Wall Street ended Monday’s session firmly higher, with technology stocks once again leading gains as optimism surrounding artificial intelligence and semiconductor companies lifted investor sentiment ahead of the second-quarter earnings season. The S&P 500 and Nasdaq posted solid advances, while the Dow Jones Industrial Average closed at a fresh record high.
Wall Street closes higher on AI and services strength
Markets were encouraged by continued strength in the US services sector, with both the S&P Global and ISM services PMIs remaining in expansion territory, suggesting that the world’s largest economy continues to show resilience despite elevated borrowing costs and persistent inflationary pressures. Investors also monitored developments in the technology sector, including new chip partnerships and fundraising activity, while awaiting earnings reports from major companies later this week.
Treasury yields ease as rate expectations hold steady
US Treasury yields edged lower, with the benchmark 10-year yield easing to around 4.47% as investors continued to assess the Federal Reserve’s likely policy path. Although inflation remains above the central bank’s target, resilient labour market conditions have reinforced expectations that policymakers are more likely to keep interest rates unchanged than move quickly towards easing. Oil prices were little changed, remaining close to pre-Iran conflict levels after OPEC+ confirmed another production increase and as shipping through the Strait of Hormuz continued without major disruption. The US dollar traded broadly steady against major currencies, while gold prices edged lower. Attention now turns to the release of the Federal Reserve’s latest meeting minutes and a busy week of corporate earnings, both of which are expected to provide fresh direction for financial markets.
Asian equities
Asian equities fell on Tuesday, led by sharp losses in South Korea after Samsung Electronics’ record earnings failed to sustain investor optimism.
South korea leads regional losses on samsung and sk hynix
Samsung and SK Hynix tumbled as concerns over the durability of the artificial intelligence-driven rally prompted profit-taking, dragging the KOSPI sharply lower, while Japan’s Nikkei also declined.
Samsung Electronics forecast record second-quarter operating profit, beating expectations as strong artificial intelligence-driven memory chip demand and higher prices boosted earnings. However, shares fell sharply as investors took profits, while revenue narrowly missed forecasts and concerns persisted over the sustainability of the AI-driven memory cycle.
SK Hynix launched a US share sale targeting 43 trillion won, seeking to capitalise on strong artificial intelligence-driven demand for memory chips. The offering attracted significant investor interest and is expected to broaden its global shareholder base. Proceeds will fund semiconductor facilities and equipment, supporting South Korea’s long-term chip industry ambitions.
US stock futures edged lower after Monday’s rally, with investors adopting a cautious stance ahead of the Federal Reserve’s latest meeting minutes and the start of earnings season. Market attention is now turning to upcoming results from Delta Air Lines, PepsiCo and Samsung Electronics, expected to provide fresh insight into corporate performance and the broader economic outlook.
European equities
European equities eased from record highs on Monday, with the STOXX Europe 600 falling 0.4% and the Euro STOXX 50 slipping 0.2%.
Consumer and luxury names weigh on the index
Consumer staples and luxury shares led declines, with Anheuser-Busch InBev, L’Oréal and Inditex weaker. Rising Eurozone bond yields supported banks, while defence companies outperformed, led by Rheinmetall’s 3.5% gain.
Eurozone retail sales beat expectations
Eurozone retail sales rose 1.6% year-on-year in May, exceeding forecasts and accelerating from April’s 0.9% increase. Monthly sales edged up 0.2%, supported by stronger spending on food, drinks, tobacco and non-food goods. The figures suggest consumers remained resilient despite higher energy costs, easing concerns over the economic impact of recent inflationary pressures.
Currency and commodity markets
Dollar remains under pressure as rate hike bets fade
The US dollar remained under pressure on Tuesday, with the dollar index trading below 101 as markets scaled back expectations of Federal Reserve rate hikes following weaker employment data. The greenback softened against most major currencies, with the euro holding near 1.1436, while the yen remained under pressure as the dollar stayed close to 40-year highs.
Oil prices edge higher as strait of hormuz concerns resurface
Oil prices edged higher as renewed security concerns in the Strait of Hormuz offset expectations of increased global supply following Saudi Arabia’s price cuts and OPEC+’s latest production increase. While geopolitical risks provided support, markets continued to focus on rising output, with investors awaiting updated US energy forecasts and monitoring Gulf shipping conditions.
Corporate movers and analyst calls
Mergers, deals and corporate action
easyJet shares surged more than 9% after the airline backed in principle Castlelake’s improved £5.5 billion takeover offer. However, the shares remained below the bid price as investors questioned whether the deal could satisfy complex EU ownership rules. Regulatory approvals, shareholder support and funding arrangements remain key uncertainties ahead.
Fiserv is reportedly exploring the sale of its STAR payments network, with JPMorgan, Bank of America, Wells Fargo and PNC among banks holding discussions. The potential disposal forms part of the payments firm’s turnaround strategy. However, regulatory scrutiny and political opposition could complicate any deal, leaving its outcome uncertain despite investor optimism.
