Market overview
Global equity markets closed higher on Thursday and Friday, with technology and semiconductor names once again doing the heavy lifting. Wall Street’s Thursday session set the tone: the Nasdaq Composite jumped around 1.3%, the S&P 500 added about 0.8%, and the Dow Jones Industrial Average edged up more than 0.25%. The move was driven almost entirely by a semiconductor rebound, with Micron surging following its announcement of a $250 billion domestic manufacturing expansion, while Applied Materials and SanDisk also posted strong gains and Meta Platforms advanced on reports of its AI chip manufacturing plans. Japan’s Nikkei rose more than 1% and European equities traded higher on Thursday, and the rally carried through into Friday trading across Asia and Europe, with U.S. futures little changed overnight.
The 10 year Treasury yield eased slightly to around 4.55%, while crude oil eased on Thursday despite ongoing geopolitical tensions between the United States and Iran.
United States equities and economic data
Labour market and housing signals
Initial jobless claims came in at 215,000, slightly below expectations, reinforcing evidence of a stable labour market with layoffs remaining subdued and unemployment still low. Existing home sales told a different story, falling 2.4% in June as higher long term borrowing costs continued to weigh on housing demand.
Sector rotation and earnings watch
A rotation out of technology and into value oriented sectors such as healthcare, financials and industrials has been a recurring theme, though most desks remain constructive on the longer term technology outlook given robust earnings expectations and sustained investment in AI infrastructure. Attention is now turning to the start of second quarter earnings season, with Delta Air Lines reporting on Friday and major U.S. banks set to follow next week.
Asian and European markets
Asian equities extended their gains into Friday, led once again by chipmakers. South Korea’s KOSPI rebounded sharply, while Japan’s Nikkei and TOPIX both advanced on a mix of technology strength and pension fund optimism. Hong Kong, mainland China, Singapore and Australia also posted solid gains.
U.S. equity futures were little changed overnight, with S&P 500 futures edging 0.1% lower, Nasdaq 100 futures slipping 0.3% and Dow futures trading flat. Sentiment remained supported by easing oil prices and hopes of renewed U.S.-Iran diplomacy.
European markets rebounded firmly, with the STOXX Europe 600 gaining 0.8% and the Euro STOXX 50 up 1.2%, as easing concerns over tighter monetary policy and lower energy prices supported sentiment. ASML and Infineon led the advance among chip names, while banks benefited from firmer bond markets and UniCredit rose on renewed takeover speculation.
Currencies and commodities
The U.S. dollar weakened for a third straight session, with the dollar index slipping toward the 100.5 level as easing geopolitical tensions and lower oil prices reduced safe haven demand. The euro firmed to around 1.1444 against the greenback, and the dollar also lost ground against the yen and the New Zealand dollar.
Oil prices eased on Friday, with traders concluding that exports through the Strait of Hormuz remained largely uninterrupted despite the latest exchange of strikes between the United States and Iran. While geopolitical risks continue to support prices, markets pared some of this week’s gains, with attention shifting to tanker movements, Gulf export flows and ongoing diplomatic channels.
Regional diplomatic efforts intensified, with Qatar, Pakistan, Turkey, Egypt and Saudi Arabia all working to preserve the earlier U.S.-Iran nuclear understanding. Despite recent U.S. airstrikes and tougher rhetoric, both sides remained engaged in technical-level talks, with Washington signalling a preference for a negotiated resolution over further escalation.
Stock movers by sector
A number of individual names posted outsized moves on the back of corporate announcements, analyst rating changes and earnings updates.
Technology and semiconductors
Micron Technology was the standout story, unveiling plans to invest more than $250 billion in U.S. based operations through 2035 in a bid to lift domestic DRAM production to 40% of its output. A separate $3 billion supply chain commitment, which includes funding for GlobalWafers, is expected to support roughly 90,000 jobs. Applied Materials and Sandisk also rallied strongly on the read through for equipment and memory demand, with Applied Materials CEO Gary Dickerson highlighting stronger visibility into semiconductor equipment demand as customers plan capacity expansions through 2030. AI-driven chip investment continues to support the outlook, alongside positive industry forecasts. Investors will focus on upcoming earnings for further signs of sustained demand and growth. Cerebras Systems gained after detailing plans for 200 megawatts of new AI data centre capacity across Europe by 2027, with its first site due online in 2026, and an expanded manufacturing partnership with Flex to increase production of its CS-3 AI accelerator systems sevenfold through 2026.
