MPC Markets Morning Call — 8 July 2026: Chips Sink & Ceasefire Under Threat

Wall Street’s best-performing corner got taken to the woodshed on Tuesday. The Philadelphia Semiconductor Index slumped 4.7%, dragging the Nasdaq 100 down 1.8% and the S&P 500 off 0.5% to 7,501. The Dow shed 0.3% to 52,925.

The trigger was Samsung Electronics. The company posted preliminary Q2 operating profit of 89.4 trillion won ($59 billion) — a staggering 19-fold increase from a year ago that topped consensus — but its Seoul-listed shares still dropped 7%. SK Hynix fell 6% in sympathy, pulling the KOSPI down almost 5%.

The logic? All the good news was already in the price. Samsung’s stock had more than doubled year-to-date before the results, and SK Hynix had tripled. As AJ Bell’s Dan Coatsworth put it: “Investors might have taken the view all the good news is now in the price, and that it was time to take some money off the table.”

US memory and chip names bore the brunt: Intel dropped 9.7%, Western Digital 7.6%, KLA and Applied Materials lost over 5%. Nvidia slipped 2.5%, partly on a Reuters report that DeepSeek is developing its own inference chip to reduce reliance on Nvidia and Huawei silicon. The project is early-stage but the market took notice.

Away from chips, the picture was more nuanced. Most S&P 500 stocks actually rose on the day. Energy led sector gains (XOM +3.9%), Meta jumped 2.6%, Eli Lilly added 3.0%, and J&J gained 3.1%. Ed Yardeni captured the mood: “The overall stock market might dodge a correction if investors rotate into sectors that have lagged.”

Global equity indices — daily and 5-day performance with technical signals. Source: Investing.com

YTD world stock index performance. STOXX Europe leads at 38.5%, Shanghai 10.1%, while the S&P 500 has returned 8.3%. Source: LSEG Datastream, Reuters

SpaceX’s rocky Nasdaq 100 debut: The $2 trillion-plus rocket and satellite company joined the Nasdaq 100 on Tuesday but fell nearly 7% on its first day in the index. Over a dozen banks initiated coverage — BofA, Citi, Deutsche, Goldman — all bullish. Raymond James went furthest with an $800 price target implying a $10.5 trillion market cap, driven by a view that AI (not rockets) will account for 94% of SpaceX revenue by 2035.

SK Hynix listing: The $28 billion US ADR offering is multiple times oversubscribed ahead of Thursday pricing. About 1,000 institutional investors joined a management call on Monday. Baillie Gifford, Coatue and Situational Awareness Partners have flagged interest in up to $7 billion worth of shares. If it prices as expected, it would be the biggest-ever US listing by a foreign company.

Other movers: Rivian slumped 18% after announcing a share offering that overshadowed strong preliminary results. Amazon’s latest $25 billion bond offering drew $62 billion in orders — big, but roughly half the demand for its $37 billion deal in March. Microsoft announced it’s starting to replace OpenAI and Anthropic models with its own in products like Excel and Outlook.

The interim peace deal between the US and Iran, signed just three weeks ago on 17 June, is under serious strain. Three oil tankers were attacked in and around the Strait of Hormuz over 24 hours — two hit by unknown projectiles, a third by a drone. It was the biggest day of attacks since the ceasefire took effect.

Washington responded on two fronts. The Treasury Department revoked the 60-day waiver that had allowed Iran to sell oil globally, barring new sales after 7 July. Hours later, US Central Command launched what it called “powerful strikes” against Iran, saying the action was meant to “impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway.”

Both sides are accusing the other of violating the agreement. Iran’s Deputy Foreign Minister vowed “decisive actions” in response. A US official said Iran would only get the deal’s benefits if it behaves — but added that negotiators continue working toward a final agreement, suggesting Washington hasn’t abandoned the peace process entirely.

Qatar condemned an attack on its vessel the Al-Rekayyat and held Iran “fully legally responsible.” Saudi Arabia identified another target as the tanker Vijian and likewise condemned the strike.

Competing transit routes through the Strait of Hormuz. Iran insists vessels use its northern corridor; Western navies back the Omani route. Source: Bloomberg, Joint Maritime Information Center

The US Navy’s top officer, Admiral Daryl Caudle, disclosed that Iran has laid mines in the strait to channel shipping toward Iranian shores. “There’s no chance they’re not there,” he said. The UN’s International Maritime Organization estimates about 80 mines have been laid, while CENTCOM says US strikes have destroyed over 90% of Iran’s estimated 8,000-mine storage inventory.

