Morning Bid: Churning chips

• The U.S. SOX chip index dropped significantly with no clear trigger, while Asian chip and tech equipment makers in Seoul and Tokyo posted losses following the U.S. decline
• June payrolls are expected to show 110,000 new jobs, with employment gains averaging 188,000 per month over the past three months - nearly triple the 2025 rate and well above the breakeven rate
• Euro zone inflation came in at 2.8%, below expectations, offering hope the ECB can avoid further rate hikes as energy prices retreat

Market Summary: Morning Bid - Churning Chips

Key Market Developments

Global chip stocks experienced significant profit-taking as Q3 2026 began, with the U.S. SOX chip index declining sharply on Wednesday despite the broader S&P 500 remaining flat. Asian markets followed suit, with major semiconductor and tech equipment manufacturers in Seoul and Tokyo posting notable losses.

Major Companies & Sectors

Meta emerged as an outlier, surging nearly 9% on Wednesday after announcing plans to expand its cloud business and sell excess AI computing capacity. The company had previously lost approximately 15% during the first half of 2026.

OpenAI reportedly plans to offer the U.S. government a 5% stake, according to Financial Times reporting.

Economic Data & Central Bank Activity

The June U.S. jobs report is expected to show 110,000 new positions—well above the breakeven rate. Recent employment gains have averaged 188,000 jobs monthly over three months, nearly triple the comparable 2025 period. ADP's private sector report showed a slight miss but insufficient to alter Federal Reserve expectations.

Fed Chair Kevin Warsh acknowledged recent inflation improvements while reiterating commitment to the 2% target. Fed futures continue pricing in a rate hike by October.

Commodities & Currencies

Crude oil prices declined amid positive U.S.-Iran diplomatic discussions, with Brent trading around $71 per barrel. The Japanese yen rebounded from a 40-year low on intervention concerns, with authorities reportedly adopting more opportunistic currency intervention strategies.

European inflation showed improvement, with eurozone headline CPI at 2.8%, potentially allowing the ECB to avoid further rate hikes.