General Market News

The stock market experienced a significant AI-driven sell-off in July 2026, with semiconductor and AI-focused funds declining 17-27% as investors questioned massive capital expenditures by tech companies. Despite the downturn, the average U.S. stock fund remained up 10.3% year-to-date, while defensive sectors like energy (up 7.7%) and dividend stocks outperformed as investors rotated away from high-growth tech.

• Semiconductor ETFs led losses with Invesco Semiconductors falling 27.4% in July, though still up 73% year-to-date; AI-focused ETFs dropped 17-25% as concerns over ROI on AI infrastructure spending intensified
• Rising oil prices (up 21% in July) and geopolitical tensions pushed 10-year Treasury yields to 4.7%, the highest since January 2025, while the Breakwave Tanker Shipping fund surged 81% in the month
• Value stocks outperformed growth in July with large-cap value funds gaining 2.4% versus a 2.9% loss for growth funds; small-cap stocks led 2026 performance with Russell 2000 up 18.1% year-to-date

Hadrian, a manufacturing startup building advanced factories for defense and aerospace, raised funding at a nearly $8 billion valuation, more than quadruple its January valuation. The funding round was led by Baillie Gifford and J.P. Morgan Strategic Investment Group amid surging investor interest in defense tech driven by President Trump's military modernization plans.

• Hadrian's valuation jumped from under $2 billion in January to nearly $8 billion, reflecting massive investor enthusiasm for defense technology startups
• The company will use funds to scale its workforce and Opus software platform, which is already being used by the U.S. Army and Navy to address production challenges in submarines, munitions, and drones
• Hadrian joins a wave of major defense tech funding rounds, including Shield AI at $12.7 billion, Saronic at $9.25 billion, and Anduril topping $60 billion in valuation

U.S. stock futures showed mixed performance on Thursday, with S&P 500 and Dow futures steady while Nasdaq futures fell 0.76% as chip stocks declined despite strong forecasts. Investors focused on potential Middle East peace developments and upcoming economic data, while semiconductor and software stocks pulled back after earnings reports failed to meet elevated expectations.

• Western Digital dropped 15.5% and Sandisk fell 10.1% in premarket trading despite forecasting quarterly revenue above expectations, as results were deemed 'merely excellent' rather than showing re-acceleration for stocks up 200-400% this year
• Software stocks broadly declined following sector earnings, with AppLovin down 18.7% on revenue miss and Datadog losing 22.3% after quarterly results
• Fed rate uncertainty persists as September probabilities for no change versus a hike are now nearly even, compared to 37%/63% split last week, with weekly jobless claims and July payrolls data due this week

A major oil refinery in Russia's Yaroslavl region caught fire after a large-scale Ukrainian drone attack on August 6, with the regional governor reporting 93 drones were shot down. The facility, located 250 km northeast of Moscow, has a processing capacity of 300,000 barrels per day. Four people sustained shrapnel wounds but no fatalities were reported.

• Ukrainian President Zelenskiy confirmed strikes on two Russian refineries: the Slavneft-Yanos facility in Yaroslavl and the Bashneft-Novoil refinery in Bashkortostan
• The Yaroslavl refinery processes 15 million metric tons per year (approximately 300,000 barrels daily) and has been previously targeted by Ukraine
• Ukraine has intensified attacks on Russian oil infrastructure in recent months, causing fuel shortages that authorities have partially stabilized though problems persist in some areas

Ukraine's military conducted long-range drone strikes on Thursday targeting two major Russian oil refineries: the Bashneft-Novoil facility in Bashkortostan and the Slavneft-Yanos refinery in Yaroslavl region. The attacks, part of Kyiv's ongoing campaign against Russian energy infrastructure, aimed to reduce oil revenues that fund Russia's war effort.