Meta Platforms shares came under pressure despite unveiling plans to double its AI computing capacity by 2027 and to begin producing its first in house AI chip in September. Investors appeared more focused on the scale of spending required than on the long term strategic rationale. SK Hynix, meanwhile, is reported to plan pricing its heavily anticipated U.S. listing at $149 per ADR, a 3.1% premium to its Seoul close, which would make it the largest American share sale by a foreign issuer, surpassing Alibaba’s record, as investor demand for AI-related semiconductor companies continues to strengthen.
Apple is reportedly in talks with Caltech spinout PrismML, whose technology enables advanced AI models to run entirely on smartphones. By dramatically reducing model size without sacrificing performance, the approach could boost privacy, speed and offline capability, while cutting cloud costs and reducing Apple’s reliance on external AI services such as Google’s Gemini.
Oracle shares rose despite S&P Global downgrading its credit rating to BBB-, one notch above speculative grade. Investors focused on the company’s $638 billion cloud contract backlog, overlooking concerns over surging AI-related capital spending, rising debt and widening cash flow deficits. Oracle also plans further equity fundraising to support investment.
Consumer and retail
PepsiCo shares declined despite posting second quarter revenue of $24.18 billion, up 6.4% and ahead of expectations, after the company warned of rising commodity costs. Adjusted earnings narrowly missed forecasts as margins weakened and North American sales stayed soft. Organic revenue grew 2.4%, driven by international strength, and the company reaffirmed its 2026 guidance, although analysts noted pressure on profitability and subdued growth in North America. Costco shares fell after June comparable sales came in below expectations. Starbucks emerged as an unlikely technology story after reports emerged that the coffee chain is developing in house AI software to replace third party systems from vendors including IBM, ServiceNow and Salesforce, sending their shares lower. The move is part of a broader $2 billion cost cutting programme, with Starbucks aiming to replace inventory, maintenance and point-of-sale systems with in-house alternatives.
Automotive and industrials
Volkswagen plans to halve its model range and reduce annual production capacity to nine million vehicles as part of a major restructuring to address weak profitability and excess capacity. Reports suggested as many as 100,000 jobs and four German plants could ultimately be affected, though the company has not confirmed those plans, and the reports have already drawn union opposition.
Healthcare
AstraZeneca shares fell sharply after its experimental heart disease treatment Wainua missed the primary endpoint in a late stage trial. Analysts are expected to trim sales and earnings forecasts for the drug, with focus now shifting to a series of pipeline updates expected in the second half of 2026.
Analyst commentary and rating changes
UBS lifted its STOXX 600 price targets for 2026 and 2027, pointing to broadening corporate earnings strength across sectors including AI, banks and select defensive industries, arguing that improving earnings resilience justifies a less cautious stance despite a subdued European macro backdrop.
BofA Securities upgraded European mining stocks to marketweight after a sharp pullback reduced downside risk, though it remains cautious on the largest miners near term while seeing medium term upside from improving macro conditions and copper demand.
Goldman Sachs raised its Airbus price target on a recovery in commercial aircraft deliveries and lower capital costs, expecting stronger second quarter results supported by improved A320 deliveries, higher volumes and defence demand. Raymond James initiated coverage of SpaceX with a Strong Buy rating and an $800 price target, citing Starship, Starlink and AI infrastructure potential, though analysts remain divided on valuation. Citizens started Tesla at Market Perform, arguing the market may be too optimistic on the timing of its Optimus robot and Robotaxi ambitions and flagging higher costs, production delays and autonomous driving challenges. Bernstein downgraded Salesforce to Sector Weight on weak customer feedback regarding its Agentforce AI product and limited evidence of accelerating adoption, though it still views Salesforce as a strong incumbent platform.
Elon Musk publicly described Anthropic as the current leader in artificial intelligence, praising the OpenAI rival as competition intensifies among frontier AI developers. Anthropic has gained momentum through its Claude models, particularly for coding and workplace automation, and has confidentially filed for a U.S. initial public offering following a substantial recent funding round.
Upcoming economic events
Friday’s U.S. calendar includes the USDA’s WASDE report on agricultural supply and demand, along with the weekly Baker Hughes rig count covering energy sector activity. Earnings focus centres on Delta Air Lines, whose results will offer an early read on travel demand as the second quarter reporting season gets underway, with major U.S. banks due to follow in the coming days.
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