Equities: Chip Stocks Drag While Broad Market Holds
The S&P 500 finished little changed on Monday as most constituent stocks rose but a 2.2% decline in a gauge of semiconductor giants kept the index pinned. The Nasdaq 100 fell 0.3%, weighed by Nvidia’s 5% slide and AMD’s 5.17% decline, while the Dow Jones Industrial Average outperformed with a 0.5% gain. The MSCI World Index edged up 0.1%.
The damage was concentrated in chipmakers. Nvidia dropped on circular-financing worries tied to its $750 billion-plus deal pipeline. ASML Holding sank as much as 8.3% after reports that a Chinese state-backed firm has begun mass-producing immersion DUV lithography tools, sparking jitters across chip-equipment peers — ASM International fell 7.3%, BE Semiconductor slid 9.9%, Applied Materials declined 6.7% and Lam Research dropped 7.9%. SK Hynix slipped below its US IPO price.
Away from semis, the tone was constructive. Apple rose 1.2%, Microsoft gained 1.94%, Google added 2.13% and Oracle jumped 4.27%. Salesforce rallied 6.07%. JPMorgan’s tactical positioning monitor is pointing to “material upside” for the S&P 500, with the desk led by Andrew Tyler flagging benefits from lower bond yields, a weaker dollar and strong corporate earnings — while warning of crowded positions in semiconductors and Iran-war risks.
Geopolitics & AI: Iran Talks Lift Mood, Nvidia Deals Raise Questions
The overnight session was dominated by two opposing forces. On the geopolitical front, President Trump said the US and Iran were engaged in diplomatic talks to end their conflict, with the US having paused strikes for a third straight day. “The only reason they want to meet is because we’ve been hitting them very hard,” Trump told reporters. “There’s a good chance that something could happen. If it doesn’t, we go back to doing what we were doing.” Separately, Iran and Oman are trying to reach an agreement to restart shipping through the Strait of Hormuz.
Veteran strategist Louis Navellier framed the oil retreat as a preview of what comes next for equities: “In yet another example of where stocks are headed once the Iran conflict is over, a suspension of attacks over the weekend has pushed crude oil prices lower, and interest rates are following. That implies further equity upside when the conflict is fully over.”
Nvidia is working on AI deals worth more than $750 billion, including a $500 billion-plus partnership with SK Group and talks to backstop as much as $250 billion for OpenAI to lease computing power from a SoftBank-backed US data centre. The cost of protecting Nvidia’s debt against default surged by the most on record. “While Nvidia’s investments and partnerships reinforce confidence in long-term AI build-outs, investors remain concerned about circular financing,” said Gary Tan at Allspring Global Investments. “Capital is increasingly being used to fund future AI customers and infrastructure deployments.”
In China, memory chipmaker CXMT surged 466% on its Shanghai debut to become China’s largest onshore-listed company. Asia’s biggest IPO of the year raised about $8.6 billion, giving it a valuation of more than half a trillion dollars. Given US restrictions on Chinese chips, CXMT is likely to be pivotal in China’s development of its own tech and AI ecosystem. Separately, Moonshot AI released its Kimi K3 model for public download — with 2.8 trillion parameters, it is the world’s largest open-weight model, further demonstrating Chinese AI capabilities closing the gap on American leaders.
Energy, Commodities & FX: Oil Plunges as Iran Pause Holds
Crude oil prices collapsed on Monday. West Texas Intermediate fell 8.4% to $81.77 a barrel while Brent settled around $88, retreating sharply from triple-digit levels reached last week. The selloff was triggered by the US pausing strikes on Iran for a third consecutive day after 13 straight days of attacks, with Iran indicating it would reciprocate. Some reports suggested the US was running low on munitions, but the market is now treating $100 oil as a pinch point that focuses minds in Washington.
