Renewed Pressure From Iran Obscures Notable Software Sell-Off
I'm leaning toward profit taking as two notable software ETFs are hit with some "big news."
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On any other Friday, the software sell-off — (IGV) and (CIBR) as two ETFs — would have been big news.
Is AI becoming so effective that it continues to put pressure on software? Or do we finally, really see material benefits accrue elsewhere?
In full disclosure, for my “pick of 2026” I highlighted (INTC) . I reduced my position last week. It remains my largest single stock holding, by far, but it seemed like a good time to book some long-term gains (it was also my pick for 2025).
While I generally pay very little attention to "CONsumer CONfidence," it does deserve attention when it hits a low going back decades!
On Iran, as the U.S. starts a blockade, we could see several things happen:
- More U.S. vessels entering the strait and performing minesweeping operations. This would be very positive for markets as it would pave the way for transit to return to normal over time.
- Some form of “support” from NATO and/or the Gulf States. Anything resembling a coalition would be positive as it would put pressure on Iran.
- A very limited “blockade” would be neutral. It wouldn’t do much to put pressure on Iran, but would also leave the ceasefire in place.
- The more aggressive the “blockade,” the more risk. Iran, or one of its proxies, attacking energy infrastructure or other shipping lanes in the region would be the worst outcome for markets.
- Some sort of “accident” or increased “stress” between the U.S. and other nations (namely China and India) as a result of the blockade. If the stress gets directed at Iran to re-open talks, it could be positive. But if directed at the U.S., we could see pressure on markets (as presumably President Trump, possibly through tariffs) would put more pressure on those countries.
The wildcard is: How much economic punishment can Iran sustain? And can they sustain it longer than the administration can tolerate “affordability” issues at home?
Down 1% seems about the right response from markets until we see how it plays out.
I would lean to some profit taking here, as the bounce has been very solid, and a lot of good news on the conflict front is priced in, and increasingly, it seems some of the other stories important to the market have been ignored by the bulls.
I’m neutral on rates here. I’m neutral to slightly bearish on equities here, until we see how this “blockade” plays out.
Related: China’s Influence Rises as Beijing Becomes Unusual U.S. Ally on Iran
At the time of publication, Tchir was long INTC.
