Geopolitical Whipsaws Hit Software While Semiconductors Keep Outperforming
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All four major indexes finished lower after a volatile session. Trading was orderly in the morning, but a sudden geopolitical headline triggered a sharp midday selloff. The indexes recovered part of the decline as reports that Iran had walked away from talks and that air-raid sirens were sounding in Tehran were subsequently denied.
The weakness was not uniform. Capital is still rotating between sectors. Technology and consumer discretionary lagged, with TSLA and MSFT weighing on their respective groups. Software remained under pressure after results from ServiceNow and IBM, and IGV fell back toward 83.5. Semiconductors, by contrast, continued to attract buyers, suggesting that investors still prefer the AI hardware and compute chain in the near term.
Macro data added another complication. Initial jobless claims rose from 207,000 to 214,000, while continuing claims increased to 1.821 million, only modestly above expectations. The stronger signal came from April flash PMIs: manufacturing rose to 54, services to 51.3, and the composite to 52. Stronger growth is not inherently negative, but if goods, services, and energy prices rise together, inflation pressure can return to the centre of the market debate.
The first risk remains geopolitical headlines. Today’s intraday selloff showed that markets remain highly sensitive to developments around Iran, the Strait of Hormuz, and crude oil. With uncertainty carrying into the weekend, investors are unlikely to ignore tail risk completely.
The second risk is inflation and interest-rate expectations. Strong PMIs confirm that the economy remains resilient, but they also raise the possibility of renewed price pressure. If inflation data stay hot, valuation pressure will return most quickly to high-multiple growth stocks, especially software.
The third risk is positioning and flows. Month-end pension rebalancing is expected to generate roughly $25 billion of US equity selling. CTAs bought more than $30 billion last week, with expected buying falling to around $20 billion this week and close to zero next week if markets remain relatively stable. Continued gains will therefore depend more heavily on hedge-fund short covering and fresh long demand as systematic support fades.
IGV remains the key read on software sentiment. The group fell nearly 6%, with PLTR, CRM, INTU, ADBE, APP, and ORCL all under pressure. IGV’s pullback toward 83.5 still sits within a meaningful support zone, but the earlier breakout setup has been disrupted. I would first look for selling pressure to stabilize and for the ETF to build a base before considering another breakout attempt.
Semiconductors continue to outperform software, but positioning is increasingly crowded. After consecutive strong sessions in SOXX and SMH, the nearest useful risk levels are the lows of the recent high-volume advances: 434 for SOXX and 467–475 for SMH. A break below those levels would trap some late buyers and increase the risk of a short-term top. The next support for SMH sits near 453.
INTC reported solid headline numbers: first-quarter adjusted EPS of $0.29, revenue of $13.58 billion, adjusted gross margin of 41%, and operating margin of 12.3%. Second-quarter revenue guidance of $13.8–$14.8 billion also beat expectations. The concern is valuation. After the after-hours rally, the stock trades around 77–80x 2027 EPS of $1.00–$1.20. Near term, I would treat it as a sentiment and technical trade, with 68.8 as the nearest support.
AMD continues to benefit from the INTC report and the stronger CPU narrative, reaching roughly 330 and moving closer to the 350 concentration-trim level. This is not a bearish long-term call. It is a portfolio-management decision: investors already heavily exposed to semiconductors can trim gradually as AMD approaches 350, while those with lighter exposure can continue to hold.
MSFT reached the planned long-term add zone near 416, completing the final 4% addition and bringing the total position to 14%. I do not plan further additions. The technical structure remains constructive after the move through 430, but 397 is an important support level. A second break below 397 would raise the risk of a retest below 375. On the upside, 498–516 remains a major resistance zone, while the long-term target stays above 500.
I do not view today as a full trend break. It looks more like the first meaningful divergence after a strong rally. Buyers are still willing to step in, as shown by the partial intraday recovery. But software weakness, crowded semiconductor positioning, geopolitical volatility, and month-end flow headwinds all argue against chasing aggressively.
Software: watch whether IGV holds the 83.5 support area. A large down day by itself is not evidence that the group is ready to recover. I would want to see a base form, followed by renewed upside volume, before concluding that active buyers have returned.
Semiconductors: existing holders can stay with the trend while using SOXX 434 and SMH 467–475 as short-term risk references. A break below the lows of the recent high-volume sessions would suggest late buyers are trapped and the group is no longer unconditionally strong. For INTC, the 68.8 level is more useful for judging whether the post-earnings momentum can hold than the headline valuation alone.
Single stocks: the MSFT add plan is complete, so the position is now primarily a hold. AMD is approaching 350, where concentration can be trimmed depending on portfolio exposure. TSLA remains within its existing swing range, with no new signal. NVDA remains a watch while it consolidates.
NFLX received some support from a larger buyback authorization. The company added roughly $25 billion, which combined with the unused $6.8 billion leaves about $30–$32 billion available. If completed within a year, that could add roughly 7%–8% to EPS. Technically, 87 remains the key level. A break below it would turn the chart more bearish and reopen downside below 77, where the risk/reward could become more attractive.
Disclaimer: This article reflects personal market observations and a trading review only. It does not constitute investment advice. Markets involve risk; trade carefully.