General Market News

Asian equities declined despite TSMC's 77% profit surge, while U.S. markets showed mixed signals with softer inflation data offset by Middle East tensions driving oil prices higher. The stock rotation helped the S&P 500 post a small gain, but chip stocks remained under pressure and SpaceX shares continued to slide from their post-IPO peak.

• 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

Global hedge funds increased short positions against manufacturing stocks in June 2026, with the sector receiving the most short bets amid supply chain disruptions caused by renewed tensions around a key waterway. Companies like Canadian Solar, Toyota, and Puma were among the targets as vessel flows through the strait collapsed by over 90% at peak disruption, driving up freight rates and commodity costs.

• Manufacturing became the top shorted sector in June with three more picks than May, based on Hazeltree data tracking 600 asset managers and 16,000 global stocks
• Vessel traffic through the affected strait dropped more than 90% from pre-war levels of 90-110 daily vessels, with freight rates on routes like Shanghai to L.A. more than doubling in recent months
• The disruption has raised insurance, freight, and commodity costs for manufacturing companies that rely on imported components, threatening profit margins across the economically sensitive sector

Meta is launching a safety feature that alerts parents when teenagers discuss suicide or self-harm with its AI chatbot on Instagram and other platforms. An AI system will flag concerning conversations for manual review before parents are notified, with the feature developed after feedback from over 75 clinicians. This announcement follows the UK government's planned under-16 social media ban set for spring 2027.

• Meta AI currently directs at-risk teens to crisis helplines; the new system adds parental alerts after manual review of AI-flagged conversations
• The company will 'err on the side of caution' with ambiguous cases, potentially alerting parents even when there may not be real cause for concern
• Meta is also developing capabilities to alert emergency services when someone appears to be at imminent risk of suicide

U.S. grocery unit sales fell 1.8% in June year-over-year as consumers cut back on purchases, with declining volumes now outweighing 2-3% price inflation and causing overall sales to drop. Groceries cost about 33% more than in 2019, driving shoppers to buy fewer items, switch to cheaper brands, and hunt for deals. The shift is pressuring food manufacturers like PepsiCo and pushing retailers including Walmart and Kroger to emphasize promotions and price cuts.

• Grocery unit sales declined 1.8% year-over-year in June, reversing from 0.1% growth the prior year, as price increases of 2-3% no longer offset volume declines
• 80% of Americans are trying to spend less according to Bain's May survey, with 56% of grocery cutters trading down to cheaper brands, 49% buying fewer items, and 44% relying more on promotions
• PepsiCo reported North America food revenue fell 2% in Q2 with flat volume, while Walmart announced price cuts on beef, ice cream and other items as the industry shifts focus from dollar growth to volume growth

Tech Mahindra, India's fifth-largest IT firm, reported first-quarter revenue of 157.12 billion rupees ($1.63 billion), beating analyst estimates of 154.76 billion rupees. The 17.7% year-on-year revenue growth was driven by strong performance in communications and manufacturing segments, along with favorable currency movements from a weak rupee.

• Revenue reached 157.12 billion rupees ($1.63 billion), surpassing the analyst consensus estimate of 154.76 billion rupees
• Year-on-year revenue growth of 17.7% for the quarter ended June 30
• Growth was primarily driven by the communications and manufacturing business segments and benefited from rupee depreciation

U.S. stock futures were mixed on Thursday as Dow futures rose 131 points while Nasdaq 100 futures fell 0.45%, with investors weighing strong earnings reports and key economic data. TSMC's record quarterly profit failed to lift semiconductor stocks, while market focus shifted to retail sales, jobless claims, and corporate earnings from UnitedHealth and Netflix. The session tests whether easing inflation can sustain elevated equity valuations amid sector rotation away from chips toward megacap platforms and financials.

• TSMC reported record earnings up 77% year-over-year and raised 2026 revenue growth outlook above 40%, but semiconductor stocks continued retreating with the Philadelphia semiconductor index down 16% from its June peak.
• Key economic data due at 8:30 AM includes June retail sales (following May's 0.9% rise) and weekly jobless claims, which will test whether consumer demand remains strong without reigniting inflation concerns.
• United Airlines warned 2026 fuel costs could be nearly $6 billion higher than expected, highlighting oil price risks that could squeeze margins and revive inflation pressure despite recent softer price data.

