Investors are pivoting away from heavy spenders in the artificial intelligence sector, opting instead for chipmakers as the market awaits Micron’s upcoming results. This rotation coincides with a hawkish shift in Federal Reserve interest rate expectations, with markets now fully pricing in a September hike and a better-than-even chance of a second increase before the end of the year. Global sentiment remains fragile; South Korea’s KOSPI index retreated nearly 10% overnight, pressured by the persistent weakness of the won.

Currency markets reflect this broader volatility, with the yen hovering near 40-year lows despite recent Bank of Japan rate adjustments. While U.S. officials remain in contact with Tokyo regarding currency stability, the strength of the dollar continues to dominate. Meanwhile, energy markets are cooling, with Brent crude dipping toward $77 per barrel as supply flows through the Strait of Hormuz normalize following the U.S. decision to waive certain sanctions on Iran.