--- title: AI Valuation Reckoning Rattles Global Tech; Defensives and Small-Caps Find Shelter description: Global equity markets sold off sharply in the week to Friday 26 June 2026, as investors reassessed AI-related valuations against a backdrop of hawkish Federal Reserve signalling and sticky inflation. The MSCI ACWI fell 2.2%, with technology and semiconductors bearing the brunt of the decline — the Nasdaq 100 lost 4.2% and the iShares Semiconductor ETF shed 7.7%. The sell-off was sharpest in AI-exposed markets across North Asia, with the KOSPI and TAIEX both falling over 5%. Defensives and small-caps outperformed globally, with healthcare, insurance, and consumer staples all posting gains. 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If you made a mistake, please change here USA Country Switzerland Canada: Other than Ontario, Quebec, Alberta Canada: Ontario, Quebec or Alberta USA Other country Language Language English French German Italian I confirm Legal information This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. [Weekly Equities](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) ### AI Valuation Reckoning Rattles Global Tech; Defensives and Small-Caps Find Shelter Global equity markets sold off sharply in the week to Friday 26 June 2026, as investors reassessed AI-related valuations against a backdrop of hawkish Federal Reserve signalling and sticky inflation. The MSCI ACWI fell 2.2%, with technology and semiconductors bearing the brunt of the decline — the Nasdaq 100 lost 4.2% and the iShares Semiconductor ETF shed 7.7%. The sell-off was sharpest in AI-exposed markets across North Asia, with the KOSPI and TAIEX both falling over 5%. Defensives and small-caps outperformed globally, with healthcare, insurance, and consumer staples all posting gains. Micron's record quarterly earnings provided a late-week counterpoint, but were insufficient to reverse the broader de-rating of growth assets. [**Jakub Dubaniewicz**](https://blog.syzgroup.com/fast-food-for-thought/author/jakub-dubaniewicz) **-** **Monday, 06/29/2026** | - [![Pdf](https://blog.syzgroup.com/hubfs/pdf%20(1).png)](https://blog.syzgroup.com/fast-food-for-thought/Equity%20Weekly%203-9%20April%202026) - - - - ## **The Chart of the week** **Fading hype(rscalers) for bottlenecks** ![](https://blog.syzgroup.com/hs-fs/hubfs/image-png-Jun-29-2026-09-26-10-4433-AM.png?width=909&height=520&name=image-png-Jun-29-2026-09-26-10-4433-AM.png)Source: Bloomberg, Sherwood ## **What happened last week?**   **Global markets** From Friday 19 to Friday 26 June 2026, global equity markets endured a sharp but differentiated sell-off, driven by a sudden reassessment of AI-related valuations against a backdrop of a hawkish Federal Reserve pivot. The MSCI ACWI retreated 2.2%, with damage concentrated almost entirely in growth and technology. The week was defined less by what broke than by what held: healthcare, financials, consumer staples, and small-cap stocks all delivered positive or near-flat returns, pointing to a broadening of the market even as its most celebrated sub-sector came under pressure. The trigger was a loss of confidence in the sustainability of AI capex at current valuations. High-profile talent departures from Alphabet raised uncomfortable questions about competitive moats within Big Tech, while the structural concern was broader: combined hyperscaler capex now exceeds $450 billion in 2026, yet investors find it increasingly difficult to identify a proportionate return. This fed directly into rate anxiety — the Fed had already shifted its tone at its June meeting, signalling a possible rate increase by year-end, and May PCE data offered no comfort, with core at 3.4% YoY and headline at 4.1%. **US** The divergence within US equities was stark. The Nasdaq 100 fell 4.2% and the S&P 500 declined 1.9%, but the Russell 2000 rose 1.0% and the equal-weighted S&P gained 1.6%. The S&P 500 Value index was essentially flat while Growth shed 3.7%, underscoring the sharpest style divergence of the year so far — a configuration rarely seen outside genuine regime shifts. The technology sector dropped 5.1%, semiconductors shed 7.7%, and the Magnificent Seven fell 5.9%. The beneficiaries were strikingly defensive: healthcare surged 7.9%, insurance rose 5.3%, regional banks gained 4.9%, and consumer staples added 2.5%. The anticipated delay to OpenAI's public debut reinforced concerns about the market's ability to absorb lofty AI valuations, making capital-light defensive businesses relatively more attractive. Micron's blowout fiscal third-quarter earnings provided a partial counternarrative late in the week, but were insufficient to reverse the trend for the semiconductor complex. **Europe** European equities were not spared, though the continent's more defensive index composition cushioned the blow. The STOXX Europe 600 declined 0.9% in local currency terms, with the DAX off 1.9% and the CAC 40 losing 1.1%; the FTSE MIB underperformed with a fall of 3.3%. The UK ended the period in