Wall Street's six major banks exceeded second-quarter profit expectations in 2026, driven by a surge in investment banking fees, strong trading desk performance amid market volatility, and sustained loan growth. Investment banking revenue reached its highest level since the 2021 pandemic-era boom, fueled by mega-IPOs and multibillion-dollar deals. All major banks beat earnings estimates, with analysts describing the results as 'extraordinary'.

• Global investment banking revenue topped $60 billion in the first half of 2026, with JPMorgan leading league tables followed by Goldman Sachs and Bank of America
• Stock trading delivered exceptional results as AI-related jitters, Middle East tensions, and energy market swings drove client activity and volatility
• Strong consumer spending and resilient credit conditions supported steady loan demand and higher net interest income, with commercial defaults appearing to decline

The European Union has accepted X's (formerly Twitter) proposed plan to address violations of digital content regulations. This resolution suggests X has taken steps to comply with EU digital rules, potentially avoiding significant fines or additional regulatory action.

• X submitted a compliance plan that satisfied EU regulators regarding digital content moderation requirements
• The acceptance indicates X will avoid immediate penalties under the EU's Digital Services Act
• This marks a regulatory milestone for the platform following scrutiny over content moderation practices

Iran warned it would retaliate against U.S. and regional infrastructure if President Trump follows through on threats to strike Iranian power plants and bridges next week unless negotiations resume. The escalating conflict centers on the Strait of Hormuz, a critical oil shipping route, after U.S. strikes this week targeted Iranian military sites in response to attacks on commercial vessels.

• Trump threatened to target Iranian infrastructure including 'all their power plants' and bridges next week if diplomatic talks don't begin, prompting Iran to declare the Strait of Hormuz an 'invincible red line'
• U.S. Central Command conducted overnight strikes on Iranian command centers, air defense sites, and missile capabilities in multiple locations including Bandar Abbas
• Oil prices showed muted reaction with Brent crude down 0.5% to $84.42 per barrel, as markets display 'growing sense of fatigue' and desensitization to the prolonged U.S.-Iran conflict

Chinese chipmaker CXMT's $8.6 billion IPO, Asia's largest this year, will generate at least $41 million in fees for six Chinese investment banks at a rate of 0.48% of proceeds. The deal marks a significant boost for China's investment banking sector, whose fee income has declined sharply from a 2022 peak of $4.16 billion. CXMT is China's biggest DRAM chip manufacturer, and the IPO is part of the country's push for technological advancement.

• The 0.48% fee rate is well below China's A-share IPO average of 4.52% and lower than recent comparable deals like SpaceX (0.67%) and SK Hynix (0.97%), reflecting CXMT's strong bargaining power despite fierce competition among banks
• Year-to-date mainland IPO fees now total $684.62 million, recovering toward 2025's $984.75 million but far below the 2022 peak of $4.16 billion from deals including China Mobile and CNOOC
• China Securities and CICC are lead sponsors, with four other top-10 Chinese banks participating; proceeds could reach $9.8 billion if an overallotment option is exercised, pushing fees to 296 million yuan

The U.S. will impose a 25% tariff on most Brazilian imports starting July 22, following a Section 301 investigation into alleged unfair trade practices including content censorship demands on U.S. tech firms, preferential treatment for other nations, and intellectual property issues. The move comes after failed negotiations between the two countries, with U.S. officials accusing Brazil's President Lula of not negotiating in good faith.

• The tariffs exempt certain goods including beef, orange juice, aircraft parts, and energy products, but an additional 12.5% duty related to forced-labor enforcement could be added within days
• The dispute stems from Brazil allegedly directing U.S. tech companies like X, Meta, and Google to remove political content and suspend accounts of U.S. residents, plus trade barriers on ethanol and weak IP enforcement
• The trade conflict has entered Brazil's October presidential election, with accusations that Senator Flavio Bolsonaro's Washington visit contributed to triggering the tariffs

European companies are heading into their strongest earnings season in over three years, with second-quarter profits expected to grow 15.3% on average, largely driven by energy sector gains from higher crude prices. However, excluding energy, European firms face a significant growth gap compared to U.S. counterparts, with non-energy European companies forecast to grow earnings just 6% versus 19.6% for U.S. firms, highlighting Europe's lack of AI-powered growth engines.

