General Market News

US stock markets experienced volatility during the second-quarter earnings kickoff week, with all three major indexes headed for weekly losses despite strong bank earnings. Semiconductor stocks remained volatile and under pressure, dominating investor attention amid concerns about capital expenditures and the US trading debut of a South Korean memory-chip manufacturer.

• Major banks exceeded second-quarter earnings expectations, with some stocks hitting record highs and helping fuel a midweek market rebound
• Semiconductor sector swung sharply throughout the week, with AI-related concerns about capital spending and memory-chip stock selloffs weighing on the sector
• Key earnings reports scheduled for next week include Alphabet, Tesla, Intel, General Motors, and major telecom companies

Philip Morris International is set to report Q2 2026 earnings on July 22, with analysts expecting revenues of $10.56 billion (up 4.1% year-over-year) and EPS of $2.04. The company's smoke-free product portfolio, including IQOS, VEEV, and ZYN, is expected to drive growth, though challenges like Japan market moderation, U.S. regulatory delays, and geopolitical disruptions may constrain results.

• Consensus estimates: $10.56B revenue (4.1% YoY increase) and $2.04 EPS, with the earnings estimate rising by a penny in the past 30 days
• Growth drivers include accelerating smoke-free transformation, IQOS momentum, pricing power across products, and normalized U.S. ZYN channel inventories tracking consumer demand more closely
• Headwinds include elevated commercial spending, slower IQOS growth in Japan, U.S. regulatory delays, and geopolitical disruptions; stock carries Zacks Rank #4 (Sell) with +0.69% Earnings ESP

Global stock markets demonstrated the 'wall of worry' concept in Q2, rebounding strongly despite geopolitical tensions and macro concerns, with the Iranian conflict easing and oil markets responding positively. Technology stocks led U.S. sectors with nearly double-digit gains after previous quarter losses, while Emerging Markets outperformed despite negative Chinese returns. RiverFront remains cautiously optimistic, emphasizing that strong earnings fundamentals continue to drive market performance even as shorter-term technical indicators warrant monitoring.

• Technology sector rebounded strongly in Q2 after posting nearly double-digit negative returns in Q1, driven by AI spending and efficiency gains, while Energy lagged as oil prices fell from over $100 per barrel
• Emerging Markets led global equities despite China posting its second consecutive negative quarter, with South Korea and Taiwan returns exceeding 50% and overcoming Chinese weakness
• Technical and fundamental momentum remain broadly positive by RiverFront's measures, though a Federal Reserve likely on hold and strong recent gains prompt cautious monitoring of tactical indicators in shorter-horizon portfolios

California-based supplier Taylor Farms is recalling products linked to an ongoing cyclosporiasis outbreak connected to lettuce served at Yum Brands-owned Taco Bell locations. The recall follows reports of the parasitic illness outbreak tied to the company's products, according to Bloomberg News citing internal documents.

• The outbreak involves cyclosporiasis, a parasitic illness caused by contaminated food, specifically lettuce supplied to Taco Bell restaurants
• Taylor Farms, a major California-based produce supplier, is initiating the recall in response to the ongoing health crisis
• The outbreak affects Yum Brands' Taco Bell chain, potentially impacting customer health and the fast-food chain's operations

The United States will restore Hong Kong's special trade status by not renewing the executive order that revoked it in 2020, according to China's commerce ministry. The original order was imposed by President Trump in response to Beijing's national security law in Hong Kong and has been extended annually since July 2020. This reversal follows recent U.S.-China trade talks that produced tariff reductions and could restore Hong Kong's preferential treatment on export controls.

• The executive order revoking Hong Kong's special status was first implemented on July 14, 2020, and has been extended each year until this week when the renewal deadline passed
• Restoration would give Hong Kong separate treatment from mainland China on export controls and trade measures, reversing alignment that has existed since 2020
• China's commerce ministry welcomed the move as aligning with 'widespread expectations of the international community' and urged the U.S. to respect China's sovereignty and strengthen economic exchanges with Hong Kong

Elon Musk's X Corp and major music publishers including Universal Music Group and Sony Music have agreed to end their mutual legal disputes over unauthorized music use on the X platform. Both sides filed to dismiss their respective lawsuits with prejudice, meaning the claims cannot be refiled, though settlement terms were not disclosed.

