Are markets finally facing up to real risk?
Today’s chip sell-off and yesterday’s global bond sell-off could signal a significant shift in market sentiment, affirms the CEO of one of the world’s largest independent financial advisory organisations.
Nigel Green of deVere Group’s comments come as US tech shares post a third consecutive day of steady declines, with a leading semiconductor index sliding 5% and extending a rout that has wiped more than $1 trillion off chip stocks since late July.
The move follows a sharp shift in bonds, with the 30-year Treasury yield touching its highest level since 2007 and 10-year yields sitting near their strongest point since early 2025. Oil has pushed above $85 a barrel amid a tense standoff between the US and Iran over the Strait of Hormuz, and Wall Street’s fear gauge, which sat at its lowest point of the year only two days ago, is climbing again.
The Federal Reserve publishes minutes from its latest meeting later today.
He says: “What we’re witnessing is more than one or two bad sessions. It seems to reflect a market finally pricing in risks it had spent months choosing to ignore.
“For most of this year, investors have been happy to look past elevated borrowing costs, heavy government debt issuance, and a genuinely unstable Middle East.
“Complacency like that tends to unwind fast once it breaks, and, also, fast unwinds tend to overshoot.
“Semiconductor stocks led markets higher for close to two years on the strength of the AI build-out. The same concentration is now working in reverse.
“When a small number of stocks carry an entire index for that long, a single wobble in sentiment can knock out a disproportionate share of value within a few sessions.
“The speed of this shift matters as much as its size.”
The VIX, Wall Street’s own gauge of fear, touched a 2026 low of 14.18 just two days before this week’s slide began, and it has already climbed back above 15 as chip and bond markets have turned.
“A swing like that inside a matter of days, tells you how much complacency had built up beneath the surface.
“Bond markets are sending an equally loud signal. 30-year yields at their highest since before the financial crisis are not a footnote to the equity story.
“They’re a warning about the true cost of government borrowing, and every equity investor should be asking what that means for the price they’re paying today.”
In addition, gold’s strength tells its own story. Physically backed gold funds pulled in roughly $3 billion last month alone, with holdings climbing even as yields rise, which does not happen under textbook conditions.
“Serious money is quietly hedging against exactly the scenario now playing out on screens,” notes Nigel Green.
The standoff over the Strait of Hormuz adds a variable that markets cannot model with any confidence.
“Energy shocks feed straight into inflation, and inflation feeds straight into how long borrowing costs stay elevated. This is the loop investors should be watching most closely this week, far more than the daily move in any single index.”
The deVere CEO comments: “There’s a genuine contrast sitting underneath all of this. Strong recent earnings from a major US retailer show consumer spending has not collapsed, even as long-term borrowing costs climb to levels unthinkable a decade ago.
“Solid spending against rising long-term rates is the tension markets are now trying to resolve, and it is why sentiment can turn sharply from here.
“Investors should not read this as a reason to abandon growth assets or rush into cash. A portfolio built for calmer conditions simply needs to be tested against rougher ones.”
Investors who diversified early and who are not leaning on a single sector for returns are far better placed to handle this.
Nigel Green concludes: “Markets have spent close to two years rewarding confidence in a handful of stocks. Investors who stayed properly diversified through that run now have the most room to manoeuvre and are likely to see rewards.
“Today’s Fed minutes will offer an early signal on which way this goes. Investors would be wise to work with an adviser, and to resist making sweeping decisions before they do.”