• Energy sector profits are expected to double due to Middle East conflict-driven oil prices, accounting for most of Europe's earnings rebound while non-energy sector estimates have slightly deteriorated
• U.S. companies overall are forecast to deliver 23.7% average earnings growth compared to Europe's 15.3%, with the AI technology gap being a primary driver of the divergence
• ASML, Europe's most valuable company at 600 billion euros, raised its 2026 sales forecasts after beating Q2 expectations, offering a rare bright spot for European AI-adjacent opportunities in chip equipment manufacturing

Chinese President Xi Jinping will outline China's vision for global AI governance at Shanghai's World Artificial Intelligence Conference on July 17-20, marking his first attendance at the annual forum. The event highlights Beijing's strategy to position its open-source AI models as a public good alternative to closed U.S. systems, while Huawei debuts its Atlas 950 SuperPoD computing cluster built without advanced Nvidia chips. Xi's participation underscores AI's growing strategic importance to China as both an economic driver and a tool in U.S.-China technology competition.

• Huawei's Atlas 950 SuperPoD AI computing system, linking thousands of Ascend processors, demonstrates China's progress in building large-scale AI infrastructure independent of U.S. technology and sanctions
• China will promote its proposed World AI Cooperation Organisation (WAICO) and frame open-source models as bridging 'global AI inequality,' contrasting with Washington's opposition to sweeping AI regulation
• The forum features limited U.S. tech company representation but includes UN Secretary-General Guterres and leaders from Kazakhstan and Thailand, as China courts developing nations on AI capacity-building

Oil prices are rallying toward $90 as the U.S. re-imposes a naval blockade on Iranian shipping, raising fears of reduced oil flows through the Strait of Hormuz. WTI crude consolidated above $80 and Brent above $85, reaching their highest levels since mid-June. The escalation follows U.S. attacks on Iran, Iranian threats to close the strait, and attacks on UAE oil tankers, creating significant supply uncertainty.

• WTI crude oil needs to break above $81 resistance to target the $90-$95 range, with an 'inside day' candle formation suggesting price compression and potential for a quick move higher if resistance is cleared
• Brent crude oil is consolidating above its 50-day and 200-day moving averages, with a break above $90 expected to open the path toward $100 and potentially $120
• Ukrainian attacks on Russian refineries have forced Moscow to cut diesel exports, compounding global energy market strain and raising concerns about increased transport costs that could dampen economic growth and future oil demand

Leading Chinese drugmakers like Jiangsu Hengrui Pharmaceuticals and CanSino Biologics are struggling to recruit internationally experienced staff needed for global expansion, as China's rapid rise in drug development outpaces workforce capacity. This talent shortage is critical as U.S. regulators increasingly demand multi-regional trials with diverse patient populations rather than China-only studies. The gap is slowing execution and forcing reliance on overseas partners, though experts say it's more likely to delay than derail expansion plans.

• Chinese sponsors conducted 88% of their trials exclusively in China in 2025 but only 5% in the U.S., highlighting the scale of the global expansion challenge
• China-headquartered clinical trial sponsors grew from 2% of global trials in 2009 to 32% in 2025, while licensing deals in greater China surged from $318 million in 2016 to significantly higher levels in 2025
• Asia-Pacific biotech professionals were nearly three times more likely than global peers to report talent shortages affecting operations, with particular scarcity in regulatory affairs, international trial management, and cross-cultural expertise

Fed Chairman Kevin Warsh faces mounting pressure to control inflation after two days of congressional testimony, despite recent positive CPI and PPI data. Both parties agree prices are rising too fast, putting his credibility at risk as he questions traditional inflation measures and launches reviews of how the Fed tracks prices. If inflation doesn't decline sustainably, Warsh risks losing support within the Fed and on Capitol Hill.

