July 16, 2026

Markets:

U.S. equity futures are modestly lower this morning as investors digest another round of earnings and continued weakness across the semiconductor sector.

Chip stocks are under pressure globally. Taiwan Semiconductor is lower in premarket trading despite delivering another impressive quarter that included beats on both earnings and revenue along with stronger guidance. Investors instead focused on higher capital spending plans over the next several years, leading to another post earnings selloff in a major AI leader.

The weakness extended overseas as SK Hynix dropped sharply in South Korea, weighing on semiconductor stocks across Europe and the broader technology sector.

Despite today's pullback, the broader market continues to benefit from easing inflation data and solid corporate earnings. Yesterday's softer producer price report reinforced expectations that inflation continues to cool, while strong results from major financial companies helped support confidence heading into the heart of earnings season.

This morning, investors will be watching retail sales and weekly jobless claims for additional clues on the strength of the U.S. economy and the path of interest rates.

Nvidia also continued expanding its AI ecosystem, announcing Cosmos 3 Edge, a new world model designed for robotics and vision based AI applications. The company continues to push beyond traditional AI infrastructure into physical AI, another reminder that investment across the AI landscape remains very much intact.

Portfolio:

We begin today's session holding positions in TSLL and TQQQ. 

This week's rotation has favored software and diversified technology while semiconductors have absorbed the selling pressure. That rotation has been frustrating, but we've seen this movie before. Capital rotates quickly, and leadership often shifts just as sentiment reaches its weakest point.

Netflix reports earnings after the close today, and next week earnings season accelerates with several of the market's largest companies reporting. We believe this is where leadership becomes much clearer and where some of the best opportunities of the summer begin to emerge.

One technical factor worth remembering is that Friday marks July options expiration. Dealer positioning that has helped pin the major indexes throughout much of the month begins to roll off, which often allows volatility and directional movement to expand. That could create a very different trading environment heading into next week.

The stocks we're watching most closely include MU near the 850 level, MRVL, META, and MSFT. We are also monitoring a potential short term opportunity in DELL.

Our overall outlook has not changed. We continue to follow institutional positioning, and it has kept us on the right side of the larger trend throughout this market. While the recent action has been frustrating, we believe patience will be rewarded as earnings season unfolds.

Stay patient, keep your exits in place, and be ready for updates throughout the session.