General Market News

US stocks fell Wednesday with the Dow dropping 450 points as investors awaited the Federal Reserve's interest rate decision and assessed weakness in semiconductor stocks. Chip stocks extended losses on concerns that massive AI infrastructure spending may take longer to generate returns, while oil prices surged 7% on Middle East tensions, adding inflation uncertainty.

• The Fed is expected to hold rates steady, but traders still anticipate at least one quarter-point increase later in 2026; Chair Kevin Warsh's comments will be closely watched for inflation and policy guidance
• Semiconductor stocks continued multi-day selloff after SK Hynix disappointed, with investors questioning AI spending sustainability ahead of critical earnings from Microsoft, Meta, Amazon, and Apple
• Oil jumped nearly 7% to $89.90/barrel after US forces intercepted missiles in the Middle East, heightening inflation concerns; meanwhile, 85% of S&P 500 companies have beaten earnings expectations this quarter

Secondary equity offerings surged to a five-year high in Q2 2025 as AI hyperscalers rushed to raise capital for infrastructure buildouts. Despite strong earnings, investors are now punishing companies with heavy capex plans, favoring free cash flow over aggressive AI spending. This shift in sentiment could mark an important turning point in market leadership as companies face pressure to demonstrate more financial discipline.

• Secondary offerings exceeded 100 announcements in Q2, bringing the four-quarter average above 90 per quarter—the highest level since 2021's speculative boom
• Tech giants reporting earnings saw stock prices decline despite strong results, signaling investor pushback against record capex levels previously viewed as positive
• Apple's approach of staying on AI-capex sidelines while preserving cash has been rewarded, with its market cap reclaiming the top spot over NVDA as semiconductor stocks flirt with bear market territory

Major semiconductor stocks including Nvidia, AMD, and Intel are testing key technical support levels ahead of the Federal Reserve's interest rate decision on July 29, 2026. The sector has experienced significant selling pressure and volatility as traders question the sustainability of the AI trade. Pre-market trading shows slight recovery attempts, with Nvidia bouncing from its 200-day EMA while AMD and Intel remain under pressure.

• Nvidia shows signs of stabilization by bouncing from its 200-day exponential moving average, an important technical support level, after Monday's sharp sell-off
• AMD retreated to $450 support level below its 50-day EMA after gapping lower on Tuesday, sitting at the bottom of a larger consolidation range
• Intel faces the most severe pullback, approaching the critical 61.8% Fibonacci retracement level at $80, making it a high-priority watch for traders

US stock futures showed mixed signals ahead of the Federal Reserve's interest rate decision, with Dow futures down 0.35% while S&P 500 and Nasdaq futures edged higher. The market faces pressure from renewed Middle East tensions causing oil prices to rebound 4.7% and a continued selloff in semiconductor stocks, particularly after disappointing results from Asian chipmakers.

• The CME FedWatch tool indicates a 30% probability of a rate hike at the meeting, with analysts questioning whether new Fed chair Kevin Warsh might implement a 'surprise' preemptive hike to address inflation risks
• Semiconductor stocks remain under severe pressure, with South Korea's Kospi plunging 8.7%, SK Hynix falling 16.5% despite a sixfold profit increase, and the Philadelphia Semiconductor Index tumbling 4.5%
• WTI crude oil rebounded to around $83 per barrel after the US intercepted an Iranian missile attack on American bases in the Middle East, reversing a sharp decline that had reached below $79

Grant Thornton Advisors announced a $5 billion all-cash acquisition of professional services firm CBIZ. The deal will position Grant Thornton as the fifth-largest provider of professional, tax, and advisory services in the U.S. and support its global expansion efforts.

• The transaction is valued at $5 billion in cash and is expected to close in the fourth quarter of 2026
• The acquisition will make Grant Thornton the fifth-largest U.S. provider of professional, tax and advisory services
• Goldman Sachs is advising CBIZ while Deutsche Bank serves as lead financial adviser for Grant Thornton Advisors

Fed Chair Kevin Warsh faces a closely-watched interest rate decision, with Fed Funds futures showing 35% odds of a hike, up from 26% a week earlier. Options trading in bond and gold ETFs may offer clues about market expectations, though call-buying in TLT (bond ETF) presents a murky signal since some economists argue a surprise hike could actually send yields lower. Gold trading activity slightly favors the dovish camp expecting no rate increase.