Core US capital goods orders rose 0.9% in June, with shipments surging 1.9% — the largest advance since December 2021 — powered by the AI investment boom. “Equity markets are still wrestling with the valuations of many of these tech companies, but one thing is certain, and that is the capex expenditures of corporate America are keeping the economy afloat despite caution in other sectors,” said Christopher Rupkey, chief economist at FWDBONDS. The AI-driven strength in capex is a double-edged sword for the Fed, however — supporting activity while potentially sustaining inflationary pressures.
Spot gold rose 0.7% to $4,082.16 an ounce. The 10-year Treasury yield fell 3bp to 4.65%, Germany’s 10-year dropped 4bp to 3.13%, and Britain’s 10-year declined 4bp to 5.00%. The Bloomberg Dollar Spot Index was little changed, with the euro steady at $1.1372, sterling down 0.3% to $1.3291, and the yen little changed at ¥163.74. Bitcoin rose 0.5% to $64,889.
Corporate Highlights: Mega Deals and IPO Frenzy
Nvidia’s deal spree extended beyond the SK Group partnership. The chipmaker committed $5 billion to Ilya Sutskever’s Safe Superintelligence Inc. and invested $1 billion in South Korean internet company Naver to help finance an AI data centre. Collectively, Nvidia has announced more than $540 billion of similar deals this year alone, excluding the potential OpenAI arrangement. CEO Jensen Huang called it “the golden ages for Korea” and pushed back on circular-financing critiques: “The idea that it is circular is — it’s ridiculous.”
In other corporate news, Paramount Skydance CEO David Ellison said he is “highly confident” in a planned $110 billion takeover of Warner Bros. Discovery despite legal challenges. Jersey Mike’s Subs has attracted investor demand for more than 10x the available shares ahead of its IPO pricing on Wednesday. Sarepta Therapeutics appointed former AbbVie executive Michael Severino as CEO.
JPMorgan Chase’s market intelligence desk led by Andrew Tyler said its tactical positioning monitor is pointing to “material upside” for the S&P 500, while flagging risks from crowded semiconductor positions and the Iran war. The team remains “tactically bullish,” anticipating US equities will benefit from lower bond yields, a weaker dollar and strong corporate earnings.
ASX Outlook & Day Ahead
Australian shares are set to open lower after oil plunged and tech shares were hit by another selling wave in New York. ASX 200 futures were down 23 points or 0.3% to 8,818 near 6.05am AEST. The key semiconductor index pared its losses but Nvidia mostly held its decline, shedding 5%. Apple rose 1.2%, providing some offset for local tech sentiment.
The ASX faces a cautious open as the oil plunge offers relief for energy-sensitive consumers and inflation expectations, but chipmaker weakness will weigh on the local tech sector. RBA Governor Michele Bullock speaks at the Anika Foundation Fundraising Lunch at 1.05pm AEST in Sydney — markets will parse her remarks for any signals on the rate path ahead of a packed global week.
- ASX Open (10.00am AEST) — Futures point to a 23-point or 0.3% decline to 8,818. Oil’s sharp retreat may support energy-sensitive sectors but chipmaker weakness will weigh on tech.
- Whitehaven Coal & Iluka Resources (Reporting Today) — Both companies release results, with coal prices under pressure from the oil selloff narrative and mineral sands demand in focus.
- RBA Governor Bullock Speech (1.05pm AEST) — Speaking at the Anika Foundation Lunch in Sydney. Any commentary on the rate path or inflation outlook will be closely watched.
- US Durable Goods (10.30pm AEST) — June data already showed core capital goods orders up 0.9% and shipments surging 1.9%, the strongest since late 2021, driven by AI capex.
- US 2-Year & 5-Year Note Auctions (Overnight) — Auction results will test demand for US government debt as the 10-year yield sits at 4.65% with the Fed decision looming Wednesday.
- Fed Decision Preview (Wednesday US) — Rates expected to hold at 3.50–3.75%, but a roughly one-in-four chance of a hike is priced into futures. Megacap earnings from Apple, Amazon, Microsoft, Meta and Qualcomm also due this week.
