Crypto exchange facing headwinds amid market rotation away from digital assets

[US Stock Review · October 26] **Market Overview** US stocks rose across the board on Monday, with all four major indices closing higher. The Nasdaq, led by tech and internet stocks, showed the strongest performance. The Nasdaq ETF $QQQ closed at 712.20, up 1.11%, leading the four major indices; the S&P 500 ETF SPY closed at 765.37, up 0.71%; the Russell 2000 Small Cap ETF IWM closed at 276.97, up 0.44%; and the Dow Jones Industrial Average ETF DIA closed at 522.97, up 0.31%, lagging behind. This reflects capital clearly favoring growth and technology over traditional industrial and financial weights. Market breadth supported the index direction: among 106 observed stocks, 70 rose and 36 fell, with the number of advancing stocks roughly double that of declining ones, indicating the rally was not driven solely by a few mega-cap weighted stocks. Inverse leveraged products faced heavy selling pressure throughout the day; SOXS, which shorts semiconductors, plummeted 8.54%, and SQQQ, which shorts the Nasdaq, fell 3.28%. Both declined by several times the magnitude of their respective index gains, indirectly confirming limited intraday volatility and a relatively stable upward trend. **Sectors** Optical communications and network equipment stocks stood out, dominating the gainers' list: LITE surged 8.19%, being the best-performing observed stock for the day; AAOI rose 6.56%; COHR rose 5.83%; CIEN rose 4.89%; and telecommunications equipment maker NOK also rose 6.14%. In semiconductor design, ARM rose 6.19%, leading the large-cap segment within the sector. Power and energy equipment also performed well, with fuel cell stock BE rising 5.49%. Among software stocks, database provider MDB rose 4.86%. Additionally, defense stock LMT rose 5.13%, and electric vehicle stock TSLA rose 5.21%. Selling pressure concentrated on digital asset-related, consumer, and pharmaceutical sectors, diverging from the broader market trend. CRCL plunged 7.07%; cryptocurrency exchange COIN fell 2.95%; and broker HOOD dropped 2.35%, all underperforming on the same day. Streaming stock NFLX fell 2.96%, pharmaceutical stock MRK fell 3.21%, and retail stock TGT fell 2.77%. Latin American digital bank NU crashed 16.95% in a single day, making it the worst-performing observed stock, completely disconnected from the overall market rally. **Key Focus** Beyond the tape, the core issue for the market all day remained the hard constraints on computing power supply. Amazon management stated that AWS capacity for 2027 is "basically sold out." Being sold out is evidence of strong demand, but it simultaneously means that revenue for that year is no longer determined by demand, but by transformers, turbines, and when power can be connected. In an environment where the entire industry is queuing up, a delay of one quarter in construction schedules may not just be deferral; customers could easily switch to competitors who have ready-made machine slots available. The beneficiaries of this narrative align with today's relative strength in optical communications, network equipment, and power equipment stocks. Divergence in financing is also worth noting. META has filed an undisclosed-size mixed shelf registration, putting its ability to issue debt and equity on standby. Meanwhile, the bond market has significantly tightened its stance toward issuers lacking revenue sources outside of AI data centers. With long-end interest rates high, those able to secure financing are often the least cash-constrained, while those truly in need are locked out—this is a key risk point for the future AI capital expenditure narrative. In the primary market, Anthropic has filed application documents for a Nasdaq listing. Its prospectus includes risk warnings stating that its technology poses catastrophic, existential risks to humanity. While such language constitutes standard legal disclaimers, regarding the "existential risk" aspect, its practical constraint is limited and is likely to become a source of pricing disputes in the future. Regarding energy logistics, Saudi Arabia recently rented oil tanks in Singapore for storage, effectively moving spot supplies to Asian buyers' doorsteps while oil prices remain high—a tactic similar to one used over ten years ago in Okinawa. On one hand, suppliers maintain the narrative of tightening the tap; on the other, they build pipelines for the last mile for their clients. The implications of this move for future crude oil pricing power warrant long-term attention. **Summary** The day saw a broad-based rally led by tech and computing hardware, supported by market breadth, but with clear internal divergence: optical communications, network equipment, and power equipment benefiting from data center infrastructure significantly outperformed, while digital asset-related, pharmaceutical, and retail stocks faced selling pressure. The declines in two inverse leveraged products confirmed there was no significant profit-taking pressure intraday. Analysts point out that the key for the future lies in whether QQQ can hold above the 712 level and whether the number of advancing stocks can remain consistently above seventy. If the rally continues to be supported solely by a single sector while market breadth weakens, caution is advised against choppy, soft price action at highs. Divergence in sell-side target price ranges for individual large-cap tech stocks has widened significantly, reflecting that the market has yet to reach a consensus on the profitability path of AI capital expenditures.