• TLT bond ETF saw heavy call buying with 171,000 calls purchased versus under 63,000 puts on Tuesday, and the put/call ratio dropped to 0.63 from 0.73 earlier this month
• Some strategists believe a Warsh rate hike would 'signal Fed independence' and cause the long end of the yield curve to rally, benefiting long-duration tech stocks
• Gold ETF (GLD) trading showed 13,500 calls bought versus under 11,000 puts with a slightly positive delta imbalance, potentially the 'tie-breaking point' favoring those expecting no hike

Around 6,000 Audi workers protested on July 29, 2026, against the potential closure of the Neckarsulm plant in Germany, one of four Volkswagen Group facilities at risk of shutting down after 2030. The protest reflects mounting pressure on Germany's auto industry from high costs, Chinese competition, and U.S. tariffs, as Volkswagen pursues a sweeping overhaul that could involve up to 100,000 job cuts across the group.

• The Neckarsulm plant employs about 15,000 workers and produces Audi's A5, A6, A8 models and the e-tron GT electric vehicle
• Volkswagen CEO Oliver Blume is exploring alternatives to closure, including defense partnerships and producing Chinese models at underutilized German factories, though no decisions have been made
• The local mayor warned closure would be 'a disaster' with far-reaching domino effects across Baden-Wuerttemberg, a region where Mercedes-Benz, Porsche, and Bosch are also under pressure

Demand for credit default swaps (CDS) tied to AI-focused tech companies has surged as investors seek insurance against potential defaults amid concerns about when massive AI investments will generate returns. Oracle CDS trade around 200 basis points, significantly above Nvidia at 78 bps and Meta at 93 bps, reflecting growing uncertainty despite blockbuster earnings. Tech sector CDS trading reached nearly $650 million in Q2 2024, up 600% year-over-year.

• The single-name CDS market is worth about $9 trillion globally, with average daily trading at $16 billion in Q2, up from $13 billion a year earlier
• Tech company CDS trading surged nearly 600% year-over-year to $650 million in Q2 2024, driven by new entrants like Meta, Nvidia, and Alphabet as firms raise billions in debt to fund AI infrastructure
• A CDS spread of 100 bps costs $1 annually to insure every $100 of debt; rising spreads can create a self-reinforcing cycle by prompting bond sales and raising borrowing costs for issuers

U.S. corporate profit growth has surged dramatically, with S&P 500 aggregate earnings estimates reaching 39% annual growth through Q2, up over 10 points from early month projections. However, markets face heightened uncertainty as SK Hynix's record profit jump missed forecasts, sending South Korean chip stocks down sharply and raising concerns ahead of Microsoft and Meta earnings. The Federal Reserve's highly anticipated policy decision adds further tension, with futures pricing a one-in-three chance of a rate cut in what Deutsche Bank calls the most divided market positioning since 2018.

• SK Hynix shares fell nearly 10% despite a six-fold quarterly profit jump that missed expectations, dragging the KOSPI index down 6% and setting a cautious tone for U.S. megacap tech earnings
• S&P 500 annual profit growth estimates have ballooned to 39% through Q2, representing a significant increase of more than 10 percentage points since the start of July
• The Fed decision is one of the most uncertain in years, with markets split on rate cut expectations and multiple dissents likely; investors are also scrutinizing AI capex spending after Alphabet and Tesla disappointed last week

Federal Reserve Chair Kevin Warsh has reintroduced money supply measurements (M2) into Fed monetary policy reports after a decade-long absence, suggesting that tracking money supply could help identify longer-term inflation trends. While Warsh emphasizes it should be part of a 'mosaic of information' rather than a primary policy driver, some economists believe greater attention to M2's record 27% surge in early 2021 might have helped the Fed anticipate persistent inflation earlier. However, skeptics argue the relationship between money supply and inflation remains unreliable after decades of financial innovation.

