Wall Street spent Friday doing something it hadn’t done in a while. |
Second-guessing its favorite trade.
The Philadelphia Semiconductor Index officially entered a bear market, falling more than 20% from its June high after three straight days of selling.
The catalyst: expectations. |
TSMC beat. Samsung beat. Earnings season has started stronger than expected. |
Then China’s Moonshot AI unveiled one of the world’s largest open AI models, oil jumped more than 4% as fighting in the Middle East intensified, and investors suddenly found plenty of reasons to lock in profits. |
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⚡ Closing Bell:
→ Dow Jones: ▼ 0.77% to 52,146.42 › Blue chips retreated as the AI-driven selloff spread beyond semiconductors, overshadowing another strong batch of earnings.
→ S&P 500: ▼ 1.01% to 7,457.69 › The benchmark posted its first weekly loss in three weeks as investors rotated out of AI leaders and rising oil prices added a fresh inflation concern.
→ Nasdaq: ▼ 1.40% to 25,520.24 › Tech led the decline for a third straight session as the Philadelphia Semiconductor Index officially entered bear-market territory, down more than 20% from its June record.
→ Russell 2000: ▼ 0.42% to 2,962.22 › Small caps held up better than the major indexes, suggesting investors weren’t abandoning the broader market as much as they were cutting exposure to the AI names that had led this year’s rally.
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Macro Moves:
→ 10-Year Treasury Yield: ▼ 4.55% › The benchmark yield slipped as investors sought the safety of government bonds amid a broad equity selloff and escalating tensions in the Middle East, even as oil prices surged.
→ 2-Year Treasury Yield: ▼ 4.14% › The policy-sensitive two-year yield eased as traders continued to expect the Fed to leave rates unchanged this month, with cooler inflation data outweighing fresh geopolitical risks.
→ Dollar Index (DXY): ▲ 100.76 › The dollar was little changed as safe-haven demand from the U.S.-Iran conflict offset this week’s softer inflation data, leaving the index lower for the week overall. |
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❗❗❗ Looking Ahead:
Next week, Alphabet gets a chance to defend the AI trade. |
The Google parent reports earnings on Wednesday, with investors watching one number more closely than revenue: AI spending. After semiconductors officially entered a bear market this week, any hint that hyperscalers are slowing their data-center investments could ripple across the entire AI ecosystem. |
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#TRUTH:
❗❗❗ ❝ A river cuts through rock, not because of its power, but because of its persistence. ❞
~ James N. Watkins |
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Bloomberg calls it "a dire shift of fortunes for America" and The Wall Street Journal calls it a "New World Order." Now, Dr. David Eifrig – a 40-year market veteran who traded through Black Monday and has recommended more than a dozen triple-digit winners – warns that you must make one of the most important financial decisions of your lifetime today.
He strongly recommends this ONE step to potentially secure your retirement. |
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Too Many Believers. |
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The Philadelphia Semiconductor Index officially entered a bear market this week, falling more than 20% from its late-June high after its biggest weekly drop in over a year. Yet even after the selloff, the index is still up more than 60% in 2026. |
That’s what makes this decline different. |
Goldman Sachs says leverage had quietly been building across the market through margin borrowing, leveraged ETFs, and short-dated options. When one of Wall Street’s most crowded trades starts falling, investors using borrowed money often have little choice but to sell—turning an ordinary pullback into a much sharper one. |
The good news? |
Not everyone is running for the exits. Options data suggests many traders are already buying the dip, while others are simply rotating into different sectors rather than abandoning stocks altogether. |
Sometimes the biggest risk is everyone owning the same good business.
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The Launch Test. |
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SpaceX scrubbed its first Starship test flight since going public after several engines failed to ignite, triggering an automatic launch abort just before liftoff. Elon Musk said the company hopes to try again within the next few days. |
On paper, Flight 13 was designed to test launch, stage separation, an offshore booster landing, and the deployment of 20 next-generation Starlink satellites. |
For investors, though, the mission was about something else entirely. |
Wall Street wasn’t looking for a perfect launch—it was looking for evidence that Starship can become a repeatable business. |
JPMorgan says the real milestone isn’t simply reaching orbit. It’s how quickly the same second stage can be inspected, refurbished, and flown again. If SpaceX can dramatically shorten that turnaround time, every launch becomes cheaper, Starlink becomes more profitable, and Musk’s vision of hundreds—eventually thousands—of annual flights starts looking financially realistic. |
A delayed launch makes headlines. |
A reusable rocket is what builds the business. |
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The IPO Speed Bump. |
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Last week, Apple sued OpenAI, accusing the company of building its new hardware division using confidential Apple trade secrets and alleging that more than 400 former Apple employees now work at the AI giant. Apple also reportedly sent legal warning letters to dozens of former employees as it gathers evidence. |
OpenAI has denied wrongdoing. |
But even if the company ultimately wins, the timing matters. |
Major IPO candidates spend months convincing investors they’re ready for public markets. A high-profile trade secrets lawsuit introduces uncertainty—potential legal costs, management distractions, and fresh questions about corporate governance—all issues investors scrutinize before buying into a new listing. |
The lawsuit may not stop OpenAI from going public. |
It could make getting there a little more complicated.
