US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.com 

A rising USD/CNH is the strongest threat to US stocks because it would spread China's deflationary spiral to the US and the AI/semiconductor bubble. It matters more than the dollar, yields or oil, if USD/CNH first bottoms at its monthly 200-period average. x.com 

US large-cap equities stay a buy because an uninterrupted AI narrative is strong enough to overcome adverse macro developments. Core inflation in the high 2s or low 3s is not a big risk; stocks, the Fed and a sideways 10-year yield show little concern. As long as AI capex is not slowing, macro remains a dominated risk. A pullback is overdue, but its likelier catalyst is AI-related, such as a megacap like Meta cutting capex or open models reviving ROI questions, which would change the view. x.com  … Show more

Cybersecurity stocks' large run-up is at risk from a cheaper, open Chinese AI model. ValsAI reports that DeepSeek V4.1 Flash 1017 beat GPT 6 Sol on its offensive cybersecurity task; DeepSeek is far cheaper to run than a closed US model. x.com 

AI productivity and agents mean fewer jobs, less spending and lower future tax revenue while concentrated US equities reach all-time highs. That recession risk is not priced in. x.com 

US stocks broadly are undervalued because most of AI's economic value flows to the businesses consuming tokens, not the token producers. AI agents do tasks far more cheaply than human labor, so value creation exceeds value capture by 50:1 or more, lifting aggregate earnings. S&P 500 earnings growth should accelerate beyond historical norms, in step with model labs' revenue. 2026 EPS revisions already outpace the norm, inflecting as Claude Code spread in January, even with CAPE at 42x. x.com  … Show more

US stocks should be getting hit hard, because the AI bubble they depend on has no good outcome and invites government intervention. Those who know the most about frontier AI are terrified of it. If AI works as intended, it is a societal disaster that replaces tens of millions of workers; if it is only a moderate productivity improver, the investment is hard to justify economically. You cannot bet on the end of the world, but you can bet on government slamming on the brakes. x.com  x.com  x.com 

The S&P 500's concentrated, correlated AI exposure makes a large allocation too risky as rates rise. Higher rates could force data-center bondholders to sell AI equities; early AI use appears to be stagnating and unclear ROI may cap demand even if usage grows linearly. Failed lab IPOs or a credit-driven recession could also undermine the market. AI moving on-device or on-premise is another significant risk to data-center capacity demand. x.com  x.com 

US large-cap stocks are set for a catch-up trade after the biggest, best companies fell 15% or more on a manufactured conflict that is now irrelevant, even as AI usage exploded and their numbers kept rising. The Nasdaq 100 is up only 4% this year and the S&P 500 2%, less than Claude's inflection since December alone is worth. x.com  x.com 

Semiconductor demand could withstand slower OpenAI and Anthropic growth if open-source models and post-training add more chip demand than it removes. Falling token prices need not erode per-GPU economics as cost per token falls and output per GPU rises, potentially keeping rental rates firm. The balance is unresolved; the lean is bullish, but markets may focus on the easier-to-see slowdown. Shares could chop until numbers defeat the bears, or a well-founded bear case could trigger heavy selling. … Show more