• The music publishers originally sued X in 2023, accusing the platform of infringing hundreds of copyrights by allowing users to post songs without proper licensing
• X countersued the labels in January in Texas, alleging antitrust violations for refusing to negotiate individual licensing deals and forcing inflated licensing rates
• A federal judge previously dismissed parts of the publishers' case but allowed contributory infringement claims to proceed before the parties reached this resolution

The Federal Aviation Administration is requesting an additional $10 billion from Congress to modernize the U.S. air traffic control system, which FAA Administrator Bryan Bedford describes as 20 years behind and inefficient. The agency is currently deploying an initial $12.5 billion already approved by Congress, with preparations underway for air traffic to double over the next two decades.

• FAA Administrator Bryan Bedford acknowledges the system is 'behind 20 years' and operates with significant inefficiency despite maintaining safety standards
• The agency needs $10 billion in additional funding beyond the $12.5 billion already approved by Congress for system upgrades
• Air traffic is projected to double in the next two decades, creating urgency for infrastructure modernization

Semiconductor stocks experienced their steepest weekly decline in over a year, with the Philadelphia SE Semiconductor Index falling 11% for the week and down nearly 24% from its late June peak, entering bear market territory. The selloff reflects profit-taking and growing concerns about AI investment sustainability after chip stocks had surged 62% year-to-date, fueled by investor concerns over competition from China's AI developments and delayed product releases from major tech companies.

• The Philadelphia SE Semiconductor Index is on pace for its largest one-week decline since March 2025, down 11% this week and nearly 24% from its all-time high in late June
• Major chip stocks declined sharply: Nvidia fell 3%, while Micron, SanDisk, Qualcomm, and Broadcom each dropped 2-3% as investors questioned AI capital expenditure sustainability
• Chinese startup DeepSeek's launch of the Kimi K3 model (a 2.8 trillion-parameter AI system) and Google's delayed Gemini 3.5 Pro release intensified scrutiny of returns on U.S. tech companies' hefty AI investments

U.S. stock markets fell sharply on Friday, with the Dow dropping 486 points (0.9%), the S&P 500 down 1.1%, and the Nasdaq declining 1.7%, driven by an accelerating selloff in AI and semiconductor stocks. The Philadelphia Semiconductor Index fell over 19% from its late-June high, heading for its worst weekly performance since March 2025. Geopolitical tensions in the Middle East and weak guidance from Netflix added to investor concerns.

• Semiconductor stocks led losses with Nvidia down 4.3% and the chip sector index near a two-month low, despite recent positive earnings from TSMC and ASML, reflecting broader worries about AI infrastructure spending.
• Netflix plunged 11% after issuing weak third-quarter guidance, triggering concerns about valuation resets across high-multiple technology stocks.
• Escalating U.S.-Iran military strikes disrupted energy flows through the Strait of Hormuz (which carries one-fifth of global oil), pushing WTI crude above $81 and Brent above $86 per barrel.

Luxury carmaker Aston Martin is in talks with lenders including BlackRock-owned HPS Investment Partners to raise additional funds through asset-backed financing. The company has been struggling with cash burn and falling sales due to U.S. tariffs and weak demand in China, having posted another quarterly loss in April. This follows a previous funding round in April that brought liquidity to £230 million at the end of the March quarter.

• The proposed financing would use a 'drop-down' transaction, placing company assets beyond the reach of existing creditors
• Aston Martin faces ongoing financial pressure from U.S. tariffs and weak Chinese demand, reporting continued quarterly losses
• The company previously secured funding from a consortium in April 2026, bringing liquidity to £230 million by end of March quarter

US stock indices fell early Friday due to escalating US-Iran conflict in the Middle East, with the NASDAQ 100 down 1.70%, S&P 500 down 0.97%, and Dow Jones down 0.87%. The selling pressure reflects investor concerns about geopolitical tensions as earnings season approaches, though falling interest rates may provide some support.

