Good morning, investors. The Federal Reserve is set to release its decision on interest rates this afternoon and it’s still up in the air on whether it will be a hike or a hold.

Wall Street is widely conflicted on what policymakers should do next.

That uncertainty seems to be trickling into markets with a deflated AI trade.

The average name in the stock market keeps climbing to new highs even as semiconductors continue to hover in bear market territory.

The equal-weight S&P 500 touched a record high Tuesday to extend its lead year-to-date over the traditional market-cap weighted index.

The recent weakness in chip stocks explain the gap, as the damage has been concentrated and increasingly severe this summer.

The iShares Semiconductor ETF (SOXX) fell 4.9% Tuesday and it’s down 20% over the last month, dragged by some of the most popular stocks of the year.

Micron, Sandisk and Western Digital shares each fell more than 7% Tuesday.

And yet, despite the recent sell-off, each of those names remain outsized winners year-to-date:

Zooming out highlights the irony of the AI trade. A stock can be in a bear market while simultaneously sitting at the top of the leaderboard.

Notably, eight of the 11 S&P 500 sectors finished higher in the last trading session, with financials and healthcare both touching new highs.

And even with the equal-weight S&P 500’s outperformance, the regular index still trades within 3% of its own all-time high.

Equal weight is on pace to beat cap weight for the first calendar year since 2022, and the rotation is arriving without any help from tech, the market’s largest sector.

For three years investors complained that the bull market was too top-heavy. The gap started closing in 2025 and inverted this year.

It just took a semiconductor bear market for most of Wall Street to notice.

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🎯 OpenAI’s Sam Altman is spending the week at the White House. The trip coincides with the Trump administration's August 1 deadline to finalize its voluntary review process for advanced AI systems and follows OpenAI's disclosure of a rogue-agent security breach. (Semafor)

🛢 Oil prices dropped for a third consecutive session. President Trump said the US is engaged in "good talks" with Iran on ending the Middle East conflict, fueling optimism that regional oil flows may normalize. (Fortune)

📉 Magnificent 7 annual cash flows have suddenly collapsed. These Big Tech names went from cash cows to offering equity and bonds to raise capital. That trajectory is expected to continue over the next two years. (Barron’s)

I sat down with Anthony Pompliano, CEO of ProCap Financial, to discuss the next stage of the AI boom, bitcoin as an under-appreciated AI play, open and closed AI models, and building CFOSilvia.

Tune in on Spotify, Apple Podcasts, or YouTube.

🗓 July 29, 2020: Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg testified together before the House Antitrust Subcommittee in the first joint appearance by Big Tech's CEOs before Congress, and lawmakers publicly declared that their companies had “monopoly power.”

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