Chip Stocks Look Cheap. AI Spending Is Surging. So Why Is Cameron Dawson Watching for Peak Earnings?

Market resilience faces a critical test as the two-year yield signals potential Fed rate hikes, prompting questions about what economic mechanisms might break to force a policy pivot. While the aggregate consumer remains resilient due to the wealth effect concentrated at the top of the K-shaped economy, real wage growth remains negative. Semiconductor valuations and massive AI capital expenditures are reaching a potential inflection point; current earnings growth may be peaking, signaling a shift toward a multi-year sideways market or a significant correction. Investors and advisors must navigate this dissonance by moving away from rigid calendar-based rebalancing toward dynamic, rules-based strategies. As equity markets hover near all-time highs, the focus shifts to managing rotation risk and preparing for the inevitable 15-20% drawdowns that characterize volatile market cycles.