General Market News

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

China will impose a consumption tax on lithium-ion batteries and solar cells starting in 2025 and 2027 respectively, ending their previous tax exemptions. The tax begins at 2% and will increase to 4% after implementation periods. This policy shift aims to address industrial overcapacity in China's battery and EV sectors amid weak domestic demand.

• Lithium-ion batteries will face a 2% consumption tax from September 1, 2025, rising to 4% on September 1, 2027; solar cells will be taxed at 2% starting April 1, 2027, increasing to 4% after one year
• Advanced battery technologies including sodium-ion batteries, solid-state batteries, and fuel cells will receive tax exemptions from September 2026 through end of 2028
• The tax change reverses 2015 regulations that exempted these products from China's standard 4% battery consumption tax, with policymakers seeking to curb overcapacity and upgrade industry

The Farnborough Airshow is shifting focus toward defense as spiraling global security threats push weapons demand to the forefront, with defense companies now representing 50% of exhibitors, up from 40% historically. The traditional Boeing-Airbus competition for commercial jet orders is taking a backseat amid supply chain constraints and sold-out delivery slots extending into the next decade. Commercial aircraft orders are expected to remain muted at around 300 planes, well below pre-show forecasts of 800 jets.

• Defense companies make up half of the record 1,600 exhibitors as conflicts in Ukraine and the Gulf drive demand for high-tech weapons, drones, and AI-powered targeting systems
• Commercial jet orders expected to reach only 300 aircraft versus forecasts of 800, as delivery slots are sold out well into the next decade and production capacity remains constrained
• Supply chain issues persist despite improvements, with Airbus's delayed target to increase A320 production to 75 per month by 2027 and ongoing engine delivery headaches affecting manufacturers

Fast-fashion retailer Shein has secured approval from Hong Kong's stock exchange listing committee for an IPO, marking a significant step toward its stock market debut in the Asian financial hub. This move comes after Shein's previous attempts to list in New York and London stalled due to regulatory scrutiny. The IPO is expected to be one of Hong Kong's most closely watched listings in years and will test investor appetite for large consumer deals.

• Shein's listing committee approval brings the company closer to completing its IPO in Hong Kong after failed attempts to list in New York and London
• The offering will serve as a major test of investor demand for large-scale consumer deals in the Hong Kong market
• Neither Shein nor the Hong Kong stock exchange immediately responded to requests for comment on the hearing outcome

Some investors are repositioning portfolios in anticipation of slowing growth in hyperscaler AI infrastructure spending, shifting from semiconductor stocks toward the cloud providers themselves. UBS estimates hyperscaler capex will grow 76% in 2024 to $673 billion, but slow to just 25% growth in 2027 and 6% in 2028. This potential slowdown raises concerns about whether current semiconductor valuations can be sustained.

• Active managers like Edmond de Rothschild and LFG+ZEST have cut semiconductor exposure and increased positions in hyperscalers (Amazon, Microsoft, Alphabet, Meta), betting that slower capex growth will benefit those footing the bills
• The Philadelphia Semiconductor Index has more than doubled over the past year despite an 18% drop from June peaks, while Bank of America's July survey found 82% of investors view semiconductors as the most crowded trade
• Growing constraints include hyperscalers shifting from cash to external debt financing (with bond demand ratios falling from 5x to below 2x), local opposition to data centers (New York imposed a one-year construction moratorium), and cash flows being 'almost completely drained by capex'

Tech Mahindra, India's fifth-largest IT services firm, saw its stock rise 3% on Friday after reporting better-than-expected revenue for the first quarter of fiscal 2027. The revenue beat was driven by growth in its manufacturing segment and a weaker rupee, with the company on track to post the strongest growth among large IT services firms.

• Tech Mahindra's stock traded at 1,555 rupees and was the top gainer on the Nifty IT index, which rose 2%
• Revenue outperformance was attributed to growth in the manufacturing segment and favorable currency effects from a weaker rupee
• Analysts expect Tech Mahindra to deliver the strongest Q1 fiscal 2027 growth among India's large IT services companies

Chinese AI startup Moonshot unveiled Kimi K3, a 2.8 trillion-parameter model it claims is the world's largest open-weight AI system, with performance approaching top U.S. models like Anthropic's Fable. The launch highlights how rapidly Chinese AI firms are closing the gap with American rivals, releasing increasingly powerful models at lower costs and challenging assumptions that China lags months behind the U.S.