• The Slavneft-Yanos refinery in Yaroslavl, located approximately 170 miles northeast of Moscow and hundreds of miles from Ukraine's border, is one of Russia's largest refineries, processing about 15 million tons of crude oil annually and employing over 3,500 people
• The Yaroslavl region faced its largest-ever drone attack with 93 drones destroyed by air defense systems; falling debris ignited fires at the refinery's storage tanks, resulting in four injuries but no casualties
• Ukraine has expanded its strategic targeting beyond energy infrastructure to include attacks on Russia's major retail operations like Wildberries, seeking to create additional economic pressure points

Nigeria's upstream oil regulator expects at least 22 offshore projects to begin production by 2030, attracting up to $50 billion in investment. The initiative aims to nearly double the country's oil production to 3 million barrels per day by 2030 as Africa's top oil producer seeks to boost output and attract new capital through reforms and licensing rounds.

• The NUPRC has cleared more than $57 billion in field development plans since 2024, enabling several projects to move toward final investment decisions
• Nigeria awarded 37 blocks to 31 companies in the 2025 licensing round as part of efforts to open new oil and gas acreage
• Reforms including licensing rounds, infrastructure upgrades, and improved security are being implemented to attract investment and improve the operating environment

China launched its broadest trade countermeasures since October's truce with the U.S., targeting firms that enforce American sanctions and tightening export controls on drones and dual-use technology. The actions come weeks before President Xi Jinping's expected visit to Washington in September, signaling Beijing's strategy to build leverage ahead of bilateral talks while testing the limits of the current détente.

• China sanctioned firms enforcing the Uyghur Forced Labor Prevention Act for the first time, including Arizona-based Compliance Testing, with significant implications for U.S. businesses operating in China
• Beijing implemented strict case-by-case export reviews for drones and related dual-use items to the U.S., while launching its first national security investigation targeting foreign software in imported office equipment
• Analysts view the measures as China replicating Washington's playbook by constraining Chinese technology flows to the U.S., with both sides building leverage for negotiations before the Trump-Xi summit

Britain's Hikma Pharmaceuticals reported a 9% increase in half-year core operating profit and maintained its annual outlook, driven by efforts to expand its product base and streamline manufacturing. The company is preparing for potential U.S. tariffs on generic drug imports, emphasizing that most of its U.S.-sold medicines are manufactured domestically in Ohio and New Jersey.

• Hikma had previously lowered medium-term targets in February due to challenges in one division and U.S. manufacturing delays
• The company positions itself favorably for U.S. supply chain strengthening efforts, with majority of U.S. medicines manufactured domestically in Ohio and New Jersey
• Middle East and North Africa markets account for about one-third of core revenue, making it the second-biggest market after North America

German defence supplier Renk Group AG reported record quarterly order intake of 612.8 million euros in Q2, pushing its total backlog to 7.4 billion euros ($8.55 billion). Despite the strong orders driven by Europe's rearmament efforts, the company maintained its full-year guidance as investors await conversion of orders into earnings and cash flow.

• Second quarter order intake of 612.8 million euros was the highest ever recorded in a single quarter for the company
• First-half order intake reached approximately 1.2 billion euros with a book-to-bill ratio of 1.9 times, indicating strong future revenue potential
• Renk manufactures transmissions for Leopard 2 and Puma armoured vehicles as well as naval propulsion systems, benefiting from increased European defence spending

Europe's natural gas storage has fallen to a record low of 58% capacity, 12 percentage points behind last year, due to tightened global LNG supply from the U.S.-Iran war that closed the Strait of Hormuz. This creates significant risk of price spikes during winter months, potentially driving gas prices from current €53/MWh to as high as €210/MWh in worst-case scenarios, threatening higher energy bills for households and industry.

• The closure of the Strait of Hormuz removed 20% of global LNG supply typically provided by Qatar, forcing Europe to compete with Asian buyers for limited LNG cargoes
• EU storage is 12 percentage points below last year at under 58% full, and analysts forecast only 67-76% peak levels versus the 80% December target, potentially requiring government intervention
• Market 'backwardation' eliminates financial incentive to store gas now, as near-term prices exceed winter prices, while Europe's shift from fixed-price Russian pipeline contracts to spot LNG increases vulnerability to price volatility

Sinopec, the world's largest refiner, has significantly increased purchases of Russian Far East oil to compensate for Middle East supplies disrupted by the Iran war. The Chinese state-owned company bought 30 to 40 Russian cargoes for July-September delivery, totaling approximately 241,000 to 320,000 barrels per day, while sharply cutting Saudi crude imports during the same period.

