US equities split the week between euphoria and exhaustion, with the bull case still intact but cracks widening in tech.
Early in the window, researchers leaned constructive: arguments centered on strong hyperscaler earnings, a persistent AI-driven supply-demand gap in semis, and forward P/Es near 21 that some compared favorably to the late-90s setup before multiples expanded further. A separate strategist case was made for small caps, citing projected 18–19% profit growth versus 14–15% for large caps and a 20–25% valuation discount. Nvidia was flagged as relatively safer within chips given lower embedded expectations.
By late week, a more cautious tone emerged. Multiple analysts pointed to a started correction — sell signals on momentum, a break of the 20-day average, and stretched semiconductor positioning after enormous gains. Downside scenarios floated included S&P pullbacks of 20–26%, further pressure on Nvidia and Tesla, and IPO lock-up risk. Offsetting that, one thread argued a Fed rate cut could spark a sharp rally, and rotation into value, quality, and energy was highlighted as the next leg.