--- title: "It's Monday again, let's look at the two main themes affecting the market." type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40211869.md" description: "Last week, both major US stock indices hit new closing highs again; however, the Dow Jones Industrial Average actually fell by 0.16% and was down for the entire week. This means it's not a market where all assets are rising together, but rather funds are continuing to concentrate in technology, AI, and semiconductors. This is also what I think is most worth discussing today: the market is not without risks now, but is re-choosing what to believe in (this sentence was actually mentioned last week). The biggest variable last week was still the Middle East. Expectations for US-Iran negotiations have been fluctuating, with the Iranian Foreign Minister arriving in Pakistan, but it's still uncertain whether genuine negotiations with the US will happen in the short term. The reason the market can still rise is not because geopolitical risks have disappeared..." datetime: "2026-04-27T04:47:12.000Z" locales: - [en](https://longbridge.com/en/topics/40211869.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40211869.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40211869.md) author: "[聊美股的Vivian](https://longbridge.com/en/profiles/16202247.md)" --- # It's Monday again, let's look at the two main themes affecting the market. Last week, both major US stock indices hit new closing highs; however, the Dow Jones Industrial Average actually fell by 0.16% and was down for the entire week. This means it wasn't a market where all assets rose together; instead, capital continued to concentrate in technology, AI, and semiconductors. This is also what I think is most worth discussing today**: The market isn't without risk now; it's in the process of re-choosing what to believe (this was actually mentioned last week)**. The biggest variable last week was still the Middle East. Expectations for US-Iran negotiations fluctuated, with the Iranian Foreign Minister arriving in Pakistan, but it remains uncertain whether genuine negotiations with the US will happen in the short term. The market could still rise not because geopolitical risks disappeared, but because investors began to believe there was a window for conflict de-escalation. The S&P 500 and Nasdaq hitting new highs were primarily driven by three things: **the potential for US-Iran talks, Intel's surge boosting semiconductors, and the rebound in rate cut expectations after the Department of Justice ended its investigation into Powell**. But don't forget, oil prices didn't fully cooperate with this optimistic script. WTI crude rose 14% for the week. This level indicates that while risk appetite has superficially returned to the market, the geopolitical premium hasn't been fully cleared. So my judgment of the current market is simple: indices can hit new highs, but that doesn't mean risks have been resolved. What truly supports US stocks isn't the peace expectation itself, but the fact that earnings season has given the market a reason to keep buying AI. The most typical case this week is Intel. Intel surged 23.6%, Arm rose 14.76%, AMD gained 13.91%, and the entire semiconductor sector remained strong. Intel used to be the most disliked old company in the AI rally, but now it's suddenly being repriced by the market. Essentially, it's not that people suddenly like CPUs, but that as AI transitions from training to inference, the market is starting to realize that data centers can't rely solely on GPUs. CPUs, memory, power supplies, networking, packaging, and cooling are all being pulled back into this chain. Texas Instruments' earnings also verified this. Its Q1 revenue was $4.825 billion, a 19% year-over-year increase, with EPS of $1.68, significantly above expectations. More importantly, data center customer sales surged 90% year-over-year. This shows that AI demand isn't just staying with NVIDIA and cloud providers; it's spreading to more foundational, traditional chip segments. But the problem is also here: when everyone is buying AI, the market becomes increasingly fragile. Goldman Sachs reminded us last week that the market cap weight of AI-related companies in the S&P 500 is already close to 45%, much higher than the 25% at the end of 2022. In other words, the current S&P 500 is, to some extent, almost becoming half an AI index. This is crucial for retail investors. Because when the rally is strong, concentration amplifies gains; but once earnings fall short of expectations, or if AI capital expenditure is re-questioned by the market, the drawdown will also be amplified. I won't say the AI rally is over now; on the contrary, I think the AI theme is still intact and clearer than before. DeepSeek continued to lower API prices over the weekend, and model inference costs keep declining. This will further stimulate inference-side applications but will also force the market to rethink a question: who will actually make money in the future? The model companies, the cloud providers, the chip companies, or the companies selling infrastructure and security capabilities? So my approach going forward isn't to chase all tech stocks, but to watch two lines. The first is whether earnings can continue to prove that AI demand is real. Focus on cloud revenue, CapEx guidance, data center orders, and free cash flow. If companies talk about exploding AI demand while their cash flow is eaten up by CapEx, the market will eventually ask: when will this money actually come back? The second is not to just focus on the hottest stocks. Semiconductors have already risen a lot, and it wouldn't be surprising for them to keep surging in the short term. But the more this happens, the more one needs to be wary of chasing highs. Compared to mindlessly buying the strongest performers, segments that haven't been fully hyped yet—like memory, advanced packaging, data center power, networking, and security—might be more worth continuing to track. My own strategy remains unchanged: keep core tech positions, but don't increase positions after consecutive big rallies. What I fear most now isn't missing out, but forgetting all the risks after seeing indices hit new highs. The AI theme is not the problem; the problem is entry points and position sizing. In summary, to sum it all up, the answer the market gave last week is: geopolitical risks are still there, but as long as the negotiation window isn't closed, capital is willing to keep buying AI; the earnings season has just begun to validate demand, and semiconductors have re-emerged as the strongest theme. But at this stage, blind excitement isn't suitable; it's more suitable to clearly see who is truly benefiting and who is just being lifted by sentiment. The above content represents personal views only and does not constitute investment advice. 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