Dow Posts Its Worst Week In Six Months; Crypto And AI-Capex Calls Keep The Bid
Daily Wrap
Analysis
The week under new Fed Chair Kevin Warsh closed with a rate hike at the FOMC, and Yahoo Finance points to stubbornly expensive cell phone plans as one of the everyday inflation items that helped build the committee's case. The damage showed up in the Dow, which wrapped the stretch with its worst week in six months as yields stayed elevated and oil firmed; JPMorgan stacked the warning pile with a stark $100-crude scenario, and Bank of America sketched a 2022-style rerun in which the policy rate ends up north of 5%. Yet the index's own price target from BofA for the S&P 500 twelve months out - 7,800 - implies only about 2% of further upside, telling investors the debate is now about where from here rather than whether the index keeps going higher. Friday's tape favored the crypto complex and the AI-buildout names. Strategy (MSTR) jumped 16.39% to $153.92 on 54.7M shares, Bit Digital added 15.39%, Marathon (MARA) rose 13.75% to $13.24 on 84.3M shares, Coinbase (COIN) climbed 11.66% to $194.25, and SBET, BTBT, KEEL and GLXY all finished up more than 10% - even though Bitcoin still trades below the $81,000 area that JPMorgan compares against its gold-relative $266,000 fair value. With miner production costs around $78,000, the rally is squeezing the break-even zone for the weaker operators. In chips, Sandisk (SNDK) surged 10.99% to $1,791.82 ahead of its S&P 100 debut on Monday, the same day Nike exits that index, and IBD's premarket scan flagged Robinhood, Sandisk, AMD and Moderna as pressing into buy zones. The AI-capex story kept compounding: UBS now expects roughly $1 trillion of AI spending this year heading to $1.4 trillion by 2027, Micron flagged shortages running through 2027, and HPE is being modeled about 34% below fair value on fresh AI demand. The weak end of the tape was violent and small-cap. TPC collapsed 80.49% to $16.71 on just 170k shares, XENE gave back 30.69% to $39.75, SION fell 16.99% to $5.96, and KRRO and GENI dropped 15.08% and 12.96% respectively. The 2,593-symbol tech scan leans red - 24 bearish reads against 15 bullish - and Moderna printed an overbought flag at $154.04 even while making IBD's buy list. Sentiment risk around the megacap AI engines is real too: Sam Altman conceded the industry has been doing a poor job of explaining its benefits as public backlash grows, Kevin O'Leary warned how fast concentrated equity books can give back gains when the tape turns, and IBM's 31-year dividend-growth streak is still losing to the price level. Bright spots persist - Berkshire is scaling Alphabet into one of its biggest positions after its roughly 9,000% ascent since going public, Anthropic's IPO is approaching, Goldman lifted Affirm's target, and Intel's Terafab partnership energizes its foundry story - but the net picture is a market grinding ahead on AI and crypto momentum while classic blue chips (Apple -0.26% at $336.13, Disney 47% off its high, Walmart well short of a $1T valuation) fade behind it.
Highlights
- The bitcoin complex owned the board: MSTR +16.39% to $153.92, MARA +13.75% to $13.24 on 84.3M shares, COIN +11.66% to $194.25, with five miners up over 10% even with BTC still under the $81k zone
- UBS lifted its AI capex outlook to nearly $1 trillion this year and $1.4 trillion by 2027, while Micron warned of shortages lasting through 2027 - a double fuel for the chip names
- Sandisk added 10.99% to $1,791.82 on its Monday S&P 100 debut (Nike exits the same session), and IBD flagged Robinhood, AMD and Moderna as moving into buy zones into the open
Lowlights
- The Dow closed out its worst week in six months on elevated yields and firmer oil, with JPMorgan warning about a $100-crude path and BofA sketching a 2022-style rerun with rates above 5%
- Small caps got clobbered: TPC crashed 80.49% to $16.71 on thin 170k-share volume, XENE shed 30.69% to $39.75, SION fell 16.99%, and KRRO dropped 15.08%
- Netflix (NFLX) slipped 4.67% to $71.79 after Wells Fargo cut the stock to sell and slashed its target to $57 on softening engagement
Bull News
- Berkshire Hathaway's Buffett-Abel regime is scaling Alphabet into one of its largest holdings after the stock's roughly 9,000% climb since it went public - a quality name with fresh money behind it
- AI-infrastructure catalysts are stacking: Anthropic's IPO looms, HPE is modeled about 34% below fair value on fresh AI demand, and Intel's Terafab partnership refreshes its foundry ambitions
- Technicals in the crypto and storage corner turned green: the MSTR/MARA/COIN surge plus SNDK's 10.99% jump into its index debut, with IBD's scan catching HOOD, AMD and MRNA in buy zones
Bear News
- The Warsh-led Fed hiked this week, BofA floats a 2022 rerun with the policy rate above 5%, and JPMorgan's $100-oil warning plus elevated yields keep pressuring dividend payers and rate-sensitive names
- Sam Altman admitted the sector has been poor at making its case as backlash builds, and Kevin O'Leary warned that concentrated equity positions can unwind fast when momentum reverses
- Everyday inflation is sticky: rising phone bills helped push the Fed to tighten, IBM's 31-year dividend streak still trails the price level, and Disney sits 47% below its all-time high with Walmart well short of $1T
The market enters the open with a genuinely mixed mix: a hawkish Fed under Warsh, a six-month-worst Dow week, and BofA's 7,800 S&P 500 target implying only about 2% of remaining upside, set against a momentum bid that is rotating hard into crypto proxies (MSTR +16.39%, MARA +13.75%, COIN +11.66%), the storage/memory index shuffle (SNDK +10.99% into its S&P 100 debut), and AI-buildout earnings power (UBS's ~$1T capex path, Micron's 2027 tightness, HPE's 34% upside case). Breadth is the caution: 24 bearish reads versus 15 bullish across the 2,593-symbol scan, a -80.5% TPC collapse signaling how fast small caps de-rate, and Moderna's overbought tag at $154.04. Constructive posture for the AI/ bitcoin-momentum corner into Monday's index changes, but the rate-hike backdrop and thin upside room argue against chasing the stretched megacap laggards.