• M2 growth hit a record 27% in early 2021, more than a year before the Fed began raising rates to combat inflation that reached 7.2%; current M2 growth stands at 5.6% as of May while inflation remains at 4.1%, double the Fed's 2% target
• Former Fed officials like James Bullard support monitoring money supply for 'really serious' movements in either direction, and Deutsche Bank found excess money supply positively correlated with inflation during periods of fast growth
• Critics including former Fed staffers argue M2 was removed from consideration 'for good reason' as it has not been a reliable inflation predictor for decades, and much pandemic-era money creation remained as bank reserves rather than entering the broader money supply

Russia is preparing to extend its diesel export ban, originally set to expire July 31, by one month, though it could be lifted in mid-August if domestic supply improves. The ban was implemented on July 8 following Ukrainian drone attacks on oil refineries that triggered fuel shortages and price spikes. The restriction has tightened global diesel markets and sent prices soaring worldwide.

• Russian diesel loadings plummeted to 234,000 barrels per day in early July, down from 400,000 bpd in June and an average of 817,000 bpd in 2025
• Russia is typically the world's second-largest diesel exporter after the United States, making the ban significant for global supply
• The export restrictions force regular buyers like Turkey and Brazil to compete with European countries for U.S. diesel cargoes, exacerbating shortages even in countries that no longer purchase from Russia

Foreign-branded phone shipments in China, including Apple devices, surged 66.3% year-over-year to 3.28 million units in June 2026, according to data from China Academy of Information and Communications Technology. This strong performance contrasts sharply with overall Chinese phone market shipments, which declined 15.3% to 19.15 million handsets during the same period.

• Foreign phone brands gained significant market share, with shipments reaching 3.28 million units in June, up 66.3% from the prior year
• China's total phone market contracted 15.3% year-over-year to 19.15 million handsets, indicating foreign brands are outperforming domestic competitors
• Apple appears to be the primary beneficiary among foreign brands in the Chinese smartphone market during this period

French luxury group Hermes reported a 6.7% increase in second-quarter sales to €4.1 billion ($4.67 billion), showing slight acceleration from first-quarter growth of 6%. The results were driven by recovering European tourism and strong U.S. demand, meeting investor expectations amid broader concerns about the luxury sector's performance.

• Sales growth of 6.7% (currency-adjusted) slightly exceeded the 6% growth rate from Q1 2025
• Performance was fueled by a recovery in European tourism and continued strong demand in the United States
• Results came after LVMH disappointed investors, highlighting Hermes' relative resilience in a challenging luxury market environment

EDP Renewables (EDPR), the world's fourth-largest wind energy producer, reported a 33% jump in recurring first-half net profit to €183 million, beating analyst expectations of €170 million. The strong performance was driven primarily by expansion in U.S. operations, which accounted for 62% of recurring EBITDA.

• Recurring EBITDA rose 8% year-on-year to €1.03 billion, with U.S. operations representing 62% of the total; excluding foreign exchange effects from a 7% dollar depreciation, net profit would have surged 43%
• Portfolio expansion added 1.8 GW of gross capacity over 12 months (48% in North America, 36% in Europe), bringing total capacity to 20.5 GW, while electricity generation increased 4% to 22.1 TWh
• Asset rotation gains jumped to €66 million from €12 million year-earlier, driven by mature asset sales in Italy, while operating expenses decreased 2% due to efficiency measures

Aston Martin reported a narrower second-quarter adjusted operating loss of £52 million, compared to £57 million a year earlier, supported by strong sales of its Valhalla plug-in hybrid supercar and cost discipline. The British luxury carmaker maintained its annual forecast despite challenging market conditions and headwinds from U.S. tariffs and Chinese luxury car taxes.

• Q2 adjusted operating loss was £52 million ($69.14 million), improved from £57 million last year but missed market expectations of £45 million
• Sales bolstered by the new Valhalla plug-in hybrid supercar amid the company's push for EV technology production
• Company navigating tariff pressures in the U.S. and luxury car taxes in China through cost-cutting initiatives including reduced five-year spending plans

The AI infrastructure boom is transforming Asia's air cargo industry, with semiconductor and AI hardware shipments replacing cross-border e-commerce as the primary growth driver. Korean Air reports AI-related cargo has overtaken China e-commerce shipments, while stricter U.S. and EU import rules dampen low-value e-commerce trade. Airlines are redesigning routes around chip manufacturing hubs in Taiwan, South Korea, Japan, and Southeast Asia to capitalize on multi-year chip orders and data center investments.

