Rekt Mkts: Oil jumps, AI stocks sell off

Well oil is higher again and the weekend AI headlines haven't helped tech. S&P futures are down about 0.8% and Nasdaq about 1.7%, while crypto majors are modestly green. Memory is getting sold in Asia...we could be in for a rather "fruity" start.

Saudi Arabia has shut a key pipeline that bypasses Hormuz, adding another supply disruption to the oil market. Brent is near $108 this morning. Gold hasn't been catching a bid alongside it, with spot gold down about 0.5% near $4,330 earlier today. Friday's CPI numbers were largely in line, despite the core MoM number coming in 0.1pp ahead of expectations. Not a huge core surprise, but hike expectations have moved higher. As we've been discussing, the FOMC is the next big decision on Wednesday, with CME pricing putting the chance of a hike at roughly 86-87% in this morning's reporting. 10Y is near 4.98%, up about 3bps on the day, and the 30Y little changed near 5.35% but sitting at the highs....heading into the FOMC at levels that are somewhat historic at least in the backend.

Dario's weekend call to slow development of the most advanced AI models is the big story for chips, with Sam Altman also suggesting an OpenAI IPO this year would be ill-advised. It's a bit of a weird one because on the face of it these guys are essentially now talking AGAINST their own books, which leads to the belief that there is potentially some legitimacy to what they're saying. Alternatively, there is a school of thought which suggests that they cannot keep up the pace of spending to compete with open-source models, and that this call has the intent to quash their development while giving OAI/Anthropic more time to reign spending - either way, I don't think this is a good headline for memory stocks or AI-related stocks. Hynix and Samsung fell in Korea today, with KOSPI closing down about 3.3%. The US hasn't opened yet, but Nasdaq futures are pointing to a much weaker start than the S&P. This is reaching the listed AI supply chain rather than staying a debate between the labs. I took advantage of mis-priced weekend equity perps to flatten out all of my memory risk in MU, SNDK and SK Hynix and actually leaving myself a little bit net short coming into this week...if you trade stocks actively and haven't gotten involved in stock perps you def should coz incredibly I think it's a rather slow-to-react market even on perps reflecting trillion-dollar companies.

Majors are a little firmer this morning. BTC and ETH are both up about 1.5% over 24H, SOL about 2% and HYPE roughly 2.6%. I have a meaningful ETH perp long in the book, altho this is still a modest move rather than a big rebound. Clarity has a fresh development ahead of tomorrow's Senate procedural vote. Lummis, Boozman and Scott released their final draft with revised ethics language and a role for state attorneys general in enforcement. Lummis says Trump has agreed to the restrictions on officials and their spouses. There's also a stablecoin circuit-breaker aimed at protecting community banks from deposit flight, plus a civil safe harbor for non-custodial developers. The developer protections aren't a blanket exemption from criminal money-transmission law. Tomorrow's vote would open the way to debate, not make the bill law - my 2C here is that we could get some positive commentary over the next 24H as it sounds like everyone is scrambling to do what they can to make this more of a reality. Knee-jerk reaction IMO is that it would be good for majors, then we see what follows. Arc is the other upcoming onchain event: Circle's published plan is for public mainnet on Wednesday, with USDC used for gas and infrastructure for stablecoins and tokenised assets. Personally I am treating this with caution and just got a feeling that something so telegraphed with people ready and willing to ape never quite works out like it should (compared to Robinhood which was mostly dismissed by everyone). Robinhood chain itself saw a significant slowdown over the weekend with most coins down 30-50% back towards their local lows. My gut here is that there is a large amount of UPNL on social apps like FOMO which must be neutralised first in order for onchain activity to progress higher, that comes from either i) people selling ii) prices going lower -> ie both point towards being cautious. Good luck today.