The early answer is: it could be another blip.

Tech stocks rebounded in the US session as dip-buyers rushed in, continuing the now-familiar dip-rushing behaviour – which essentially prevents dips from developing into healthy valuation resets. In this context, the Nasdaq retreated a bit more than 5% from its June 3 peak following a 33% rally since April, while the S&P 500 fell a bit more than 3% over the same period. We can't really call this dip-buying. Buyers are simply jumping on the back of a bull at the slightest opportunity.

Yesterday's occasion was the news that Iran and Israel would stop bombing each other after a bomb-filled weekend. The latter pulled crude prices lower, along with yields. US crude consolidates near $90pb this morning on hopes that the latest ceasefire will hold. I can't stop myself from thinking that it won't.

So, to me, risks remain two-sided. We could see a further pullback in the short run, but in the medium run, believing in an easy peace looks like wishful thinking.

The big question is: how much longer can this market run on AI steroids?

No one has the answer, but the latest data warns that global oil reserves have now dropped to operational stress levels. Come September, reserves could fall to the operational floor level – the minimum required to keep pipelines functioning and refineries operating.

Pricing across energy and risk markets is largely ignoring the energy crisis. The risk is that the rally stops when there is no more fuel.

For now, there is enough fuel in investors' minds – at least for technology. Marvell Technology – yes, the one that Jensen Huang said could become the next trillion-dollar company – rose more than 9% yesterday after the announcement that it would enter the S&P 500 late Friday.

South Korea's Kospi index rose nearly 8% today, with SK Hynix jumping as much as 13%. A day with a rise or fall of less than 5% in the Kospi has become rare – a sign of just how volatile this market has become and, therefore, how much of the move is driven by speculation. Indeed, the Kospi's volatility index keeps rising to unbelievable levels, suggesting that when the music stops, there will be carnage.

Anyway, today we continue to observe the tech-versus-non-tech narrative play out – technology attracting flows while non-tech pockets of the market lag behind.

The news that OpenAI has also reportedly filed for an IPO is masking the ugly K-shaped economy, where the technology and technology-related parts of the economy are doing well, shareholders are doing great, while the rest of the market and employees struggle with rising borrowing and living costs.

That also explains why investors can't drop out of the market: the abyss below looks far worse than the risks above.

Look, economic data yesterday showed that German factory orders dropped 3.8%, more than expected, mainly due to a more than 11% drop in orders from the euro area. Meanwhile, benchmark European 10-year yields rose on the back of higher oil prices during the European session, weighing on the Stoxx 600. But that was before the peace news crept in.

Alas, peace hopes or not, Europeans are losing hope as the European Central Bank (ECB) prepares to announce its first rate hike in almost three years. With limited exposure to technology, European indices are condemned to wait for the end of the Middle East conflict to claim their share of the cake. For now, cyclicals remain largely in the rear-view mirror.

As such, the EURUSD is falling out of favour against a broadly stronger US dollar, despite relatively hawkish ECB expectations. The 1.15 level could act as a solid floor to the Iran-led weakness if tensions in the Middle East ease and oil prices fall sustainably. If not, even ECB hikes may not prevent the pair from slipping below the 1.15 mark as the euro area's growth outlook deteriorates under the pressure of the energy crisis.

Elsewhere, the USDJPY consolidates near the critical 160 level as traders hold their breath to see if and when Japanese officials will step in.

The Australian dollar is stronger on the back of a broadly softer US dollar, but also due to strong import growth from China, showing that both Chinese exports and imports rose 20-30%, respectively, in May. China's CSI 300 was better bid today, while appetite for Hong Kong's tech-heavy Hang Seng Index lagged behind Taiwanese and Korean peers.

I continue to believe that the Chinese tech rally will pick up momentum, with AI infrastructure and physical AI shouldering the next leg higher across Chinese technology names. But Chinese capital markets must wait their turn when there are so many exciting US companies preparing to go public, starting this week.

Speaking of that, the SpaceX IPO was reportedly oversubscribed, hinting that we will likely see a strong first-day rally. That will almost certainly be followed by a period of valuation reset. What happens next will depend on the revenue outlook.

Google, for example, has just signed an eye-watering deal under which it will reportedly pay $920 million per month to SpaceX for 32 months to rent AI compute capacity.

As such:

To tell...