The seven days to 1 July

The seven days in review

• Equities are in a broadly constructive mood driven by AI demand optimism and macro tailwinds from lower oil, while crypto is experiencing an independent and accelerating bearish narrative centered on technical breakdown and institutional demand erosion.
• The most notable sentiment shift is the divergence between Solana, which is the only crypto asset posting both positive price action and above-median sentiment, and Bitcoin and Ethereum, which are both under pressure from distinct but reinforcing bearish themes.
• Treasury markets are absorbing a new and high-momentum narrative around Fed leadership transition that has not yet visibly disrupted equity sentiment but warrants close attention.

Arguments fading

• Silver Industrial Demand Price SupportBullish

Leading narratives

• Alphabet's weakness is dragging down the Dow Jones despite strength in other…Bearish

• The small-cap rally is fundamentally sound and sustainable, not a short-squeezeBullish

• Small-Cap Long-Term Outperformance CycleBullish

  Sources highlight the structural case for small- and midcap outperformance, pointing to historical evidence such as the Russell 2000 gaining 22% in the first half of a recent year while outpacing…

• A risk-on rotation is driving money out of defensive sectors into growth and…Bullish

• Strong earnings growth expectations for FY27 and FY28 combined with healthy…Bullish

• The breadth and depth of the small-cap rally is historically exceptional with…Bullish

• The Dow Jones is outperforming with its biggest quarterly gain since 2022 and…Bullish

  Sources highlight that the blue-chip Dow Jones is on track for its strongest quarterly performance since 2022, with the index also poised for a third consecutive monthly gain.

• The artificial intelligence investment cycle will create sustained growth…Bullish

• Revival in M&A and capital-raising activity will drive investment banking fee…Bullish

What to watch

Earnings season commentary from hyperscalers and semiconductor names will be the critical test for whether the AI capex sustainability narrative accelerates further. The NDX bearish earnings theme is already at +172% momentum, and any guidance language around spending discipline or demand softness from major cloud providers could rapidly shift the dominant AI demand narrative that is currently the primary equity sentiment anchor.