• CPI fell 0.4% and PPI fell 0.3% in June, but Warsh calls these 'imperfect measures' and has appointed task forces to rethink how the Fed measures inflation, with results not expected for months
• Fed officials are divided on whether AI infrastructure spending is driving inflation, with Governor warning of 'significant price increases for chips, high-tech equipment, and utilities' while Warsh believes supply will catch up with demand
• Markets overwhelmingly expect the Fed to raise interest rates by year-end; Warsh's credibility hinges on making the right decision amid debate over AI spending impacts and avoiding an inflation reacceleration

Kalshi prediction market traders now see a 93% chance that U.S. gas prices will exceed $4 per gallon by the end of July, up sharply from 56% just two days earlier. Current national gas prices stand at $3.89 per gallon. The speculation comes amid rising oil prices and escalating U.S. military strikes on Iran that threaten commercial shipping in the Strait of Hormuz.

• Traders see 63% odds gas prices will exceed $4.10 per gallon, but less than 5% chance of reaching $4.50 (the 2024 high of $4.56 was set on May 21)
• Oil futures have risen for three straight days, with WTI crude at $79.60 per barrel and Brent at $84.95 per barrel, both up 0.3%
• U.S. military strikes on Iran targeting capabilities used to attack commercial shipping in the Strait of Hormuz are driving energy market concerns

The 2026 FIFA World Cup provided a tourism boost to U.S. host cities with increased hotel bookings and bar sales, but the positive impact was limited by broader economic weakness, according to the Federal Reserve's beige book. While some bars and hotels benefited from tournament-related activity, the gains were offset by reduced spending from locals and fewer international visitors, particularly from Canada. Rising oil prices and consumer pullback on discretionary spending dampened the overall economic effect.

• Boston bars reported higher beer sales and some ran out of beer due to Scottish fans, while hotels met forecasts only after lowering room prices below initial expectations
• Canadian visitor numbers were down significantly from historical averages across multiple regions, partly due to President Trump's tariff policy and sovereignty threats prompting Canadians to spend domestically
• In non-host cities tracked by the San Francisco Fed, locals pulled back spending on restaurants, hotels, and entertainment, while consumers across regions sought cheaper alternatives and cut discretionary spending due to rising oil prices

US stocks rose Wednesday with the Dow gaining 150 points as softer-than-expected Producer Price Index data boosted investor sentiment and reduced expectations for a July Fed rate hike. Big Tech stocks rallied while semiconductor stocks retreated, as investors rotated into large-cap technology names amid easing inflation concerns and a strong start to Q2 earnings season.

• Big Tech leaders Amazon, Microsoft, Alphabet, and Apple gained 3-4%, while semiconductor stocks declined sharply with Micron down 7%, Intel down 5%, and the SMH ETF falling 2%
• Producer Price Index fell 0.2% monthly versus expectations of no change, pushing the probability of a July Fed rate hike down from 31% to 10% according to CME FedWatch Tool
• S&P 500 companies are expected to deliver 23.7% year-over-year earnings growth for Q2, though Middle East tensions and potential energy price increases remain a risk to the inflation outlook

A U.S. sanctions bill targeting Russia has sparked concerns among Democratic lawmakers that it grants President Trump unchecked authority to impose 100% tariffs on major buyers of Russian oil and gas, potentially affecting India, Japan, and EU countries. The legislation, championed by the late Senator Lindsey Graham, aims to cut Russia's energy revenues for its war in Ukraine but lacks congressional oversight mechanisms or expiration dates.

• The bill allows 100% tariffs on the top five buyers of Russian crude (China, India, Slovakia, Hungary, Azerbaijan) and natural gas (China, France, Japan, Hungary, Belgium), down from a previous 500% proposal
• Democratic lawmakers warn the bill has no congressional disapproval mechanism, no expiry date, and vague criteria that could expand tariff scope to additional countries, including European allies
• Countries importing less than 15% of Russia's natural gas exports and taking steps to reduce imports can receive exemptions, protecting Japan, France, Hungary and Belgium under current provisions