• Sinopec slashed Saudi oil imports from 20 million barrels in March/April to zero in June/July and just 2 million barrels in August, compared to an 11 million barrel monthly average before the Iran war
• Russian ESPO crude trades at $1-$2 per barrel discount to Brent, making it about $10 cheaper than rival grades from Brazil and the Middle East, helping Sinopec maintain stable refining throughput
• The purchases avoid sanctioned entities by using intermediaries and Chinese yuan payments, representing 5-6% of Sinopec's 5.2 million bpd processing capacity

Oil prices declined with WTI falling to $75 and Brent dropping to $83 as Iran-Oman diplomatic talks raised hopes for a U.S.-Iran peace agreement that could reopen the Strait of Hormuz. Rising U.S. crude inventories, which increased by 2.5 million barrels to 407 million barrels, added further downward pressure on prices despite ongoing geopolitical risks in the Middle East.

• WTI crude oil testing critical $74-$75 support level, with a break below potentially pushing prices toward $66, while Brent crude faces key support at $80-$81
• U.S. crude inventories rose by 2.5 million barrels to 407 million barrels, adding supply-side pressure to the market
• Peace talks could reopen Strait of Hormuz and reduce supply risk premium, though renewed attacks on Saudi tankers and potential Iranian retaliation maintain market uncertainty

JPMorgan CEO Jamie Dimon warned that leverage across financial markets is at elevated levels, with margin debt at record highs, including hidden borrowing through prime brokerages, hedge funds, and Treasury arbitrage strategies. He cautioned that high leverage increases the risk that a single investor or fund could trigger broader market volatility, though he stopped short of calling it a systemic threat.

• Margin debt is at its highest level ever, with additional leverage hidden in prime brokerages, hedge funds, ETFs, and Treasury basis trades that is 'not called margin debt'
• The recent collapse of AI-focused hedge fund Situational Awareness, which triggered margin calls and forced liquidation of its portfolio, demonstrated markets can absorb isolated failures without broader disruption
• Dimon distinguished current conditions from 2008, noting leverage alone doesn't cause systemic stress and warned that structural capital demands from deficits, infrastructure, and global rearmament could reignite inflation

Editas Medicine (EDIT) reported a Q2 2026 loss of $0.15 per share, beating analyst expectations by 50%, with revenues of $11.89 million surpassing consensus estimates by 524.80%. The genome editing company has now exceeded EPS estimates for four consecutive quarters and topped revenue estimates three times in the past four quarters.

• Q2 revenues of $11.89 million significantly outperformed the Zacks Consensus Estimate and represented a substantial increase from $3.58 million in the year-ago quarter
• The company maintains a Zacks Rank #3 (Hold) with mixed estimate revision trends ahead of the earnings release
• Full-year fiscal outlook projects a loss of $1.04 per share on revenues of $16.06 million, with Q3 consensus expecting a loss of $0.31 per share on $1.94 million in revenues

Confluence Asset Allocation's Q3 2026 outlook anticipates continued near-trend US economic growth with low recession risk, supported by dovish Fed policy and fiscal stimulus favoring business investment. The firm expects inflation to persist in the 2.5-3.5% range above the Fed's target, with equity market leadership broadening beyond mega-cap technology stocks. International developed equities and gold are positioned favorably due to fiscal support abroad, valuation advantages, and US dollar weakness.

