A Torn Market Under Geopolitical Thaw, but Short Squeeze Is the Real Fuel Behind Semis
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A lot of friends have been asking me lately what I think about SpaceX. What's there to overthink? Is there even a substitute on Earth right now?
Lifted by the prospect of a U.S. to Iran peace deal, all four major indices closed green, but the internals were badly torn. SPX and Nasdaq were strong, pushing to intraday highs before pulling back only slightly to close near the highs of the session. The Dow sold off into the close, and the Russell went out at the highs of the open then sold off all day: open at the peak, grind lower. That divergence tells you the macro tailwind isn't lifting all boats evenly; money is selectively going long.
The deal details themselves are a Rashomon story, both sides' media spinning different versions. But the market trades the most direct variable: crude. With the Hormuz blockade likely to lift, traders dumped the geopolitical risk premium accumulated during the conflict, and oil crumbled to around $83. That price is still about 20% above pre-war levels, but the energy sector (XLE) was the lone loser down over 3%. From breaking below $90, it now faces the indignity of testing $80. If crude decisively breaks key support, the energy sector's interim top is confirmed. That is the market's most prominent macro headwind right now.
I kind of miss Powell. He still owes me money.
The focus this week is unambiguously Wednesday's FOMC meeting and new Chair Warsh's first press conference. The market broadly expects rates on hold. The real question: will the Fed strip the easing bias from the statement, or even reshape expectations by raising the inflation outlook and publishing a hawkish dot plot?
One institutional shift is worth noting. Reportedly, Warsh favors reducing Fed communication, believing excessive speeches have triggered unnecessary market hype and interpretive chaos. That stylistic shift means future Fed policy signals will be more ambiguous and far less useful as guidance for investors. Since the central bank's jawboning may be self-neutered, instead of parsing the dot plot word by word, you're better off spending more time on price action and actual fund flows.
Despite rumors of certain AI models being restricted, the Philadelphia Semiconductor Index (SOXX) and the hardware-equipment sub-sector stubbornly printed new highs, with hyperscale data centers and related concepts helping the Nasdaq charge higher. But Goldman's liquidity report exposes the core engine of this strength: short squeeze.
The numbers show that in strong sub-sectors like semis, the ratio of short covering to outright new long buying was as high as 4.7 to 1. In other words, short covering, not incremental fundamental buying, is doing the heavy lifting. Across the 11 GICS sectors, nine saw net selling of single names last week, with IT, communication services, and consumer discretionary leading the net-selling board; only financials and industrials saw net buying. This kind of severe divergence between sub-sectors and the broader market is a warning sign. Once the squeeze completes, names without fundamental support are vulnerable to sharp corrections.
SpaceX extended its post-IPO madness, two-day cumulative gains eye-popping, with aftermarket still grinding higher on inertia. Musk's commentary about 2030 trillion-dollar revenue was just a catalyst; the core logic is the extremely low float. Only about 4.2% of total shares are actually tradeable, so longs can lever a huge market cap with very little capital. This "race against time" tactic is producing an unreasonable ramp.
The intraday structure is also shifting subtly. Turnover fell from 93% on Day One to 46%, suggesting plenty of chips have moved from short-term speculators to holders sitting on lockup-watching. The intraday float has been washed fairly clean. For momentum chasers, Tuesday's potential options listing is the key node. It doesn't just bring hedging tools; it brings high-leverage exposure, and that will further amplify an already violent two-way move. As for where the top is, never try to guess; follow the time window and watch how the order flow absorbs it.
NVDA is planning a $2.5 billion investment-grade bond, drawing order book interest of $85 billion; the 10-year tranche priced just 75 bps over Treasuries. Some market voices question whether they're short of cash. That's a misread. With NVDA's AA credit rating and ample cash on the balance sheet, this issuance is textbook capital-structure optimization.
The logic is clean: borrow at extremely low cost, preserve own cash for high-return investments in AI infrastructure, chip R&D, and M&A, and retain the capacity for large-scale buybacks. This is not balance-sheet deterioration; it's the Apple-style "borrow to buy back" playbook, using equity leverage to amplify shareholder returns. The stock is stuck in a sideways patch in the short term but has clear support in the $199 area; the bond issuance also implies management's implicit incentive to defend market cap.
American Express (AXP) recently spent $700 million in cash to acquire The Fork, a European restaurant network, expanding its global high-end restaurant partnerships to 75,000. The deal was struck at roughly 3x price-to-sales, reasonable, but the revenue impact on AXP's scale is limited. The real value is in deepening the core moat: irreplaceable perks and experiences for premium cardholders.
Versus Visa and Mastercard, AXP has long carried a valuation edge, growth around 12% to 15%, but the market's historical forward PE has consistently been on the low side. Technically, the stock pushed above the $330 strong-resistance zone today; remaining overhead sits at $335 to $344 and $351 to $366. Once digesting and clearing that opens a path back to the prior high of $385. For capital seeking relative value in payments, AXP, momentum up, structure intact, deserves a spot on the watchlist.
Disclaimer: This article is personal market observation and trading review only, not investment advice. Markets carry risk; trade with caution.