• NASDAQ 100 tested support at 28,500 with 28,200 as the critical swing low; a break below could signal increased selling pressure
• S&P 500 retreated to test its ascending triangle trendline, a key technical level that bulls need to defend to maintain the uptrend
• Markets face conflicting forces heading into the weekend, with deteriorating Middle East tensions weighing against supportive falling interest rates

U.S. import prices rose 0.3% in June, defying expectations of a 0.8% decline, with annual prices jumping 7.7%, the largest increase since August 2022. Import prices from China surged 0.9%, marking the biggest monthly gain since January 2008, likely reflecting tariff impacts. The increases were driven by costs for AI-related goods like semiconductors and industrial machinery, offsetting energy price declines.

• China import prices rose 0.9% monthly (highest since January 2008) and 1.3% annually (largest yearly gain since November 2021-2022 period), suggesting tariff effects
• AI buildout appears to be driving inflation, with rising costs for computers, peripherals, semiconductors, and industrial/service machinery up 12.6% in May
• Export prices to China fell 0.2% in June but surged 7.4% annually, the biggest yearly increase since August 2022, while overall export prices rose 10.2% year-over-year

U.S. stock futures fell Friday morning as tech and chip stocks continued to decline, putting major indexes on track for weekly losses after a volatile trading period. The tech-heavy Nasdaq futures dropped 1.7% while chip stocks tumbled, with concerns mounting over AI spending sustainability and escalating tensions in Iran pushing oil prices higher.

• Major indexes headed for weekly losses: Dow down 0.2%, S&P 500 down 0.5%, and Nasdaq down 1.5% for the week amid ongoing tech sector volatility
• Netflix shares plunged in pre-market trading after issuing a disappointing earnings outlook and announcing plans to reduce frequency of user engagement updates
• SpaceX stock fell below its $135 IPO price for the first time since going public in mid-June, down from highs above $225, while Alphabet shares dropped on news of months-long delays for Google's Gemini 3.5 Pro AI model

Norway's Tomra Systems reports that Europe's plastics recycling industry is delaying investments despite EU regulations requiring all packaging to be recyclable by 2030. The company's CEO warns that Europe needs to at least double its plastics recycling capacity by the deadline, but high financing costs and economic uncertainty are causing customers to postpone commitments. Tomra does not expect a recovery in plastics sorting demand until at least 2027.

• EU's Packaging and Packaging Waste Regulation requires all packaging to be recyclable by 2030, necessitating at least a doubling of Europe's plastics recycling capacity
• High financing costs, economic uncertainty, and doubts about sustained plastic prices are causing recyclers to delay investment decisions, with recovery unlikely before 2027
• Investment would need to accelerate by around 2028 for recyclers to meet the 2030 deadline, while Tomra relies on stronger aluminium and metals demand to support its recycling division in the interim

US stock futures fell on Friday with the Nasdaq-100 down 1.6%, driven by Netflix's disappointing revenue guidance and continued semiconductor sector weakness. Netflix shares dropped over 10% in premarket trading after Q3 revenue projections missed expectations, while the PHLX Semiconductor Index tumbled 4% on Thursday amid investor concerns about AI spending justification.

• Netflix plunged more than 10% premarket after third-quarter revenue guidance fell short, citing a 'dynamic and competitive' entertainment landscape
• The PHLX Semiconductor Index dropped over 4% Thursday, followed by Japan's Nikkei 225 falling 4%, as the tech rally from March lows stalled
• Investors are questioning the scale of corporate spending on artificial intelligence, pressuring the tech sector that had driven recent market gains

Options market analysis using the 'RiskDex' metric shows unusually high demand for call options on several Magnificent Seven stocks ahead of earnings season, suggesting traders are positioning for strong results. Meta and Microsoft lead with call option prices in the 91st and 93rd percentiles respectively of their yearly range. However, the analyst warns this extreme bullishness may indicate stocks are 'priced for perfection' and vulnerable to disappointment.

