Falcon’s View – Week ending 24 July 2026

S&P 500: −0.61%
NASDAQ 100: −1.62%
My portfolio: + 0.1%

Market pulse

U.S. equities finished the period lower, with technology again underperforming the broader market. The S&P 500 declined from 7,457.69 to 7,411.98, a loss of 0.61%, while the NASDAQ 100 fell from 28,592.66 to 28,128.34, a decline of 1.62%. The technology-heavy index therefore underperformed the S&P 500 by 1.01 percentage points. The stock portfolio declined by approximately 0.5% in SEK, roughly matching the S&P 500 and outperforming the NASDAQ 100 by about 1.1 percentage points. The portfolio received some currency protection from the dollar, which appreciated approximately 0.64% against the Swedish krona during the period.

The dominant market driver was a change in how investors interpreted the AI capital-expenditure cycle. Alphabet reported its first negative quarterly free cash flow, burning $5.9 billion despite Google Cloud revenue increasing 82%. The company simultaneously increased its expected 2026 capital expenditure by $15 billion. Tesla also reported negative free cash flow and sharply higher investment requirements. Alphabet subsequently fell approximately 7% on Thursday and Tesla 14.5%, while Meta and Amazon declined in sympathy. The market was no longer asking only whether AI demand was strong. It began asking whether revenue could grow quickly enough to exceed capital expenditure, depreciation, financing and operating costs.

The technology shock coincided with another increase in geopolitical and inflation risk. Brent crude settled above $100 a barrel on Thursday and U.S. crude above $92 as fighting involving the United States, Iran and the Houthis threatened shipping through both the Strait of Hormuz and the Red Sea. The ten-year Treasury yield approached 4.7%, its highest level since January 2025. Higher oil prices threatened household spending and corporate margins while also reducing the Federal Reserve’s ability to lower interest rates. The combination of weaker technology sentiment, higher energy costs and rising yields produced Thursday’s broad selloff.

The final weekly losses nevertheless conceal a powerful early-week semiconductor rebound. On Tuesday, the Philadelphia Semiconductor Index rose 5.2% as investors bought back shares following the previous week’s sharp correction. Micron gained 12.2%, and other memory, storage and AI-infrastructure companies rallied strongly. The buying reflected both oversold conditions and fear that investors had reduced their semiconductor exposure immediately before potentially strong technology earnings.

That rebound partially reversed on Friday. Intel fell 7.9%, the semiconductor index declined 4.5% and the NASDAQ Composite lost another 0.64%, even though the S&P 500 edged 0.05% higher. Oil fell nearly 4%, providing some support to consumer, real-estate and other rate-sensitive shares, but investors continued selling semiconductor and AI-related positions. The same hyperscaler spending that had supported chip demand earlier in the week was now being interpreted as possible overinvestment by the companies financing it.

The broader market was considerably more resilient than the headline technology selloff suggested. Energy shares gained approximately 3.8% over the week, while industrials, materials and real estate also advanced. This sector rotation explains much of the S&P 500’s outperformance of the NASDAQ 100. New U.S. tariffs of 10% or 12.5% on goods from 60 trading partners added a secondary inflation and margin risk, but tariffs were not the principal cause of the week’s decline. Earnings, AI spending, oil and Treasury yields were more immediate drivers.

The market’s message was therefore not that AI demand had disappeared. Demand remained exceptionally strong. The market instead divided the AI value chain into companies that receive capital expenditure and companies that must fund it. Memory, accelerators and networking suppliers initially benefited from evidence that infrastructure construction remained intense. Alphabet, Meta, Amazon and other platform companies were punished because that same construction reduced free cash flow and made the eventual return on investment less certain.

Crowd vs. price

Investor attention remained concentrated in AI, but the week exposed a significant split inside the trade. Micron, AMD rose because greater hyperscaler expenditure translates directly into demand for memory, accelerators, servers and high-speed connectivity. Alphabet, Meta and Amazon fell because greater expenditure translates into lower free cash flow, higher depreciation and greater execution risk. The same data-centre project can therefore be positive for the supplier and negative for the customer financing it.

Holdings & Watchlist Notes

Micron Technology

+8.48%

The largest part of the gain occurred on Tuesday, when the shares rose 12.2% as the semiconductor index rebounded 5.2%. Micron had been hit particularly hard during the previous correction, making it one of the clearest candidates for a mean-reversion rally once investors began restoring semiconductor exposure. Continued hyperscaler construction also reinforced expectations of strong demand for high-bandwidth memory and conventional DRAM.

There was no new Micron earnings report during the period. The movement was primarily a repricing of existing memory-demand expectations rather than a response to newly disclosed company results. The shares surrendered a substantial part of their gain on Friday when investors again questioned the sustainability of AI infrastructure spending. The clean read is that Micron rose because the preceding selloff had become excessive relative to the continuing strength of AI-related memory demand, but the stock remained highly sensitive to changes in the market’s interpretation of hyperscaler capital expenditure.