Israel-Lebanon ceasefire, Microsoft's first-ever buyouts, Starbucks' loyalty program and more in Morning Squawk

The Nasdaq posted its worst day since March as post-earnings selling in software and tech names pulled the broader market lower, with ServiceNow down more than 17%, IBM off over 8%, and Tesla lower more than 3%. Offsetting some of the weakness, Texas Instruments surged more than 19% on AI-driven chip demand and Intel rose 27% premarket after a stronger-than-expected earnings report. Beyond tech, oil prices are softer on renewed hopes for U.S.-Iran peace talks, while Microsoft, Meta, Nike and Regeneron all announced major workforce or pricing actions.

Analysis

The clearest second-order read-through is that the market is rotating from “AI as software margin expansion” to “AI as capex and infrastructure digestion.” That is a materially different regime: software names with weaker pricing power or slower monetization now face both multiple compression and budget scrutiny, while suppliers into the physical buildout — especially analog, power, and semicap exposure — should keep earning a scarcity premium even if broad tech beta stays choppy. The divergence between TXN/INTC strength and NOW/IBM weakness suggests investors are starting to separate beneficiaries of incremental compute spend from companies whose product value proposition can be replicated faster by model-layer change.

The labor actions across MSFT/META/NKE are a hint that management teams are preemptively defending margins into a slower demand and higher AI-investment environment. In tech, layoffs are usually a lagging signal; here they may be more important as a leading indicator that opex discipline is replacing growth-at-any-cost, which can support earnings revisions later this year but also confirms that hiring assumptions were too aggressive. For software peers, that raises the bar for guidance: any sign of decelerating net retention or elongating sales cycles will now be punished more than in prior quarters.

On energy, the oil move looks tactical rather than structural, so the setup is more about headline convexity than a durable trend unless the Strait of Hormuz risk escalates again. That makes near-dated energy upside attractive on spikes, but spot-sensitive beta could reverse quickly if diplomatic headlines continue to de-escalate. The bigger macro implication is that a stable/lower oil price reduces the odds of consumer-margin compression and supports discretionary spend, which is mildly positive for names like SBUX and negative for inflation-sensitive rate assumptions.

The contrarian view is that the post-earnings software selloff may already be creating better entry points in the highest-quality names, because the market is pricing AI disruption faster than cash flow erosion actually occurs. Meanwhile, TXN and INTC’s sharp upside could tempt investors into chasing a broad semiconductor rebound, but the more durable winner is likely the picks-and-shovels segment tied to data-center power, not the cyclical chipmakers. The best trade expression is therefore relative value, not outright beta.

Key Decisions for Investors

• Long TXN / short NOW for 2-6 weeks: express the market’s shift toward AI infrastructure beneficiaries over software vendors with weaker near-term pricing power; target further multiple divergence if software guidance cracks again.
• Long INTC vs. short a software basket (NOW, IBM) into the next 1-2 earnings cycles: INTC benefits from any continued capex rotation and sentiment repair, while software remains exposed to AI substitution fear.
• Buy near-dated call spreads on XLE or integrated energy names for 2-4 weeks only if Hormuz headlines re-escalate; use as a tactical geopolitical hedge because the catalyst can reverse quickly on de-risking.
• Add selectively to SBUX on weakness over 1-3 months: lower oil and improving rewards engagement support traffic and ticket, but size modestly because consumer demand is still uneven.
• Avoid chasing TSLA strength on merger speculation; if long, prefer a defined-risk call spread rather than spot equity because the capex raise signals margin pressure and the upside catalyst is headline-dependent.