General Market News

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

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