• Kimi K3 features 2.8 trillion parameters and a 1 million-token context window, ranking first in web interface benchmarks and second overall behind only Fable 5 in third-party evaluations
• The release follows Anthropic's Fable and Mythos models being withdrawn by the U.S. government due to security concerns, and comes as multiple Chinese firms (MiniMax, Z.ai) accelerate releases of trillion-parameter systems
• Moonshot, backed by Alibaba and Tencent, is reportedly seeking $2 billion in funding at a $30 billion valuation ahead of a potential Hong Kong IPO

Oil prices rose over 1.3% on Friday amid escalating tensions between the U.S. and Iran. Tehran threatened to target regional infrastructure if President Trump proceeds with planned strikes on Iranian facilities next week, raising concerns about supply disruptions in a key oil-producing region.

• U.S. crude futures for August rose 1.32% to $80.09 per barrel, while Brent crude climbed 1.33% to $85.35 per barrel
• Iran's military warned that 'all the infrastructure in the region' would be targeted if Trump carries out threatened strikes on Iranian facilities
• Rystad Energy analysts maintain a limited agreement as their base case, noting both sides have economic incentives to avoid conflict, including U.S. desire for lower oil prices before midterm elections and Iran's interest in accessing frozen assets

Oil prices rose over 1% on Friday as escalating U.S.-Iran military confrontations threatened critical shipping routes through the Strait of Hormuz and Red Sea. Brent crude climbed to $85.28 per barrel while WTI reached $79.98, with both benchmarks up nearly 12% for the week amid concerns over oil supply security.

• The U.S. launched airstrikes against Iran for six consecutive nights, targeting sites near Iran's southern coast, while Tehran responded with missiles and drones at U.S. bases in neighboring states
• Iran has instructed Houthi allies to prepare to close the Red Sea oil route if U.S. forces strike Iranian power infrastructure, adding to supply disruption fears
• IEA Executive Director Fatih Birol warned that oil security remains 'a critical issue' and expressed concern if the situation does not improve within weeks

The IEA chief warned that global energy security is at serious risk if oil shipments through the Strait of Hormuz don't resume within weeks. The strait, which normally carries one-fifth of world energy shipments, has been mostly blocked since February 28 due to U.S. and Israeli strikes on Iran. Asian nations, particularly developing countries like Pakistan, Bangladesh, and India, have been hit hardest by the crisis.

• The IEA coordinated a release of up to 400 million barrels of oil reserves in March (20% of total stockpiles), which temporarily reduced prices by $20 per barrel, but 80% of reserves remain available if needed
• Temporary factors moderating price increases include China's 1+ billion barrel stockpile, increased EV adoption, and U.S. production increases of 1-2 million barrels per day, but these 'can't last forever'
• Asia is disproportionately affected as it received 80-90% of energy from the Strait of Hormuz, with developing countries facing health risks as people turn to hazardous cooking fuels like dung and wood due to unaffordable petroleum products

Taco Bell voluntarily removed lettuce from a supplier in select U.S. states after the ingredient was linked to an ongoing cyclosporiasis outbreak that has sickened thousands. The chain is removing the affected ingredient nationwide from its supply chain and replacing it within 24 hours in impacted states.

• Shredded iceberg lettuce from California-based Taylor Farms was identified by investigators as a potential source of the parasitic intestinal infection outbreak
• Taco Bell took immediate action in consultation with public health officials but did not disclose which specific states were affected
• The contaminated lettuce is being indefinitely removed from the nationwide supply chain as a precautionary measure

June's CPI decline to 3.5% was driven primarily by a 20.6% drop in crude oil following a mid-June ceasefire, while core PCE inflation hit its highest level since October 2023. Moody's chief economist Mark Zandi warns that a potential shutdown of the Strait of Hormuz remains the biggest inflation threat, capable of quickly reversing recent disinflation gains. Bond markets remain skeptical of peak inflation, with the 10-year Treasury yield climbing to 4.58% despite the headline CPI improvement.

