Oracle and the AI trade, plus how to play the software sector

Market Overview - The Dow is down over 150 points, approximately a third of 1%, while the NASDAQ has shown slight gains [2][3] - The Russell 2000 index is experiencing a pullback of about half a percent after recently reaching record levels [3] - Bond market yields have decreased slightly, with a notable downward trend leading up to the Federal Reserve's rate cuts [4][5] H1B Visa Fee Impact - President Trump has announced a one-time $100,000 fee on H1B visas, which could significantly impact American tech companies and trade relations with India and China [9][12] - The H1B visa program is crucial for the tech industry, with approximately 83,000 workers receiving these visas annually, predominantly from India [12][13] - Initial confusion regarding the fee structure has been clarified, indicating it is a one-time charge rather than an annual fee [10][11] Semiconductor Sector Insights - Micron is set to report earnings, with expectations high due to its recent performance and its role in the AI market through high bandwidth memory chips [42][51] - The semiconductor sector is mixed, with some companies like Nvidia and Broadcom trading lower, while others like TSMC and ASML are performing better [7] - The overall semiconductor market is experiencing a shift, with AI demand potentially softening traditional cyclical trends [46][48] Oracle Leadership Changes - Oracle has announced the departure of CEO Saffer Katz, who will be replaced by co-CEOs Clay McGu and Mike Siccilia, while Katz transitions to executive vice chair [34][36] - The leadership change comes amid Oracle's involvement in the TikTok deal, which is expected to enhance its role in data security and cloud services [38][61] Economic and Trade Relations - The U.S.-India trade situation remains tense, with ongoing tariff discussions and the recent H1B visa fee announcement adding to the strain [14][15] - The administration's approach to tariffs and trade negotiations is causing a disconnect between market performance and job losses in sectors like manufacturing and agriculture [20][21][22] - The political implications of tariffs are significant, with a majority of Americans expressing concerns over rising costs associated with these trade policies [25][27]