Morning Bid: Damp Squib

• TSMC reported a forecast-beating 77% profit increase, but Asian chip stocks still fell; South Korea's central bank raised rates to support the won and imposed restrictions on volatile single-stock trading
• U.S. June inflation data came in softer than expected, removing speculation of a Fed rate hike this month from futures pricing, though core PCE inflation still tracks above 3% for June-July
• SpaceX shares fell 33% from their record close after raising a record $75 billion in their June 11 IPO, trading at nearly 50 times forward earnings despite remaining loss-making

Market Summary: Chip Stocks Under Pressure Despite Strong Earnings

Key Developments

TSMC Earnings Beat: Taiwan Semiconductor Manufacturing Company (TSMC) reported a blockbuster 77% profit surge, exceeding forecasts. However, this strong performance failed to lift Asian equities, echoing a similar pattern seen with Europe's ASML, which posted solid results on Wednesday but still closed in negative territory.

Market Performance: The S&P 500 managed a small gain Wednesday through sector rotation, while Asian markets declined. South Korea's tech stocks tumbled as the central bank raised interest rates to support the won and implemented restrictions on volatile single-stock trading.

IPO Market Cooling: SpaceX shares fell below their $135 IPO price for the first time since the record $75 billion public offering on June 11. The stock has plunged 33% from its post-IPO peak, though the company maintains a $1.8 trillion market capitalization at roughly 50 times forward earnings.

Inflation and Policy Outlook

June inflation data came in softer than expected, eliminating speculation of a Fed rate hike this month from futures pricing. However, escalating Middle East conflict (Iran war intensification in July) threatens to push oil prices higher, potentially causing fleeting inflation relief. The Fed's preferred core PCE inflation gauge continues tracking above 3% annually for June-July.

Currency Markets

Sterling reached its highest level against the euro in over a year Wednesday, supported by reports that a conservative Labour Party official is favored for UK finance minister.

Upcoming Catalysts

Today's focus: U.S. June retail sales, jobless claims, corporate earnings from Netflix and GE, and remarks from multiple Fed officials.