• Energy prices fell 6% month-over-month in June, with WTI crude dropping to $69.73 and retail gasoline declining from $4.50 to $3.85 per gallon by mid-July, accounting for most of the headline CPI improvement
• The Strait of Hormuz previously handled 10.8 million barrels per day (roughly 20% of global oil supply) before February conflict, with Brent crude reaching $138 per barrel during the April disruption
• The Federal Reserve has held rates at 3.50%-3.75% for over seven months, with consumer sentiment at near-recessionary levels (44.8 in May 2026) suggesting households remain unconvinced the inflation fight is over

Wise reported strong Q1 fiscal 2027 results with active customers up 21% to nearly 12 million, cross-border volume up 26% to $69 billion, and net revenue rising 25% year-over-year to £714 million. The company reiterated full-year guidance and plans to continue reducing prices for customers despite the impact on near-term margins.

• Revenue diversification increasing with 51% of net revenue now from non-cross-border activities; card and other revenue jumped 38% while interest income rose 15%
• Company expects constant-currency net revenue growth in the middle of 15-20% range and margins near the high end of 20-25% for the full year, with growth weighted to the first half
• Wise plans ongoing pricing reductions totaling approximately five basis points across the year (two basis points in Q2, one basis point each in Q3 and Q4) as part of its long-term strategy

Larry Kudlow argues the U.S. economy is entering a new 'Goldilocks' phase characterized by strong economic growth combined with declining inflation, contrary to traditional economic trade-offs. Recent data shows consumer and producer prices fell in June while retail sales surged, with core sales rising 8 percent annually over three months. Kudlow attributes this to supply-side factors including AI, advanced manufacturing, and productivity gains, alongside pro-growth fiscal and monetary policies.

• Online retail sales jumped 1.9% in June with non-store retailers showing 21% annual growth over the last 3 months; car sales rose more than 20% annually in Q2
• Consumer and producer price levels actually declined month-over-month in June while unemployment claims remain at rock-bottom levels
• Kudlow declares 'the Phillips Curve is dead,' arguing there is no trade-off between growth and inflation due to technology-driven productivity gains in AI, quantum computing, and advanced manufacturing

The four largest tech hyperscalers (Meta, Microsoft, Alphabet, Amazon) plan to spend at least $700 billion on AI capex in 2026, 80% higher than 2025's record, driving investment grade corporate debt issuance to $976 billion through May. Despite heavy issuance, IG spreads remain near historic lows at 80 basis points, leaving minimal cushion for market disruptions.

• Hyperscalers have issued $110 billion in US debt year-to-date, representing nearly 16% of total IG issuance versus just 3% a year ago
• AI capex from the big four alone will account for 2.2% of GDP in 2026, with debt markets absorbing much of the financing need
• Hyperscaler spreads already trade 25+ bps wider than the broader IG index (a 10-year high), suggesting markets are beginning to differentiate risk despite tight overall spreads offering little downside protection

Crypto.com secured a $400 million investment from Citadel Securities, valuing the cryptocurrency exchange at $20 billion in its first institutional funding round. The partnership aims to accelerate Crypto.com's expansion into tokenized securities, derivatives, and bridge traditional and digital asset markets. This reflects growing institutional interest in crypto despite ongoing regulatory hurdles and market volatility.

• The $20 billion valuation represents nearly half of industry leader Coinbase's $42 billion market cap, positioning Crypto.com as a major competitor in the exchange space.
• Traditional financial institutions are increasingly investing in crypto platforms following clearer regulatory guidance and growing adoption of tokenized assets, reversing their earlier reluctance.
• Bitcoin has fallen over 26% this year to below $65,000 from a high of $126,000, highlighting continued price volatility challenges facing the $2.3 trillion crypto sector.

Fossil Group plans to close up to 15 stores in 2026 as part of an ongoing turnaround effort, reducing its global footprint to approximately 185 locations. The watch and accessories retailer is focusing on cost reduction and profitability after years of declining sales, though it has slowed the pace of closures due to improved performance at full-price stores.

• Fossil reported Q1 net sales of $224.8 million, down from $233.3 million year-over-year, but narrowed its net loss to $810,000 from $17.6 million in the prior-year quarter
• The company closed 49 underperforming stores in fiscal 2025 and achieved approximately $100 million in selling, general and administrative cost savings compared to fiscal 2024
• Fossil's store count dropped from 220 locations a year ago to 193 as of April 4, 2026, with operations spanning 132 countries through company-owned subsidiaries and distributors