Focusing on trading, only discussing valuable insights! Hello everyone, I’m Evan, welcome to this episode!
Yesterday, the three major US stock indexesopened slightly higher but collectively declined. By the close, the Dow fell by 1.34%, the S&P was hit by a 1.57% drop, and the Nasdaq plummeted by 2.03%. The main reason for the decline wasa broad weakening in large-cap tech stocks, dragging down the overall market trend. In fact, from a technical perspective, divergence at the top among the three major indices has been present for some time, signaling that upside potential is fairly limited, leaving us in a situation where declines are more likely than gains. Today's release ofJanuary's CPI data, whether good or bad this time,I remain cautious about the later performance of US stocks. If there are signs of a rebound, it would be wise to take profits at higher levels.
Yesterday’s profit-taking was mainly driven by a profound shift in the market's perception of AI technology - transitioning from its initial role as a growth engine to an AI anxiety as a disruptor of business models.However, the concentrated outbreak of this widespread anxiety yesterday, leading to a broad market decline, was triggered by Cisco's earnings bombshell and lowered guidance. Although its revenue barely met market expectations, its full-year guidance for 2026 was significantly below the consensus forecast. As a key supplier of global enterprise network infrastructure, Cisco's weak performance was interpreted by the market as a clear signal: amid the wave of AI investments, companies are increasingly directing their limited budgets towards core AI infrastructure like computing power and chips, while postponing upgrades for traditional network hardware. This 'AI crowding-out effect' made investors realize...
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