Talks were suspended as Tehran began a five-day funeral for the late Supreme Leader Ali Khamenei, killed on the first day of the conflict in late February. He will be buried in Mashhad on 9 July. Qatar said the next negotiating session would be scheduled as soon as possible after the ceremonies.

NATO in Ankara: President Trump attended the NATO Summit Defence Industry Forum in Turkey but was openly critical, saying he wouldn’t have attended if not for his friendship with Erdogan. NATO announced $40 billion in counter-drone investment commitments and procurement of up to five Northrop Grumman Triton aircraft. Trump floated the possibility of selling F-35s to Turkey despite a Congressional ban, calling Turkey “in many ways, much more loyal than other countries.”

All 31 NATO members now meet or exceed the 2.0% of GDP defence spending target. Poland leads at 4.3%. Source: Atlantic Council, NATO, Reuters. MPC Markets Research

France: A French appeals court upheld Marine Le Pen’s conviction for misuse of public funds but shortened her ban from running for office. Her National Rally party leads polls less than a year before Macron steps down. She’ll be required to wear an electronic ankle tag.

World Cup: The US was eliminated 4–1 by Belgium in a match overshadowed by Trump pressing FIFA president Infantino to review a red-card ban on US striker Folarin Balogun.

Oil was the dominant cross-asset story. WTI surged 5% to $71.98 and Brent touched $75.76 — the sharpest one-day move since the ceasefire was signed. The catalyst was a one-two punch: the Hormuz attacks followed by the US revoking Iran’s oil sales waiver. European gas futures jumped roughly 7%.

The reversal comes just as oil flows and production from the Persian Gulf were approaching pre-war levels. Brent had peaked near $125 in late April during the height of the US–Israel campaign against Iran and had only recently returned to pre-conflict prices. Monday’s levels had suggested the market was pricing in peace — that assumption is now being tested.

Commodity and currency moves — crude the standout mover. Lithium and uranium under pressure on the 5-day. Source: MPC Markets Research

Gold fell 1.2% to $4,115 despite the geopolitical flare-up. The drop reflected a more pressing concern: if energy prices stay elevated, the Fed may hold rates higher for longer — or even hike — making the opportunity cost of holding gold more painful. Treasury yields confirmed the shift, with the 10-year climbing 7 basis points to 4.54%, a four-week high.

Currencies: The dollar edged up 0.2%. The yen held near 40-year lows around 162 per dollar, keeping traders on intervention watch. The euro slipped 0.2% to $1.1416, sterling fell 0.2% to $1.3361. Bitcoin was flat at $63,819.

The US trade deficit widened 42% in May to $77.6 billion, though it came in roughly $900 million narrower than expected. New York Fed President John Williams said he has grown less worried about inflation due to energy price declines — a comment that looks awkwardly timed given Tuesday’s crude spike.

Bond markets are pricing in the tension. The 10-year Treasury yield hit a four-week high at 4.54%, up 7 basis points. Germany’s 10-year added 5 bps to 2.99%, and the UK’s gilt yield rose 5 bps to 4.85%. If oil stays near these levels, the inflation narrative that the market had largely put to bed could come roaring back.

Skew and VIX both at cycle lows — hedging demand is at a record low, the market is positioned for complacency. Source: Bloomberg, CBOE. MPC Markets Research

The sentiment chart tells an important story right now. Both options skew and the VIX have collapsed toward cycle lows, meaning hedging demand is near record lows and the market is positioned for calm. That’s a contrarian warning sign when geopolitical risk is spiking and the chip trade is unwinding. Earnings season kicks off next week with the big banks, and the real test for tech will come when the hyperscalers report — any miss against elevated expectations could accelerate the rotation.

ASX 200 futures were down 39 points or 0.4% to 8,743, pointing to a softer open. The local market will need to navigate the twin headwinds of the global chip selloff and the oil spike. Australian energy names should see a bid given the crude move, but tech-adjacent names and anything leveraged to semiconductor supply chains could face pressure.

The chip selloff in Asia was broad and sharp — KOSPI dropped nearly 5%, and the Nikkei was down 2.1%. If the pattern holds, the ASX tech sector will likely follow suit, though local exposure to pure-play semis is limited.

Watch for any escalation in the Strait of Hormuz overnight. If the ceasefire formally collapses, oil could move materially higher and the inflation narrative will shift quickly. The yen sitting at 162 per dollar also puts Japanese intervention risk back on the table, which tends to ripple through Asian FX broadly.