• The firm excludes US small caps due to expected headwinds from tariff-related cost pressures, higher financing costs, and limited pricing power, while maintaining large-cap exposure with sector emphasis on communication services and defense technologies
• Fixed income strategy involves shortening duration with focus on intermediate maturities, underweighting corporate bonds due to historically tight spreads, and emphasizing US Treasurys and mortgage-backed securities
• Gold allocation maintained across all strategies driven by central bank buying and reserve diversification trends, with new platinum allocation in higher-risk portfolios citing favorable supply-demand fundamentals and industrial demand leverage

Minneapolis Fed President Neel Kashkari called for rate hikes despite a weak ADP jobs report showing only 44,000 positions added in July, well below the 75,000 expected. Markets are pricing in 57% odds of a September rate hike, but analysts argue Fed Chair Kevin Warsh's focus on underlying trends rather than monthly volatility, combined with rising long-term bond yields already tightening financial conditions, makes further hikes unlikely.

• ADP reported just 44,000 private sector jobs added in July, the weakest since January and significantly below the 75,000 forecast, with goods-producing sectors shedding 3,000 jobs
• The 10-year Treasury yield has climbed since late June, effectively tightening financial conditions without Fed action and reducing the need for additional rate hikes
• Three analysts recommend buying AI infrastructure stocks following the resolution of forced selling from the $45 billion Situational Awareness fund liquidation, viewing recent weakness as a capitulation bottom

Federal Reserve Governor Lisa Cook stated she is prepared to support an interest rate hike if inflation does not show signs of improvement soon. Cook, who voted with the majority to hold rates steady at 3.5%-3.75% last week, warned that five years of above-target inflation risks becoming entrenched in price and wage-setting behavior. Markets expect a potential rate increase in September or October.

• Cook considers inflation risks higher than employment risks and warned that prolonged inflation above the Fed's 2% target could become entrenched in the economy
• The Fed voted 9-3 to hold rates steady at 3.5%-3.75% last week, with Cook citing concerns about tariff impacts, Iran war energy shocks, and AI buildout pressures
• Markets are pricing in a Fed rate hike as soon as September, with higher odds for an October move according to CME Group's FedWatch

Oil and gas producer APA exceeded Wall Street's second-quarter profit expectations on Wednesday, driven by higher oil prices resulting from Middle East geopolitical tensions. The U.S.-Israeli conflict with Iran pushed benchmark Brent crude prices up 19.2% year-over-year to average $89.62 per barrel during the quarter.

• APA's realized price per barrel of oil produced jumped to $98.24 from $65.58 a year ago, a 50% increase
• The company reported adjusted profit of $1.89 per share, beating analyst estimates
• APA's operations are primarily U.S.-based, with additional exposure in Egypt, the North Sea, and Suriname, making it vulnerable to commodity price fluctuations from geopolitical events

The Dow Jones closed at a record high of 54,349.92 on Wednesday, gaining 0.49%, driven by Nvidia's 4% rally after securing SpaceX's exclusive AI chip business. However, the S&P 500 and Nasdaq slipped 0.17% and 0.85% respectively, as major tech stocks including Alphabet (down 4% on AI division restructuring) and AMD (down 6% despite beating earnings) dragged on the broader market.

• Nvidia surged approximately 4% after Elon Musk announced SpaceX would exclusively use Nvidia processors for its AI infrastructure, which saw capital spending surge sixfold to $18.4 billion in Q2
• Alphabet fell roughly 4% following an AI division restructuring and the departure of 27-year chief scientist Jeff Dean, raising investor concerns about execution during critical AI competition
• Mixed economic signals emerged as ADP employment data preceded Friday's key jobs report, while Fed rate hike expectations for September eased to 54.9% amid ongoing assessment of labor market conditions

The Trump administration plans to impose a 15% tariff on polysilicon derivative products as part of a Section 232 investigation into foreign imports. The results of the investigation, which is aimed at countering China, are expected to be announced as soon as Thursday. This move will impact the solar industry, as polysilicon is a key material in solar cell production.

• A 15% tariff will be imposed on polysilicon derivative products following a Section 232 national security investigation
• The administration plans to unveil investigation results as early as Thursday, with the tariffs specifically designed to counter Chinese imports
• The tariffs will affect the solar manufacturing industry, where polysilicon is a critical raw material for solar cell production