Global equity markets came under pressure, led by a sharp sell-off in technology and semiconductor stocks. The decline followed substantial gains from the March lows, with the Nasdaq having risen more than 20% and semiconductor stocks more than doubling over the period. Technology-heavy indices in Asia suffered steeper losses, including a 10% fall in South Korea’s KOSPI.
Despite the pullback, the broader backdrop remains constructive. Corporate earnings growth in the US remains strong, manufacturing activity shows signs of improvement, and defensive sectors helped limit broader losses. Historical patterns suggest that the first half of July has often been a favourable period for equity market returns.
Latest market and economic update
The following section covers recent developments across Asian, US and European equity markets, along with movements in currencies, oil prices and geopolitical events that are influencing investor sentiment.
Asian markets
Asian equity markets traded within a narrow range as easing geopolitical tensions in the Middle East provided some relief to sentiment. However, concerns over elevated valuations in technology stocks, particularly those linked to artificial intelligence investment, limited any meaningful advance.
South Korea’s KOSPI bounced back by 2.2% after the previous session’s steep decline, recovering a portion of the prior session’s losses. Japan’s Nikkei moved lower as traders continued to price in the likelihood of further interest rate increases from the Bank of Japan. Australian shares edged modestly higher despite a mixed set of domestic inflation readings, leaving the regional picture broadly mixed.
US equity markets
US equity futures pointed cautiously higher in overnight trading following the technology-led decline, with S&P 500 futures rising 0.2% and Nasdaq futures gaining 0.4%, while Dow Jones futures were little changed.
The previous session saw the S&P 500 fall 1.4% and the Nasdaq drop 2.2%. The Dow Jones Industrial Average was largely flat, cushioned by its relatively low exposure to technology stocks. Semiconductor shares were the hardest hit, shedding between 6% and 8% as investors locked in profits following a period in which the sector had more than doubled in value from its March lows. Investors turned their attention to upcoming US PCE inflation data and GDP figures, as well as results from Micron Technology. In after-hours trading, Micron shares recovered 3.5% after tumbling 13.2% during the regular session.
European equity markets
European equities retreated from recent record highs as the broader technology sell-off spread across the Atlantic. The Euro STOXX 50 fell 1.2% and the pan-European STOXX 600 index declined 0.5%.
Chip equipment giant ASML and semiconductor manufacturer Infineon were among the main fallers, weighed down by concerns over AI-related capital expenditure. Industrial names including Siemens and Schneider Electric also moved lower. Pharmaceutical shares provided some resistance, with Sanofi advancing after receiving a positive drug approval decision from European regulators. PMI survey data added to the cautious mood, pointing to a softening of economic activity across the Eurozone.
US dollar and EUR/USD
The US dollar index held firm near 101.4, reaching its strongest level in over a year. The greenback continued to draw support from expectations that the Federal Reserve will maintain a restrictive monetary policy stance, as well as safe-haven buying linked to the technology-driven equity sell-off. Markets are currently pricing approximately a 70% probability of a Federal Reserve rate increase in September. Against this backdrop, the EUR/USD exchange rate stood at 1.1362, reflecting broad dollar strength ahead of the forthcoming US PCE inflation release.
Oil prices
Crude oil prices fell for a third consecutive session, with both Brent and WTI contracts declining around 0.4%. The easing of tensions between the United States and Iran, combined with improved shipping conditions through the Strait of Hormuz, reduced concerns over near-term supply disruption. Markets also reacted positively to the prospect of increased Iranian crude exports coming back onto the market. US crude inventory data showed a smaller-than-anticipated drawdown in stockpiles, adding further mild downward pressure on prices.
In a significant geopolitical development, President Trump announced a nuclear agreement with Iran involving comprehensive inspections of Iran’s nuclear facilities and the lifting of the US naval blockade of the Strait of Hormuz. The move allowed shipping to resume at record levels, contributing to the fall in oil prices. Sanctions relief includes US-controlled funds for humanitarian imports of food and medical supplies from America sector oversight.
Equities on the move
The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news.
Technology and semiconductors
Samsung Electronics recovered a portion of the prior session’s 12% decline after reports emerged that the company could announce a share buyback programme worth up to 90 trillion won over a three-year period. The purchases would support employee compensation plans, potentially reducing free float and supporting the share price amid strong AI-driven demand.
SK Hynix is reportedly preparing to file for a New York ADR listing that could raise as much as US$26 billion. The move would broaden the South Korean chipmaker’s global investor base and follows plans announced earlier in the year. Trading could begin as early as next month, subject to regulatory clearance, reflecting strong institutional appetite for AI-related semiconductor exposure.
Index changes and capital markets
Alphabet is set to replace Verizon in the Dow Jones Industrial Average from 29 June, marking a relatively rare reshuffle of the price-weighted index. The change reflects Alphabet’s substantially larger market capitalisation and its extensive exposure to digital advertising, cloud computing, artificial intelligence and broader online services. Verizon’s lower weight in the price-weighted index prompted its removal after the latest S&P Dow Jones review.
SpaceX launched a five-tranche investment-grade bond offering seeking to raise a minimum of US$25 billion. This is the company’s first dollar-denominated investment-grade issuance and proceeds will be used to refinance existing debt and fund general and AI-related expansion in data centres and infrastructure. Reported demand has reached approximately US$85 billion, underscoring strong investor confidence in the company’s growth trajectory.