positive territory. European semiconductor names — STMicroelectronics, Infineon, ASMI, and ASML — all suffered significant declines as the chip sell-off rippled through the region, while defence stocks also reversed sharply amid renewed uncertainty around the Middle East ceasefire. The outperformers mirrored the US rotation: staples gained 6.0% and healthcare added 5.8%. The ECB's latest consumer survey, which showed eurozone inflation expectations falling to 3.5% for the year ahead, offered a supportive backdrop for domestically oriented names, and Swiss equities rose 2.0% on the strength of their defensive weighting. **Rest of the world** Asia was the epicentre of the week's volatility. The MSCI EM index fell 4.6%, driven by the region's heavy concentration in semiconductors and technology. The South Korean KOSPI lost over 6% as AI and memory-linked shares reversed sharply; SK Hynix briefly overtook Samsung Electronics as the country's largest company by market capitalisation before both came under heavy selling pressure later in the week, with leveraged single-stock ETFs amplifying intraday moves to the point of triggering trading halts. The TAIEX fell 5.1% on Taiwan's deep semiconductor exposure, while the TOPIX declined 3.6% and MSCI China dropped 5.9%, the latter reflecting a combination of the global tech sell-off and domestic headwinds. Brazil rose 2.5%, its commodity-heavy composition proving advantageous in a week that rewarded defensives and resources. The AI trade remains structurally intact — Micron's results confirmed as much — but the market is no longer willing to grant it unconditional valuation support. --- ## **Our view on equity** **Equity asset class** We maintain equity exposure at the upper end of our neutral allocation range. **Earnings** After a strong Q1 earnings season and upward guidance revisions, 2026 earnings expectations have been revised higher across all major regions and are now running at double-digit growth rates. Operating margins have reached all-time highs and continue to accelerate. **Valuation** Although equity prices have reached new record highs, forward P/E multiples have edged lower because EPS growth has outpaced share price gains. Valuations remain above historical averages in the S&P 500 and Nikkei, while the STOXX Europe 600 and Asia ex-Japan look relatively more attractive. **Risks** The main risk to this constructive view is a renewed rise in rates and inflation expectations, which could compress multiples and pressure valuations.   --- #### Disclaimer This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. Read More ## Related Articles [Weekly Equities](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) #### [Central Banks Deliver on a Well-Flagged Hawkish Pivot](https://blog.syzgroup.com/fast-food-for-thought/central-banks-deliver-on-a-well-flagged-hawkish-pivot?hsLang=en) Fed and BoJ hikes, an oil-driven inflation scare, and an AI-safety debate drove sector rotation across global equities over the past week. **[Jakub Dubaniewicz](https://blog.syzgroup.com/author/jakub-dubaniewicz?hsLang=en)** | 21/09/2026 [Weekly Equities](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) #### [Oil, Inflation and Trade Tensions Rattle Equities as Memory Chips Hold the Line](https://blog.syzgroup.com/fast-food-for-thought/oil-inflation-and-trade-tensions-rattle-equities-as-memory-chips-hold-the-line?hsLang=en) Global equities fell on oil, inflation and trade risk, while a Korea-led memory-chip rally offset losses in EM and rotated tech away from Nvidia. **[Jakub Dubaniewicz](https://blog.syzgroup.com/author/jakub-dubaniewicz?hsLang=en)** | 14/09/2026 [Weekly Equities](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) #### [Payrolls Surprise and Middle East Tensions Revive the Rate Hike Debate](https://blog.syzgroup.com/fast-food-for-thought/payrolls-surprise-and-middle-east-tensions-revive-the-rate-hike-debate?hsLang=en) Global equities were roughly flat over the week to 4 September 2026, as a much stronger than expected US August jobs report and renewed US-Iran tensions pushed oil prices and bond yields higher, reviving the case for a September Fed rate hike. The repricing hit European equities harder than the US, with German and French markets underperforming on rate- and energy-sensitive exposure, while banks and energy stocks outperformed globally. Within US tech, a sharp divergence emerged inside the Magnificent Seven, driven by company-specific news at Meta and Nvidia rather than a shared theme. Brazil was the standout market of the week, rallying on rate-cut expectations and firmer oil prices. **[Jakub Dubaniewicz](https://blog.syzgroup.com/author/jakub-dubaniewicz?hsLang=en)** | 07/09/2026 ## Straight from the Desk # Syz the moment Live feeds, charts, breaking stories, all day long. [Discover more](https://blog.syzgroup.com/syz-the-moment?hsLang=en) ## **Thinking** out loud Sign up for our weekly email highlighting the most popular posts. 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