Unsurprisingly, the US 10-year yield rebounded to erase all of the post-announcement decline, while the 30-year also retraced around half of its post-announcement decline. The idea that Washington is willing to buy back debt instead of adapting its fiscal policy and slowing debt growth, while exerting increasing pressure on Federal Reserve (Fed) policy, didn’t sound as great once reality sank in as it did in the first hours after the announcement.

Zooming out, the latest news will likely only reinforce the de-dollarization trade that’s already in place. Foreign entities like central banks, finance ministries and sovereign wealth funds’ aggregate holdings of US Treasuries fell to some 12% from roughly 40% during and after the subprime crisis, leaving the market increasingly reliant on price-sensitive private investors. The US’ deteriorating geopolitical relations and the loss of confidence due to the lack of fiscal discipline have been among the reasons behind the waning appetite. The latest news could further reinforce that loss of confidence.

Anyway, with the short-lived enthusiasm around the Treasury’s announcement, sellers returned to the market and sold risk as crude oil kept climbing on Middle East jitters. Nothing surprising here. What’s new is that rising oil prices no longer support the US dollar, as the traditional dollar support associated with higher energy prices is being outweighed by selling pressure due to other – US-specific – factors that highly displease investors.

And the dollar falls. It falls as crude rises, and it falls as US yields rise. This behaviour suggests that investors are getting out of US dollars and into alternatives. The euro emerges as an interesting alternative for both reserve and funding purposes. Gold is another for value-protection purposes. The price of an ounce just cleared the 200-DMA resistance, despite rising US yields. To say the least, traditional market relationships are being challenged.

Winds change direction

Broadly, the market narrative changed this week from ‘strong earnings are pushing US and European indices to record levels thanks to an energy-, bank- and AI-led boost in revenues’ to ‘sovereign yields are rising undesirably, along with sovereign debt, and the whole thing is increasing borrowing costs and will end up pressuring earnings expectations and weighing on valuations’. The latter is here to stay as long as oil prices and yields keep climbing.

This week, US retail earnings pointed to a US consumer base that is becoming increasingly price-sensitive and selective, but still spending enough to avoid signalling recession. For the Fed, that cooling could help ease demand-driven inflation, provided elevated oil prices don’t squeeze consumers further... Unfortunately, no one can guarantee the latter. And no one can guarantee that the Fed is looking at inflation anymore... What’s the point.

Robotonomics

Unitree – the company that produces the so-called kung fu robots that are all over social media – they dance, they fight, they tidy up, they do a whole bunch of stuff, and cost from around $13’500 for the G1 humanoid - went public in Shanghai IPO on Wednesday.

Unsurprisingly, the IPO drew record demand, valuing the company at more than 200 times its sales at the end of the first day of trading, when the stock price soared 460%. The shares fell on Thursday, before stabilising this Friday.

On a smaller scale, this IPO looked just like SpaceX’s a few weeks earlier in the US, valuing future dreams more than today’s fundamentals. This is why we could see a further drawdown in the price without a clear support target on the downside. I mean, at more than 200x sales, you’ve got a long way to adjust to the downside.

But beyond the euphoria, humanoid robots are seen as the next big wave of AI. Morgan Stanley expects the humanoid market to surpass $5 trillion by 2050, with more than 1 billion humanoid robots potentially in use worldwide by then – a billion of these digital dudes!

China is the world champion in humanoid robots for now: Chinese manufacturers accounted for more than 97% of global humanoid robot shipments in the first half of 2026, while the US lags far behind China in terms of shipments. Other Chinese and US companies, including Tesla, which is one of the most famous US names in humanoid robots with its Optimus, are willing to get their share of the cake in such a promising market.

But as with all new – and complex – technologies, the timeline for perfecting the product – so that it can serve real-life purposes and allow mass adoption – remains pretty unclear. Companies that can achieve reliable real-life use and performance, and attractive returns on investment in large-scale industrial and commercial deployments, will be the winners. In this sense, China’s integrated supply chains, capacity to scale up production and government support will play in its favour against US peers.

Unitree’s spectacular first day also put the spotlight on Tesla and its Optimus project, while Roundhill’s Humanoid Robotics ETF – with a ticker that reads HUMN (I find it brilliant) – has fallen sharply since mid-August. Now, that ETF doesn’t only include pure robotics companies; it also gives exposure to the broader robotics and embodied-AI value chain, which, in the medium run, is certainly an interesting mix for investing in robotics and its vertical chain, for those who are ready to shoulder volatility due to high valuations across the industry.

Volatility?

The VIX has been very low recently, while sectors within the S&P500 have printed pretty big intraday moves, especially if we look at price moves across technology. If you have been wondering how come the latter moves never showed up in the VIX, well, one of the reasons is that companies moved in quite a disconnected manner on individual factors. That lack of correlation offered an overall stable picture for the index.

The thing is, that could change if upward pressure on oil prices and yields remains intact and/or grows, deteriorating the macroeconomic setup for most companies at the same time. The latter could increase volatility, hence the risk of a further selloff at the index level.

With the strong earnings story already baked in, I believe that it’s time for a deeper correction. Next week, Nvidia will close the dance with its own Q2 earnings. At this point, I doubt that the company has the potential to move oceans, nor to reverse the quietly building selling pressure. But you never know.