Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How the Bull Market Shrugged Off a 1000-Point Dow Drop
Transcript
- Lucas: So a couple of weeks ago, the Dow dropped over a thousand points in a single session. Pretty dramatic stuff. But here we are, July 30, 2026, and the Dow is at 52,146, up 0.4% over the last five days. The S&P 500 is at 7,421, basically flat over the same period. Luna: That recovery is pretty striking. What caused the drop? Was it the China AI tensions we've been hearing about? Lucas: Exactly right. The trigger was the US ban on certain humanoid robot exports to China, and then Beijing threatened retaliation. Markets got spooked for about 24 hours. But since then, buyers have stepped in. It tells you something about the underlying momentum in this bull market. Luna: So the market is essentially shrugging off a major geopolitical escalation. That's a pretty strong signal. Lucas: It is. And it's not just the Dow. The Nasdaq is up 0.3% on the week, sitting at 25,061. The small-cap Russell 2000 is down a hair, but overall, the market is holding. The Fed hasn't moved rates — they're still at 3.63% — and GDP just accelerated to 24.27 trillion chained dollars. That's a solid macro backdrop. Luna: Right. So the bull market has a tailwind from the economy and steady policy. But not every stock is participating equally, right? Lucas: That's the key nuance. When you look at individual names, you see a rotation within tech. Cloudflare is up 7.6% this week, Datadog up 7.8%. Both are infrastructure plays — AI agents, cloud computing. Meanwhile, Palantir is down 0.9% and CrowdStrike is off 0.8%. The market is being selective. Luna: And yet both Cloudflare and Datadog are essentially riding the same AI wave. Why the divergence? Lucas: Well, Cloudflare and Datadog are more directly tied to the build-out of AI infrastructure. They sell tools that every AI company needs — content delivery, monitoring. Palantir, on the other hand, is more focused on government contracts and data analytics for specific clients, which might be more exposed to the China friction. CrowdStrike is cybersecurity, which should benefit from threats, but maybe investors are worried about competition or spending slowdowns. Luna: So the bull market is still betting on AI, but it's becoming a stock picker's market. Lucas: Exactly. And that's actually a healthy sign for a mature bull market. You don't want everything going up together indiscriminately. The rotation into infrastructure plays shows that investors are doing their homework. Luna: It also shows that the China threat isn't being ignored — it's just being priced in differently. Companies with direct exposure to government contracts or potential sanctions are underperforming, while pure infrastructure plays are thriving. Lucas: Right. And this kind of nuanced action is exactly why we try to cut through the noise here. We don't run ads, we don't have sponsors pushing a narrative. If our money conversations have helped you think about a decision differently, supporting the show at buy me a coffee dot com slash fexingo keeps it that way. Luna: Yeah, it's a small thing that makes a big difference. We're grateful for those who chip in. Lucas: Alright, back to the tape. Shopify had a massive week, up 9.4%. That's another example of a stock that's been volatile but is now benefiting from e-commerce momentum and AI integration. Luna: Shopify is interesting because it's not a pure AI play, but it's using AI to improve its merchant tools. So the market is rewarding companies that apply AI, not just those that build it. Lucas: Exactly. And that's a broader theme we're seeing across the market. The AI trade is broadening out from the big names like NVIDIA to software platforms that embed AI into their products. That's why Datadog and Cloudflare are surging. Luna: So what about the China cheap AI model story? There's a headline that says the US wants Asia to use its AI, but China dominates cheaper models. How does that affect the bull market? Lucas: For now, the market is treating it as a long-term competitive threat, not an immediate earnings risk. The US AI companies still have pricing power and lead in cutting-edge models. But if cheaper models erode that margin over time, we could see a reassessment. However, the current data says the GDP is growing, rates are stable, and corporate earnings are holding up. Luna: So the near-term focus is on the momentum names. And the 1,000-point drop seems like a footnote. Lucas: It does. And that's typical of bull markets — they climb a wall of worry. Every sell-off is bought. The question is whether that will continue if tensions escalate further. Luna: Right. And that's what we'll be watching. For now, the message is clear: the bull market is selective, resilient, and still betting on AI infrastructure. Lucas: Exactly. Thanks for joining us on Bull Market Conversations. We'll be back soon.