Equities: Inflation Relief Lifts Broad Market, Chips Buckle
The S&P 500 rose 0.4% and the Dow gained 0.3%, extending a two-day winning streak built on softening inflation data. But the Nasdaq 100 fell 0.3% as semiconductor stocks took a beating — Micron dropped 8%, Intel shed 4.4%, and the broader chip gauge lost 2.1%.
The split tells you something about where the market’s head is at. Rotation into value and financials is real. Apple jumped 4% after getting the green light for Apple Intelligence in China. Microsoft rose 2.8% and Google gained 3.2%, both riding the AI infrastructure theme without the chip-specific drag.
Bank earnings were the standout. Goldman’s equity financing revenue rocketed 91% year-on-year to a quarterly record, driven by Asia and AI-linked capital formation. JPMorgan’s equity markets unit pulled in $6 billion, up 86%. Morgan Stanley and Citi posted similar gains. Prime brokerage balances are at record levels across the board.
Goldman CFO Denis Coleman flagged Asia as a “strategic growth area” for prime, noting demand still exceeds what they’re willing to deploy. Morgan Stanley CEO Ted Pick said the capital demand is coming from “equities client base in prime brokerage and in derivatives.”
BlackRock hit a record $15.3 trillion in assets as Larry Fink’s push into active and private markets lifted revenue. PayPal is exploring strategic options after Stripe and Advent tabled a $50 billion-plus takeover approach. Anthropic is meeting investors ahead of a potential mega-IPO, while JPMorgan’s Jamie Dimon warned Anthropic’s Mythos AI model is like “giving ballistic missiles to individuals.”
US–Iran: Fifth Day of Strikes, Hormuz Still Shut
The US hit missile storage and launch sites on Greater Tunb Island in a 90-minute operation, followed by a second wave later in the day. It was the fifth consecutive day of American strikes since the interim peace deal collapsed last week.
Iran’s Revolutionary Guard said the strait stays closed until Washington ends strikes and lifts the naval blockade. Parliament speaker Ghalibaf said Tehran has “no reason to remain committed” to the deal but stopped short of formally tearing it up. Trump claimed Iran wants to talk — Tehran hasn’t confirmed that.
The International Maritime Organization warned the Strait of Hormuz is still too dangerous for commercial vessels. Saudi Gulf oil loadings have slumped as tankers come under fire. The EU’s aviation safety regulator raised threat levels for airlines flying through the Middle East, cautioning against airspace over Bahrain, Kuwait, Qatar, the UAE and the Gulf of Oman.
Congressional Republicans are pressing ahead with increased war spending despite political risks from rising consumer prices. The Trump administration is extending shipping waivers to ease domestic fuel and fertiliser supply chains. US strikes have killed more than 30 Iranian civilians in recent days, according to Tehran.
Energy, Commodities & FX
Oil is the story. WTI rose 1.3% to $80.34 and Brent jumped above $85, posting a 13% weekly gain as the Hormuz situation deteriorates. The crude rally is the biggest risk to the inflation picture — energy saved the day in June’s data, but that tailwind could reverse fast if the strait doesn’t reopen.
Gold was flat. Silver and uranium both sold off over five days (–3.6% and –3.4% respectively). Copper edged up 0.3% daily but gained 2.1% over the week. The Australian dollar strengthened 0.5% on the day and nearly 1% over five days. The US dollar index slipped 0.3% as softer inflation data weighed.
Macro: PPI Drops, But Oil Keeps the Fed on Edge
The Producer Price Index fell 0.3% in June, confounding expectations for a flat reading and marking the biggest monthly decline since April 2025. A 6.4% drop in energy costs and a 12% plunge in gasoline prices drove the headline number. Food prices fell 0.6%. On a year-on-year basis, PPI came in at 5.5%, down from 6.0% in May.
Core PPI (excluding food, energy and trade) edged up just 0.1% month-on-month. Combined with Tuesday’s CPI drop of 0.4% — the largest since April 2020 — economists now estimate core PCE rose 0.2% in June, bringing the annual rate to 3.3%.
Kevin Warsh told the Senate Banking Committee that Trump hasn’t tried to interfere with the Fed — and wouldn’t succeed if he did. “They chose an independent guy to do an independent job, and that’s exactly what I plan on doing.” Markets expect rates on hold at the July meeting, with a hike not fully priced until December.
The Beige Book painted a picture of “slight to moderate” growth with employment levels mostly flat. Contacts cited cost pressures from both the Middle East conflict and tariffs, with consumers showing “greater price sensitivity.” The data effectively rules out a July hike, but oil’s trajectory keeps September on the table.
India pledged $20 billion to boost domestic chip and smartphone production, part of PM Modi’s push to become a global manufacturing hub. The package includes $15 billion for semiconductors and $7.3 billion for mobile phones, building on an earlier $10 billion program that attracted Micron and Tata Group to Gujarat. Electronic computing equipment prices rose 2.5% in the PPI data — a reminder that AI-related inflation pressures haven’t gone away.
ASX Outlook & Day Ahead
ASX 200 futures were up 15 points (+0.2%) to 8821, pointing to a modest open. The local market should get a lift from the positive Wall Street session and strong bank earnings read-through, though the chip sell-off and rising oil prices create cross-currents.
SpaceX shares fell below their IPO price for the first time, shedding $860 billion in market value — worth watching for sentiment around tech valuations more broadly. The Hang Seng’s 2.7% weekly gain suggests Asian risk appetite is holding up, led by AI-linked capital flows that Goldman flagged as a key driver.
Key events for Thursday 17 July 2026:
- Melbourne Institute inflation expectations — due 11am AEST. A gauge of consumer inflation sentiment that the RBA watches closely.
- TSMC earnings — the world’s largest chipmaker reports. Given the semiconductor sell-off overnight, guidance will be scrutinised for AI demand signals.
- Netflix earnings — subscriber growth and ad-tier performance in focus after the stock’s 0.2% gain overnight.
