Finally the market agrees AI will have an impact and disrupt certain industries while benefiting others. It's confusing why the market questions capex when hyperscalers' quarterly results are the best in years and cloud computing growth is 35-48%.

Selloffs like this happen 1-2 times a year and present opportunities. Be careful. Opportunities: 1) Hyperscalers (Microsoft, Amazon, Google) with multiple revenue streams and pricing power. 2) Mega-caps with little AI exposure like Apple - a defensive tech play that doesn't need capex. 3) For private investors, stick to the tech index; it's hard to pick individual winners.

All labor market data (ADP, Challenger, claims) shows it is slowing down, not collapsing. This will lead to further easing of wage inflation. Tariff-related inflation pass-through has reduced, and a base effect in H2 will pull inflation down. The Fed will cut rates; they have the right reasons. Kevin Warsh brings uncertainty as a former hawk who opposed QE; his policy won't be clear initially, leading to volatility.