• Korean Air's cargo revenue jumped 46% in Q2 to $1.07 billion, driven by AI chips and data center infrastructure, with advanced chip orders already extending 2-3 years into the future
• Global semiconductor sales doubled year-over-year in April 2024 (strongest growth since 1986), while China's e-commerce exports fell 7% in May, marking six consecutive monthly declines
• AI-related goods account for 53.5% of air cargo value in 2025 despite comprising only 7% of volume, with shipments requiring specialized handling for delicate, high-value semiconductor equipment and server racks

China's market regulator will meet with solar industry representatives on Friday to address pricing compliance and cost-accounting standards in an effort to curb destructive competition. The solar sector has been suffering from a prolonged price war caused by excess capacity, with leading companies operating at losses for years. This represents a renewed crackdown on 'involution-style' cutthroat competition affecting multiple Chinese industries.

• Top solar manufacturers reported first-half losses reaching billions of yuan in July, despite government pledges a year earlier to reduce overcapacity
• The destructive price war extends beyond solar to electric vehicles, lithium batteries, and cement sectors, viewed as a sign of broader economic malaise
• Previous regulatory efforts have failed to meaningfully reduce the overcapacity that continues to weigh on solar prices and industry profitability

Audi unveiled its new flagship Q9 SUV, a three-row luxury vehicle starting at $89,095, as part of a product push to reverse declining U.S. sales. The German automaker's U.S. sales are down 17% through June 2026, hurt by tariffs and the end of federal EV incentives. Unlike rivals BMW and Mercedes-Benz, Audi imports 100% of its vehicles to the U.S., making it more vulnerable to tariffs.

• The Q9 SUV (starting at $89,095) and high-performance SQ9 variant ($119,395) are part of three new SUV launches this year, targeting the profitable full-size luxury segment dominated by Mercedes GLS and BMW X7
• Audi's U.S. sales dropped 16% in 2025 and are down 17% in the first half of 2026, with Q1 2026 showing a 30% decline year-over-year, while competitors BMW (+4.7%) and Mercedes (-3.5%) performed better
• The brand lacks U.S. manufacturing facilities unlike BMW and Mercedes, making it fully exposed to tariffs; analysts cite this structural disadvantage and its heavy EV investment as key challenges despite the new product launches

Oil prices surged over 3% in Asian trading after Iran launched ballistic missile attacks on U.S. forces in the Middle East, reigniting regional tensions. The U.S. and Saudi Arabia retaliated by striking Iran-aligned targets in Iraq following more than 30 drone attacks over three days. Separate incidents in the Red Sea and potential threats to Saudi oil facilities are compounding supply concerns.

• Brent crude futures jumped 3.42% to $86.97 per barrel, while U.S. crude advanced 3.58% to $82.09 per barrel following Iran's ballistic missile attack on U.S. bases
• U.S. and Saudi forces struck 'multiple terrorist logistics and weapons sites' in eastern Iraq on Tuesday in retaliation for over 30 drone attacks by Iran-aligned groups in the past three days
• Additional supply concerns emerged from reported 'suspicious activity' in the Red Sea and potential Houthi threats to Saudi oil production, storage, and port infrastructure

Australian wealth manager Perpetual rejected Swedish private equity firm EQT AB's revised A$2.55 billion ($1.78 billion) takeover bid, stating the offer is not in shareholders' best interests. EQT has been progressively increasing its offer to acquire the Australian wealth manager and trust business, with the latest proposal representing a roughly 4% increase from its initial approach.

• EQT's latest bid values Perpetual at A$22.50 per share, totaling approximately $1.78 billion
• The Swedish firm has incrementally sweetened its offer, with the current proposal representing about 4% higher than the initial bid
• Perpetual's board rejected the proposal, signaling resistance to the takeover despite EQT's progressive price increases