Yesterday’s session was doomed from the start, as Middle East headlines and higher crude oil prices spooked buyers. As a result, only defensive sectors finished higher. The artificial intelligence (AI) destruction trade is back, landing software (IGV) - and data-based businesses on the top decliners list.

Let There be Light             

Optical stocks are doing great, and they aren’t supposed to really rock and roll until 2027. Yesterday, Goldman Sachs (GS) upgraded its global optical module market forecast: +33% in 2026, +81% in 2027, and +115% in 2028.

Conversely, memory names stalled after coming out of the gate with gusto. I suspect some see them as the 2026 bottleneck play, but their run rate goes past 2030.

Headlines & Markets

There is no doubt the Iran Conflict is lingering longer than anyone thought, but credible evidence shows the U.S. is controlling more of the Strait of Hormuz, and more ships loaded with crude oil are making it through.

Media coverage, however, makes it feel like Iran is winning, and they are not. Even when they launch a “wave” of attacks and they all miss, the story is crafted as a victory. I don’t think the Fed should consider current oil prices in its next rate decision.

This conflict will end on terms that are favorable and make the world safer.

Today’s Session

The market is set to open under pressure again as the ten-year bond yield (TNX) moves above 4.80%.

At 11:00, Treasury Secretary Bessent will announce the size of his bond buyback plan and has already warned the bond market not to bet against him.

Lots of compelling news in the world of AI, including Meta Platforms (META) releasing its personal AI Agent, Muse. Two major technology conferences are happening right now, with nothing but amazing news pointing to long-term opportunities.

We’ve seen moves in individual names, but the broader market is still taking its cue from bond yields, which could signal the Federal Reserve’s next move.