Thales and Exail Technologies gained after Thales agreed to acquire a controlling stake in Exail, valuing the company at €3.9 billion. The deal, which includes a 44% premium and will be followed by a full takeover offer, strengthens Thales’ naval defence capabilities while promising cost savings, revenue synergies and earnings growth.
Sky has agreed to acquire ITV’s Media & Entertainment division for £1.6 billion, creating one of the UK’s largest commercial broadcasters and streaming businesses. ITV will retain its Studios business, receive around £1.05 billion in net proceeds, reduce debt and return approximately £950 million to shareholders through a planned capital distribution.
Broadcom extended its partnership with Apple until 2031 to develop and supply custom chips, reassuring investors over its long-term role in the iPhone supply chain. The agreement reduces concerns that Apple will replace Broadcom’s technology, while providing greater supply certainty. Shares in both companies rose following the announcement on Monday.
European defence shares rallied after NATO Secretary-General Mark Rutte said rising allied military spending was stretching weapons manufacturers’ capacity ahead of this week’s NATO summit. Investors anticipated further defence investment and contract announcements, with expectations that increased spending and industrial expansion will support the sector’s long-term growth.
Dell Technologies rose after President Donald Trump publicly encouraged Americans to buy Dell computers, renewing attention on the company. Investors also focused on Dell’s strong AI-driven growth outlook and demand for servers and PC hardware. The presidential endorsement prompted renewed scrutiny over potential conflicts of interest linked to Trump’s disclosed shareholdings.
Nike shares fell after the sportswear group issued cautious guidance despite reporting better-than-expected fourth-quarter earnings. Investors focused on weak consumer demand, falling sales in China, softer revenue forecasts and the boost from a one-off tariff recovery. Several brokers also cut their price targets, reflecting concerns over the pace of Nike’s turnaround.
BE Semiconductor Industries shares fell after reports that Samsung and SK Hynix may delay adopting hybrid bonding technology, raising concerns over the company’s key long-term growth driver. The news added uncertainty ahead of this month’s results and weighed on sentiment, alongside broader weakness across semiconductor and technology stocks.
Porsche shares rose after UBS flagged the automaker as a strong Q2 performer, expecting operating margins of around 7% including realignment costs and near 10% excluding them. The bank sees improving sales mix, destocking benefits and strong cash flow, while maintaining guidance and forecasting a return to higher margins by 2030 improves investor sentiment outlook.
Broker upgrades and downgrades
JPMorgan expects semiconductor weakness to provide a buying opportunity, favouring chipmakers over hyperscalers and AI-related stocks. The bank sees broader equity market participation in the second half of 2026, supported by easing stagflation fears, stronger earnings and lower inflation. It also expects global equities to reach fresh highs during the period.
Memory and storage shares advanced after bullish broker updates highlighted stronger pricing and resilient AI-driven demand. Analysts expect the DRAM market to remain undersupplied into 2028, supporting higher prices and earnings. UBS, Citi and Bank of America all maintained positive outlooks, viewing the recent sector pullback as a temporary correction.
Bernstein raised its price target on ASML to €2,300 and maintained its Outperform rating, citing stronger AI-driven demand for chipmaking equipment and higher lithography intensity. The broker increased long-term revenue and earnings forecasts, expecting sustained growth in EUV systems, while highlighting High-NA technology as a key future growth driver.
Wolfe Research cut its price target on Microsoft to $525 from $570, citing rising memory costs that are expected to increase AI infrastructure spending and weigh on free cash flow and margins. Despite lowering earnings forecasts, the broker maintained its Outperform rating, remaining positive on Azure growth and Microsoft’s long-term AI strategy.
Piper Sandler reiterated its Overweight rating on Oracle, arguing the company’s cloud infrastructure business could generate around $2.2 billion more revenue than current market forecasts in fiscal 2027. The broker cited accelerating growth, stronger guidance expectations and AI-driven demand, viewing the recent share price weakness as a buying opportunity.
HSBC doubled its price target on Intel to $200 and reiterated its Buy rating, citing stronger server processor demand and growing confidence in the foundry business. The broker expects earnings to benefit from rising data centre revenue, new foundry customers and increasing interest in Intel’s advanced chip packaging technology over coming years.
Bernstein downgraded Datadog to Market-Perform from Outperform, saying its recent share price rally has outpaced underlying fundamentals. Although the broker raised its price target and remains positive on the company’s long-term AI prospects, it warned of slowing enterprise demand, moderating AI growth and a more challenging revenue outlook later this year.
Key data and events to watch this week
US data on Tuesday includes the balance of trade for May, expected at a $78.8bn deficit, alongside exports of $311bn and imports of $396bn. Key sentiment readings include the RCM/TIPP optimism index and consumer inflation expectations. Treasury auctions and oil inventory data also feature, alongside broader measures of economic activity and demand.
President Donald Trump said he expects to meet Chinese President Xi Jinping around 24 September, potentially alongside the United Nations General Assembly in New York. Trump suggested Xi’s visit would include Washington, citing it while discussing plans for a new White House ballroom. The meeting would follow their summit in Beijing in May.
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