Here's what you need to know.
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⚡ **Why This Is Urgent Reading: Updated 8 April 2026** Since this session was recorded, the US and Iran have agreed to a two-week ceasefire (7 April). Iran will reopen the Strait of Hormuz. Markets reacted immediately: S&P 500 futures rose over 1.6%, Nasdaq 100 futures surged 1.8%, and oil dropped sharply from around $117 to ~$93 per barrel. Everything Li Chye covered in this session: oil dynamics, precious metals, the Fed's inflation dilemma, and where opportunities lie in a market shift, is now playing out in real time. Read on with that context in mind.
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On 28th February, US and Israeli airstrikes on Iran killed Supreme Leader Khamenei, escalating a conflict that has now closed the Strait of Hormuz, one of the world's most critical oil transit routes.
The consequences have rippled fast:
Meanwhile, Donald Trump has threatened military action to reopen the Strait of Hormuz. Iran has rejected the ultimatum. The situation remains unresolved, and could escalate.
On the trade front, tariffs introduced under "Liberation Day" 2025 were ruled illegal by the Supreme Court, but the Trump administration activated backup Section 122 tariffs (10–15%), expiring July 2026. A new Section 301 probe has been launched against 80 nations to check for forced labour and unfair trade practices. More tariffs could follow.
Bottom line: Inflation has two simultaneous accelerants: oil and tariffs. This is not the environment central banks were hoping for heading into 2026.
Since the conflict began, capital has been flowing into the US dollar. Emerging markets, especially net oil importers like Japan and South Korea, have seen funds exit.
Globally, a record US$7.8–8 trillion is now sitting in money market funds, earning risk-free returns at the current Fed rate of 3.75%. Investors are waiting. Watching. Holding cash until clarity returns.
This is important context: the money hasn't disappeared from the system. It's parked. When uncertainty clears, rotation back into equities could be fast, and selective.
Despite the noise, a longer-term lens reveals a clearer picture.
| Market | 10-Year Average Annual Return |
|---|---|
| NASDAQ 100 | ~43.61% |
| S&P 500 | Positive, currently in pullback |
| China (CSI) | ~2.18% |
| Hong Kong (HSI) | ~2.28% |
| Malaysia (FBM KLCI) | Recovering from long downtrend |
The NASDAQ 100 and S&P 500 are currently in correction mode, driven by war uncertainty and inflation concerns, not fundamental collapse. That distinction matters.
China's market remains a tale of two halves: state-linked enterprises rallying while private sector tech (Alibaba, Tencent) faces headwinds from a slow domestic economy, unresolved property crisis, and weak consumer spending.
Malaysia's FBM KLCI is quietly outperforming relative to the global sell-off. Why? Political stability has returned after years of turbulence, attracting foreign capital. Malaysia is also an oil and palm oil exporter, both benefiting from elevated energy prices. And crucially, with Middle East data centres struck by Iranian drones and missiles (including an Amazon facility), Southeast Asia, and Malaysia specifically, has emerged as a Tier 1 alternative destination for data centre deployment, accelerating projects in Johor and the broader region.
The AI sector is entering a new phase, one that separates hype from durable value.
SaaSPocalypse: Agentic AI is disrupting traditional software companies that once commanded premium margins due to limited competition. That moat is eroding. Software ETFs have sold off as the market reprices their future profitability. Some companies are adapting; others face real structural threat. The key is knowing which is which.
ROI Fatigue: The four hyperscalers: Microsoft, Meta, Google, Amazon, have collectively committed close to US$600 billion in AI infrastructure. Investors are now asking: can they earn it back? Nvidia, despite posting strong earnings and record orders, saw its stock fall 4.2% post-results. Even great earnings aren't enough when sentiment shifts to "show me the returns."
What's still structurally sound:
The short version: structural AI demand is intact. Near-term hype is fading. Companies with durable business models are getting caught in an indiscriminate sell-off, which, historically, is where opportunities are found.
Even in uncertainty, capital rotates, it doesn't vanish. Here's where Li Chye sees potential:
Energy & Petrochemicals — Oil and gas companies, fertiliser producers, and related petrochemical side products benefit from elevated oil prices.
Precious Metals — Gold has pulled back due to a stronger USD. But if the Strait of Hormuz situation resolves, a reversal could follow, especially given sustained central bank accumulation (China, Russia, Poland, Malaysia).
Memory & Storage — SSD and HDD companies remain positioned for data centre growth. Sell-offs have been indiscriminate; quality names in this segment could be worth monitoring.
Power & Infrastructure — Data centre buildout continues globally, including sovereign AI infrastructure. US power grid shortages create tailwinds for utilities and infrastructure providers.
Critical Minerals — Copper, silver, rare earth, secured under US national security strategy. Demand from AI, EVs, and defence is structural.
Selective Defensives — Consumer staples companies with strong US-domestic revenue, good cost control, and resilient supply chain management may hold up better than the sector average.
"The stock market is forward-looking; it recovers not when things get better, but when things can't get worse."
Li Chye drew the parallel to COVID: markets turned before the vaccine was approved, before the lockdowns ended. Signs to watch for: significant bad news that fails to push the market lower, or a surge in buying despite negative headlines. These are often early signals that funds are rotating from cash back into equities.
This blog is for educational purposes only and does not constitute financial advice. Beyond Insights is an educational institution and does not provide buy/sell signals or manage client funds.
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