The Fed concluded their latest meeting today without changing the headline interest rate. The details, however, showed that the decision was far from unanimous with three members voting for a rate hike. This paints the picture that rate hikes could be coming later this year. Even though there could be hikes, the average consumer is still feeling pinched so we don’t expect much scope in terms of rate changes. This should mean that for now the Fed isn’t the biggest driving factor for the markets.
The big worry that we have had is a potential AI bubble. So far, on this front we have relatively good and surprising news. The semiconductor index has fallen by more than 25% in July alone, with some of the biggest stars like Sandisk and Micron approaching and even surpassing a 50% fall. Over the same period, the S+P and the Dow Jones haven’t even fallen 2%. Chip stocks could continue their plummet as they still haven’t erased even their 2026 gains, but as of yet, the fact that they haven’t contaminated the broader market is a very welcome sign.
Our portfolios have been pretty protected from the chip fall so far, so no changes need to be made at this time. If we continue to see prices in that area or other areas improve we will go bargain hunting. As of right now, we feel the risk outweighs the potential reward.