Healthcare and consumer
Eli Lilly indicated it plans to bring its oral weight-loss pill to European and British markets in late 2026 or early 2027, subject to regulatory approval. The company intends to begin by targeting self-paying patients through telehealth platforms, mirroring its approach in the United States. It will also pursue public reimbursement pathways where possible, while navigating the implications of US “most-favoured-nation” drug pricing policy for its international strategy.
Carnival Corporation reported second-quarter earnings per share of $0.41 and record revenues of $6.7 billion. Net income rose by more than 20% despite pressure from higher fuel costs and currency headwinds. Although full-year guidance came in fractionally below consensus forecasts, customer deposits reached a record $9 billion and the company’s leverage ratio continued to improve. Geopolitical tensions in the Middle East weighed on forward bookings in some itineraries.
Logistics and energy
FedEx shares fell 6.4% in after-hours trading after the company issued fiscal year 2027 earnings per share guidance of $16.90 to $18.10, materially below analyst forecasts of around $19.86. The disappointing outlook overshadowed a quarterly result that beat expectations on both earnings and revenue. Elevated fuel costs and a cautious trading environment were cited as contributing factors, alongside volatility related to the company’s recent freight business spinoff.
Walmart announced a long-term nuclear energy supply agreement with Constellation Energy Corporation. The deal will supply approximately 176 megawatts of clean, baseload power from the Dresden Clean Energy Centre in Illinois to a new distribution facility. Contracts run for 15 years beginning in 2029 to 2030.
Analyst and broker commentary
Barclays raised its year-end target for the S&P 500 to 7,800 and set a 2027 objective of 8,800, citing stronger corporate earnings but flagging risks from persistent inflation, elevated interest rates and uncertainty around AI-related capital spending. The bank lifted its earnings per share forecasts and pointed to solid industrial activity as a positive underpinning, while noting that the market will increasingly need earnings growth rather than multiple expansion to drive further advances.
Deutsche Bank trimmed its gold price outlook, pointing to a hawkish Federal Reserve, resilient US economic data and soft investment demand. It now forecasts gold at $4,800 per troy ounce by the fourth quarter but cautions that a more aggressive rate-hike scenario could push the metal closer to $3,800. ETF outflows, subdued futures positioning and weaker physical demand from China and India are additional headwinds highlighted by the bank.
Susquehanna initiated coverage of SpaceX with a Neutral rating and a price target of $170, acknowledging the company’s leading position in launch services, Starlink satellite broadband and artificial intelligence infrastructure. While projecting strong revenue and EBITDA growth through 2030, the broker concluded that the current valuation already captures much of the upside case. Risks cited include potential delays to the Starship programme, intensifying competition and customer concentration within the AI segment.
Baird reiterated an Outperform rating on Tesla with a $522 price target, forecasting approximately 392,900 deliveries in the second quarter. The broker expects a merger between Tesla and SpaceX within the next 12 to 18 months, pointing to operational synergies between the two businesses. Key near-term catalysts for Tesla include the robotaxi programme, Optimus robot production, Full Self-Driving expansion, the Semi truck rollout and new energy storage products.
Evercore ISI downgraded Nike to In Line from Outperform, citing weakening channel checks, a lack of near-term product innovation and the risk of downward revisions to consensus earnings forecasts ahead of an analyst day in the autumn. Concerns include order cancellations in US wholesale channels, softness in the Jordan retro category and delayed European product shipments. Earnings estimates were reduced, though performance-focused product lines remain healthy and the valuation is near multi-year lows.
Raymond James reiterated a Market Outperform rating on ServiceNow with a $130 price target, highlighting early evidence that customers are accepting price increases above the company’s previously guided 20% to 30% range as they transition to new AI-enabled subscription tiers. The broker noted that accelerated contract renewals ahead of a legacy pricing cutoff at the end of June could provide a near-term boost to revenues and margins.
RBC Capital Markets initiated coverage of GE HealthCare with an Outperform rating and an $80 price target, highlighting AI-driven demand in medical imaging, diagnostics and healthcare software as key growth drivers. The broker pointed to a $22 billion order backlog and an expanding base of recurring revenues, and forecast steady growth in sales and earnings through 2027, supported by new product launches and improving cost efficiency.
Bernstein lowered its near-term outlook for Puma ahead of second-quarter results, expecting revenue to fall approximately 9% in constant currency terms and forecasting weaker earnings per share due to challenging comparisons in the United States and a normalisation of consumer demand. Revenue headwinds are most pronounced in the Americas, while Asia Pacific continues to show growth. Gross margins are expected to show modest improvement but earnings estimates were reduced overall.
Morgan Stanley cut its price target on Moncler to €57, maintaining an equal-weight rating. The bank forecasts earnings below market consensus and sees limited near-term upside from US market expansion, projecting roughly 5% retail sales growth in the second quarter against higher market expectations. Weakness in Asian tourism visiting Europe is identified as a risk, although the United States represents a longer-term growth opportunity.
Citi reduced its price target on Volkswagen to €94 from €110, reflecting faster-than-expected declines in Chinese sales volumes and ongoing structural pressures in the European automotive market. Earnings forecasts were lowered through 2028, with weaker operating margins and free cash flow generation anticipated. Despite the cuts, Citi retained a Buy rating, pointing to low valuation and the embedded asset value of the Porsche stake and Volkswagen’s financial services division.
Upcoming data and events
Wednesday’s data includes Germany’s Ifo Business Climate and key US housing indicators such as mortgage rates, applications, building permits and new home sales. Energy reports cover EIA crude oil, gasoline and distillate stocks. US Treasury auctions also feature. Earnings highlights include Micron Technology, Inc., Raymond James Financial, Inc. and Jefferies Financial Group Inc.
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