accelerates near today’s close, selling pressure might continue next week.
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