20.07.2026 - Regime Change
Monday's trading session marked the beginning of the typical summer lull, but beneath the quiet surface, market behavior appears to be changing.
Geopolitics: Iran signaled it remains open to continuing discussions with the United States, leaving the door open for diplomacy. At the same time, attacks continued, while maritime traffic through the Strait of Hormuz remains severely restricted by both sides.
Technology
Alphabet announced it is developing a new AI server chip designed to run its Gemini models more efficiently, aiming to improve performance while reducing costs.
Meanwhile, AMD unveiled Helios, its first full AI rack system intended to compete directly with Nvidia. Microsoft confirmed it will deploy Helios racks in its Azure data centers, joining Meta, OpenAI and Oracle as early customers.
Markets:
Equities: Technology try to rebound after last weeks sell-off.
Bonds: Uptilt, US 10y yield around 4.58%, Japan 10y yield 2.71%
Commodities: Oil prices starting the week lower, with WTI around USD 82/barrel and Brent around USD 88/barrel
Precious metals: sideways, gold at USD 4’010/oz, silver trades near USD 57/oz
Currencies: USD strengthened
Cryptos: sideways - Bitcoin falling back to USD 64k
Volatility: The VIX index falling back towards 18
My View: Markets reacted only briefly to the latest geopolitical headlines before giving back their gains. That increasingly short-lived reaction suggests investor sentiment may be starting to shift after months of buying every dip.
This changing market behavior is worth paying close attention to.
Only a few weeks ago, headlines such as renewed diplomacy with Iran or major AI announcements from Alphabet and AMD would likely have fueled gains throughout the trading session. Today, those rallies fade within hours.
The same pattern can be seen in oil. Prices initially fell on diplomatic headlines but quickly recovered as investors recognized that the underlying supply risks remain unresolved. Maritime traffic through the Strait of Hormuz is still heavily disrupted, while military activity continues despite renewed discussions.
Markets appear to be transitioning from an environment where every positive headline was rewarded to one where investors are becoming far more selective and cautious. Historically, these subtle shifts in market psychology often mark the beginning of a new regime.
Last week, semiconductor stocks suffered their worst weekly performance in more than a year. Naturally, many investors are asking whether this is a buying opportunity.
My answer remains no.
I continue to believe investors should keep their hands off. Despite the recent pullback, valuations remain demanding, positioning is still crowded, and growing questions are being raised about whether the enormous AI investment cycle can justify current expectations.
In my view, this is not a falling knife to catch, it is a knife that has only just started to fall.
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