• Meta's RiskDex score of 0.75 (calls 25% more expensive than puts) and Microsoft's 0.79 ratio both rank in top percentiles, despite neither stock making new highs in almost a year
• Amazon, Tesla, and AMD also show elevated call skew in their top 80th-92nd percentiles, indicating broad bullish positioning across mega-cap tech
• Nations Indexes president warns the extreme bullishness across multiple names is a 'contrary indicator,' citing Nvidia's muted response to strong earnings as precedent for potential disappointment

US stock futures plunged on Friday, with Dow futures down 360 points and Nasdaq futures falling 2%, as a sharp sell-off in memory chip stocks intensified and Netflix dropped 9.4% on cautious guidance. Rising volatility, US-Iran military clashes, and renewed US-China tensions added to market pressure, signaling a broad risk-off mood as investors retreat from AI and technology winners after a record rally.

• Memory chip stocks (Micron, SanDisk, Western Digital, Seagate) fell 4.6% to 6.5% in premarket trading; the Philadelphia Semiconductor Index hit a near two-month low after dropping 4.3% Thursday, raising questions about AI infrastructure spending sustainability.
• Netflix fell 9.4% despite Q2 revenue rising 13% to $12.56 billion, as the market punished slowing growth and a narrower full-year sales outlook; Intuitive Surgical also sank 11% despite beating estimates.
• Geopolitical risks escalated with Iran launching fresh attacks on US Gulf facilities and President Trump accusing China of election interference, threatening a diplomatic thaw ahead of Xi Jinping's expected September visit.

A CNBC survey reveals Americans are deeply pessimistic about the economy, with 61% expressing concern about current and future conditions despite a strong stock market. President Trump's approval rating stands at just 40%, with particularly negative ratings on his handling of the economy and the Iran war. However, Democrats hold only a modest 4-point advantage in congressional preference, suggesting limited political benefit from economic discontent.

• 47% of Americans report cutting back on essential items like food and medical care, up 6 points from April, with 60% of those earning under $30,000 reducing essential spending versus 35% of those earning over $100,000
• Trump's economic approval rating is underwater at -22 (38% approve, 60% disapprove), the worst of his political career, while 68% disapprove of his handling of inflation
• Support for military action against Iran has declined to 48% (down from 53% in April), with Trump's Iran approval at -28 and only 47% of non-MAGA Republicans supporting his handling of the issue

Global markets experienced significant volatility in mid-July 2026 amid escalating U.S.-Iran tensions following Iran's closure of the Strait of Hormuz and unwinding of leveraged positions in Asian chip stocks. South Korea's KOSPI plunged 6% in one day, down 25% from its June peak, while the Philadelphia Semiconductor Index fell 13% for the month despite strong earnings from tech giants. Energy markets remained relatively calm with Brent crude around $85/barrel, as traders bet on de-escalation despite military strikes and naval blockades.

• South Korea's chipmaker-heavy KOSPI index showed extreme volatility levels not seen since the 1998 LTCM crisis, prompting regulators to introduce new controls on leveraged ETFs
• U.S. military launched strikes on Iranian infrastructure and reimposed naval blockades after Iran closed the Strait of Hormuz, with Trump threatening to hit Iranian power grids and bridges
• U.S. inflation showed improvement with core CPI falling to 2.6% year-over-year from 2.9%, while major banks reported strong Q2 earnings driven by mega-IPOs and trading volatility

Global equity funds attracted $12.46 billion in inflows for an eighth consecutive week through July 15, driven by strong corporate earnings and cooler U.S. inflation that reduced expectations for Federal Reserve rate hikes. European equity funds led with $9.49 billion in net purchases, while U.S. funds saw $4.8 billion in outflows.

• Bond funds extended their buying streak to 15 consecutive weeks with $16.16 billion in inflows, including the largest weekly investment in government bonds since April 8
• Technology sector funds drew $3.37 billion, the smallest inflow in three weeks, while money market funds experienced significant outflows of $102.53 billion
• Emerging market equity funds reversed an 11-week outflow trend with $2.74 billion in net inflows, and precious metals funds ended an eight-week selling streak with $376 million in purchases