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Gains & Pains: |
Gains:
→ Lucid (LCID): ▲ 13.93% › EV stocks rallied after Lucid unveiled a lower-priced Gravity SUV trim, fueling hopes it can broaden demand and accelerate deliveries. |
→ SELLAS Life Sciences (SLS): ▲ 12.26% › Biotech shares surged after the company reported encouraging clinical progress for its cancer immunotherapy pipeline. |
→ Oruka Therapeutics (ORKA): ▲ 11.63% › Investors continued piling into the biotech name as optimism around its inflammatory disease treatments lifted the stock to another strong gain. |
😬 Pains:
→ Intuitive Surgical (ISRG): ▼ 14.15% › Investors focused on management’s warning that insurance coverage changes may delay procedures, overshadowing an otherwise solid quarter. |
→ Cadence Design Systems (CDNS): ▼ 9.47% › Chip-design software names sold off alongside semiconductor stocks as investors questioned the pace of AI infrastructure spending. |
→ Netflix (NFLX): ▼ 7.26% › The streaming giant fell after issuing a weaker-than-expected earnings outlook, despite reporting quarterly results.
🔥 Most Active: |
→ Ondas (ONDS): ▼ 1.88% › The drone technology company led trading volume as investors reacted to heightened defense and infrastructure themes. |
→ American Airlines (AAL): ▼ 3.97% › Airline stocks came under pressure as oil prices surged to a one-month high, raising concerns about higher fuel costs. |
→ NVIDIA (NVDA): ▼ 2.21% › The AI leader extended its losing streak as the semiconductor index officially entered bear-market territory. |
→ Intel (INTC): ▼ 2.00% › Shares slipped ahead of next week’s earnings, with investors looking for signs that AI infrastructure spending remains intact after this week’s chip rout. |
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Escapes: |
Luray Caverns 📍 VA 🇺🇸 |
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Commodities Check : ✔️ |
→ WTI Crude: ▲ 4.48% to $82.49/barrel › Oil jumped to its highest level in more than a month after the U.S. and Iran expanded attacks on critical infrastructure, raising fears of prolonged supply disruptions. |
→ Gold: ▲ 0.99% to $4,009.19/oz › The precious metal climbed back above $4,000 as investors sought safety during Friday’s equity selloff, though it still posted its biggest weekly decline in six weeks. |
→ Natural Gas: ▲ 1.85% to $2.91/MMBtu › Prices rebounded on expectations for stronger cooling demand and higher LNG exports, while crude’s 4% rally provided additional support. |
→ Soybeans: ▲ 0.67% to $12.03/bushel › Soybeans climbed back above $12 after the USDA confirmed fresh export sales to China, Mexico, and other buyers, while strong soybean oil demand added support. |
→ Wheat: ▲ 1.19% to $6.83/bushel › Wheat extended this week’s rally as drone attacks in the Black Sea raised concerns that grain exports from one of the world’s key agricultural regions could face renewed disruptions. |
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The stinger: |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
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Disclaimer |
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills. |
This publication is for informational and educational purposes only. It does not constitute investment, trading, or financial advice and is not based on any individual’s financial circumstances, goals, or risk tolerance. We are not registered investment, stock, or commodity advisors. Always consult a licensed financial professional before making investment decisions. |
Information provided in this newsletter (and on any affiliated website) is obtained from sources believed to be reliable; however, accuracy and completeness cannot be guaranteed. Opinions expressed are those of the authors and are subject to change without notice. |
From time to time, this publication may include sponsored content, affiliate links, or advertisements. Such inclusions do not constitute endorsements, and any compensation received does not influence the analysis or opinions presented. TradingLessons is not affiliated with, nor does it verify or guarantee the claims, products, or services of any sponsor or advertiser. Readers should perform their own due diligence before engaging with any advertised offerings. |
Nothing herein should be interpreted as an offer, recommendation, or solicitation to buy, sell, or trade any security, commodity, derivative, or other financial instrument. This content is intended solely to highlight market developments and educational insights to help readers enhance their understanding of trading and risk management.
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