Finance
⚡Energy and Compute Scarcity Are Running the Market — and Setting Up Crypto
The Rundown: The Strait of Hormuz closure has created a 6–11.4M barrel/day oil shortfall while the semiconductor index hit a 43% premium over its 200-day average, and new Fed Chair Kevin Warsh's AI-deflationary thesis is giving cover for rate cuts that historically supercharge Bitcoin.
The details:
- ●The Strait of Hormuz closure has pushed Brent crude to $105–110/barrel, driving the global oil bill toward $5–8T annually — a supply shock of 6–11.4M barrels per day.
- ●The SOX semiconductor index rose 18 consecutive days to sit 43% above its 200-day moving average — the widest spread since June 2000 — as compute scarcity concentrates gains in a narrow cohort of winners.
- ●New Fed Chair Kevin Warsh argues AI is structurally deflationary, giving him political cover to cut rates despite 3.3% inflation; ISM Manufacturing PMI above 50 combined with easing historically correlates with crypto outperformance.
- ●Just six companies account for ~70% of S&P 500 earnings upgrades — all tied to compute or energy — while the broader index sees more downgrades than upgrades.
Why it matters: For crypto and tech investors, the macro setup described here is unusually constructive: falling rates, rising liquidity, a narrow earnings leadership concentrated in exactly the sectors that feed AI infrastructure, and a central bank chair ideologically sympathetic to tech's deflationary narrative. The semiconductor index at June-2000 levels of extension is a legitimate caution flag — that was peak dot-com — but the underlying demand (AI capex from hyperscalers) is more durable than 1999's enterprise software bets. The energy shock is the wildcard: if oil sustains at $105+, it introduces real inflation pressure that could force Warsh's hand regardless of his thesis.
📰 Source: Milk Road