AI Shock And Tariff Fears Split Markets Winners And Losers | Insight with Haslinda Amin 02/24/2026
Speakers
Summary
- The "HALO" Trade Rotation: Markets are shifting from a pure AI-hype rally to "HALO" (Heavy Asset, Low Obsolescence) sectors. Investors are rotating into industrials, materials, and shipping, betting on the physical economy required to build out AI infrastructure rather than just the software layer.
- AI "Winners and Losers" Phase: The "everyone wins" phase of the AI trade is over. Experts warn of a split where upstream hardware (semiconductors) and power/infrastructure win, while white-collar heavy sectors and generic software companies face disruption and job losses.
- Tariff Confusion & Trade Shifts: Despite the Supreme Court striking down some tariffs, uncertainty remains high as the administration uses different legal authorities (national security) to reimpose levies. This is accelerating the shift of manufacturing from China to Southeast Asia (Vietnam, Malaysia), with the Port of LA noting a drop in China's share of imports from 60% to 40%.
- FX & Disinflation: A contrarian macro view suggests AI is inherently disinflationary (via productivity), which will allow the Fed to cut rates more than expected, weakening the USD and boosting currencies like the JPY and AUD.
Trade Ideas
The Supreme Court struck down previous levies, but the administration is immediately using new authorities (national security) to reimpose tariffs on batteries and telecom equipment. The legal back-and-forth creates an "alphabet soup of statutes" and regulatory fog. Investors hate uncertainty more than bad news, driving capital into classic safe havens despite the risk-on potential of AI. LONG Safe Havens (Gold/Bonds) as a hedge against trade policy volatility. A definitive trade deal or clarity on tariff rules could unwind the safety premium.
Taleb warns that historical pioneers (like car companies) often lose. Shah argues AI agents will replace white-collar jobs "far quicker than anyone expects," and the market is moving to a "winners and losers" scenario. Companies that sell generic software or rely heavily on billable human hours (consulting, BPO) face existential deflationary pressure from AI agents. The "rising tide lifts all boats" era is ending. SHORT/AVOID generic software and labor-intensive white-collar services. AI adoption takes longer than expected, allowing these companies to pivot.
Shah notes that upstream sectors (semiconductors) are "huge winners." Bigos adds that while US software is volatile, the supply chain in North Asia (Japan, Korea, Taiwan) is critical for "developing frontier capabilities." The market is bifurcating. While software companies face competition from open-source and "distillation" (copying), the hardware required to run these models remains a bottleneck with high pricing power. LONG the AI hardware supply chain (North Asia & US Semis). Overcapacity in chip production or geopolitical conflict in Taiwan.
Markets are witnessing a rotation into the "HALO" trade (Heavy Asset, Low Obsolescence). These sectors are outperforming the S&P 500 as investors seek tangible economic beneficiaries. The AI build-out requires massive physical infrastructure (energy, materials, logistics). As the "pure software" AI trade becomes volatile/crowded, capital flows into the "picks and shovels" of the physical world. LONG heavy assets and industrials. Global recession or a sharp contraction in global trade volumes due to tariffs.
The fiscal risk premium in Japan is being "repriced" and reversed. Chan targets 148 on the pair. As the fiscal situation stabilizes and the risk premium unwinds, the Yen strengthens. Additionally, if US rates fall (see USD thesis), the yield differential compression favors the Yen. LONG JPY. Bank of Japan refusing to hike rates or intervening ineffectively.
Charu Chan
Crypto Analyst, CoinDesk
Chan argues that AI adoption is structurally disinflationary (lowering costs in software, legal, financials). If inflation falls faster than expected due to AI productivity, the Fed can cut rates more aggressively (Chan expects cuts in mid-year and Sept). Lower US rates reduce the cost of hedging against the dollar, leading to USD weakness. SHORT USD; LONG AUD (as a beneficiary of commodity demand and weaker USD). Tariffs proving inflationary, forcing the Fed to keep rates higher for longer.
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