Oil topping $100 again has increased pressure on companies' costs and interest rates ahead of the U.S. inflation data. Chip stocks are holding up despite that, but confidence in technology investment has not yet turned into a rally across the broader market.

Today I am watching two developments at once: as energy gets more expensive, it becomes harder for companies to protect profits, while AI investment is creating demand for hardware makers. The inflation data due on Thursday and Friday will be important for assessing how long this split can last.

Key takeaways

  • The strength in chips is not enough to put all technology companies in the same basket. Whether software companies can retain their customers and pricing power is a separate question; growth in AI demand alone does not answer it.
  • Gold and silver moved above yesterday's closes after the U.S. open. An energy shock may support demand for safe havens, but rising rate expectations impose another cost on gold, which pays no interest.
  • Crypto is recovering, but the conditions needed for a strong advance differ by asset. From a decision perspective, there is an important difference between Bitcoin joining the initial bounce and attracting buyers throughout the U.S. session.

What happened?

  • U.S. Central Command said that Iran had targeted an American warship on September 8 and that it had responded by striking Iranian oil tankers. Brent was above $100 in Reuters' September 9 report. Persistently expensive oil means the pressure running from transport and production costs through to consumer prices also continues; a one-day pullback does not immediately reverse that cost chain.
  • In the U.S., the semiconductor-company ETF $SMH closed yesterday at $573.73 and the software-company ETF $IGV at $102.66. Compared with their pre-holiday closes, the former rose while the latter fell. Software stocks also failed to recover after today's open, so treating the Nasdaq as uniformly strong would be misleading.
  • Technology and investment commentator Bora Özkent (@boraozkent) sees the inability to expand hardware supply as quickly as software supply as the main reason for this divergence. Expanding factory, energy and equipment capacity takes time. This view may help explain manufacturers' earnings; it does not mean that every hardware stock is cheap at every price.

What changed since yesterday?

  • In yesterday's note, the $572 threshold we were watching in chip stocks was cleared by SMH's Tuesday close. On the software side, $106 was not reclaimed. The recovery in chips has therefore entered a new phase; I cannot make the same assessment for software.
  • Bitcoin moved above yesterday morning's price; in the new assessment for Ethereum, the confirmation threshold has risen to $2,530. We should not confuse clearing the old threshold with meeting the new condition.

Market levels

Oil

  • Brent stood at $100.69 in Reuters' midday pricing. Staying above the psychological $100 threshold makes it harder for inflation pressure to ease. For more durable relief, first a move below this threshold and then the $95-$96 support zone I am watching will matter; I am not assuming oil will stop there.

U.S. indexes and technology

  • The $SPY ETF tracking the S&P 500 fell to about $763.59 after the U.S. open. The first condition for a recovery will be reclaiming yesterday's $765.14 low; above, $769.70 is resistance from yesterday's high. With a new low forming below, I am not treating the old low as a support level that is still working.
  • The $QQQ ETF tracking the Nasdaq 100 is around $716.60. The move between the $712 support I am watching and the $720 confirmation threshold continues. If it holds above $720, it will be easier for the strength in chips to spread to the index; a break below $712 would weaken the recovery outlook.
  • SMH is around $573.95, just above the previous $572 confirmation level. If this area holds as support, the next nearby resistance is yesterday's $580.57 high; if $572 is lost, the $562 and then $545 risk zones will become important again. Tuesday's strong close is positive, but the same buyers need to appear in today's pullback.
  • IGV is around $102.66, close to yesterday's finish. The first support candidate is Tuesday's low of $102.08; below that, the risk of a deeper sell-off increases. The first task for a recovery is to clear the $106 resistance, then $108. Optimism in chips does not remove these conditions for software.

Precious metals and crypto

  • The gold-tracking $GLD ETF rose to about $404.86 and moved above yesterday's $404.28 high. The first check is whether $404.28 can hold as support; $408 is resistance above. A return toward yesterday's $399.48 low would erase a large part of today's gain.
  • The silver-tracking $SLV ETF is around $60.73, above yesterday's high near $60.15. $60.15 is now a support candidate; a move back below this confirmation threshold would make $59.21 the next level to watch. For silver's strong rebound to continue, the ground gained must not fall back into sellers' hands.
  • Bitcoin is around $79,258. Market commentator Tunç Şatıroğlu (@tuncsatiroglu) is looking for $80,000 to hold at least one hour after the U.S. open; below, $78,560 is the short-term boundary and $76,685 the main support. Ethereum is around $2,510, below the new $2,530 confirmation level, while $2,380 is the main risk boundary. In both, joining the rally and clearing the required threshold are not the same thing.

Red flags

  • If inflation in non-energy items also accelerates while oil remains expensive, the case for the Fed to maintain its tight stance strengthens. In that case, even good company news may struggle to offset high borrowing costs.
  • If chip companies' orders grow while their customers' cash generation does not keep pace, investment budgets could be questioned. We should not turn a strong product cycle into an assumption of unlimited capital spending.

Calendar

  • September 10, 3:30 p.m. TRT: U.S. PPI, the producer price index. The sectors where cost increases are concentrated will matter.
  • September 11, 3:30 p.m. TRT: U.S. CPI, the consumer price index. The path of prices outside energy will determine the rate debate.
  • September 15-16: Fed rate meeting (FOMC). Inflation data will be the last important price indicators available going into the meeting.

My analysis

I view the resilience in chips positively, but for the broader market to offer more comfort I am looking for software stocks to recover as well and for energy costs to ease. For now, capital is flowing toward particular companies. That can support a selective advance; it is not enough to meet every pullback with the same confidence.

When inflation is released, I will not look only at the headline number. Separating the more persistent pressure on service prices from oil's direct effect will make it easier to understand the Fed's room for maneuver. If there is a slowdown outside energy, company profits may regain more weight. If price pressure broadens and the split within technology persists, I will draw a narrower boundary around the current optimism.

Sources

This is not investment advice; it is a research and monitoring note.