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Tech suffers a record rout: The S&P 500 shed an estimated $⁠2.9 trillion in market value, its biggest one-day loss ever, as the AI trade unravelled. Nobody was safe in chips.

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AMD splits our analysts: The chipmaker fell 11.6% despite beating estimates. Charlotte says the market is mistaking local data center delays for falling AI demand; Jordan says local pushback is a lasting obstacle for its growth. Make up your own mind below ⬇️

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Editor's note: With the Bank of England raising rates and the war pushing up energy prices, power bills are a live issue. Our Utilities Portfolio holds the regulated utilities that supply rising demand for power. See every holding.

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📈 The next one: Money markets now put the chance of a second hike in December at 53%, up from 30% before the decision. Traders are betting on a rate of 4.75% by the end of next summer.

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🗣️ No promises: Governor Andrew Bailey said he "could see the case" for a further quarter-point rise and would not sign up to "two-and-done". Asked how high rates would go, he said he could not say. Deutsche Bank's Sanjay Raja called the hike an "insurance policy" against higher inflation, and said the real question is whether the next one comes in December or February.

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🧮 Too much, too fast? BNY Investments' April LaRusse said the hike reinforced the Bank's credibility, but that markets may be pricing too much further tightening, because she expects the economy to soften through 2027.

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Our take: The Bank has told everyone another hike is possible, and traders have taken it at its word. Bailey has made his next move depend on a war he cannot control, so the market is really betting on the war. Until it ends, the Bank has little reason to stop raising rates.

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Delays hit timing: AMD beat third-quarter estimates on both revenue and earnings days before the drop. Futurum Equities' Shay Boloor says the market is treating regional data center delays as a drop in overall AI compute demand.

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Timing, not appetite: A delayed data center site moves when $⁠AMD books chip revenue, while the customer's need for compute stays in place. Revenue grew 34.3% last year, and with almost no net debt, I think AMD can absorb a slower quarter.

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What would prove me wrong: I would turn cautious if AMD's next results show data center orders cancelled outright, or if Citi's warning on local pushback shows up in customer spending plans.

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Pushback is spreading: Citi flagged an "exponential" new threat to data centers from local opposition that has built for more than a year. I read that as a lasting constraint on where AI capacity can go, and the selloff hit AMD and Intel together.

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Charlotte's timing claim: Charlotte blames mere timing, but a delay only shifts revenue if the site eventually gets built. Where communities block a site outright, AMD loses that customer order for good, and a 10.7% operating margin leaves little cushion when growth slows.

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What would prove me wrong: I would change my mind if AMD's data center customers publicly raise their spending plans for next year while naming new sites that have cleared local approval. That would show the pushback is not removing capacity.