Morning Brew July 28 2026

Good morning.

Month-end is arriving with markets very much at the mercy of headlines, central banks and the AI trade. Yesterday’s session was mixed: blue chips held up reasonably well, helped by lower oil, while semiconductors and broader technology remained under pressure. The S&P 500 finished broadly flat at +0.02%, the Nasdaq slipped 0.18%, and the Dow gained 0.51%.

Key things to watch:

• The AI and semiconductor trade is under renewed pressure. The Philadelphia Semiconductor Index fell 2.2% for a third consecutive session, while ASML ADRs dropped 8.5% on reports that a Chinese state-backed firm has started mass-producing DUV chipmaking tools. Nvidia lost 5% as investors questioned the size and financing of AI infrastructure deals.
• South Korea is the epicentre of the Asian chip selloff. The KOSPI plunged sharply, triggering trading curbs, as SK Hynix and Samsung Electronics sold off heavily amid worries about Chinese competition, stretched valuations and AI financing risk.
• Central banks, Inflation data and earnings will decide whether this remains a sector correction or becomes broader market stress. The Fed decision, U.S. PCE data, the Bank of England, the Bank of Japan and Big Tech earnings from Microsoft, Meta, Amazon and Apple are all due this week.

In Europe, equities were more constructive. The DAX rose 1% to 25,361, its highest level since 7 July, led by SAP after well-received results. The FTSE 100 gained 0.4% to 10,782, with AstraZeneca and Vodafone among the main contributors, while the Stoxx 600 was little changed at 644.62.

Geopolitics remain in the background, but slightly less aggressively than last week. President Donald Trump said the United States was having “good talks” with Iran and that there was a chance of a deal, while warning that U.S. strikes would resume if negotiations failed. For markets, that keeps the Middle East in the headline-risk bucket rather than the full panic bucket for now.

On the macro side, U.S. durable goods orders rose 0.3% in June to USD 334.8 billion, rebounding from May’s 4% decline but missing the 1.6% forecast. Ex-transportation orders rose 0.6%, while core capital goods orders, a key business investment gauge, increased 0.9% after a revised 1.9% gain. AI-related and defence spending remain important supports, but the headline miss still matters ahead of the Fed.

In FX, the dollar initially weakened but recovered as markets positioned for a potentially hawkish Fed tomorrow. The USD Index is back around 101.50, EUR/USD is at 1.1365, USD/JPY at 163.75, and GBP/USD at 1.3290. The yen remains barely above a four-decade low, leaving intervention risk firmly on the radar, especially if the Bank of Japan leaves rates unchanged this week.

Gold and silver are weaker at 4,040 and 57.20, respectively, while Bitcoin is trading around 63,500.

Asia is the weak spot this morning. South Korean equities plunged as the global semiconductor selloff hit technology heavyweights. The pressure is coming from a familiar mix: fear of cheaper Chinese competition, doubts about the financing of the AI buildout, and stretched positioning after an exceptional run.

The KOSPI fell sharply enough to trigger “sidecar” trading curbs on both the main board and the junior Kosdaq index, temporarily suspending programme trading. SK Hynix was hit hard after its U.S.-listed shares fell below their initial offering price, while Samsung Electronics also dropped heavily.

The message is not that the AI story is dead. It is that investors are starting to ask tougher questions about price, financing, margins and competition. When a theme is this crowded, it does not take much to turn profit-taking into a broader reset.

On the company side, LVMH reported a modest rise in quarterly sales, helped by strong demand in the United States, which offset weaker spending in Europe and the Gulf. Second-quarter sales rose 3% on a currency-adjusted basis to EUR 19.5 billion, broadly in line with expectations.

Mercedes-Benz delivered the expected improvement in second-quarter operating profit versus last year’s weak comparison base, but the car business is not stabilising as hoped. Management now expects a slight decline in volumes rather than flat volumes for the year.

Today, Donald Trump is set to host Israeli Prime Minister Benjamin Netanyahu and Ukrainian President Volodymyr Zelenskiy, keeping geopolitics firmly on the agenda.

We are heading into a very important few days. Interest-rate decisions from the U.S., the UK and Japan are coming up, U.S. PCE is due on Thursday, and earnings from Microsoft, Meta, Amazon and Apple will be the main global focus. In Switzerland, UBS will also be closely watched.

The health of the AI trade is now being actively questioned. Cheaper competition from China, rising financing needs and higher rates are all getting more attention. For now, this still looks like a valuation and positioning reset rather than a collapse in the structural AI story, but the market is becoming less forgiving.

The outlook is therefore straightforward: if the Fed sounds hawkish, PCE stays sticky, or Big Tech guidance disappoints, pressure on semiconductors and high-duration growth can continue. If earnings confirm that AI demand is still strong and central banks avoid surprises, markets may stabilise quickly. Until then, position size matters.

Trade carefully.

Tuesday, July 28, 2026
Macro: U.S. Conference Board Consumer Confidence; Australian CPI figures.
Central banks / speakers: Reserve Bank of Australia Governor Michele Bullock speaks; FOMC meeting begins.
Corporate earnings: Boeing, Coca-Cola, UPS, PayPal, Visa, Mondelez, Texas Instruments, Danaher, Mercedes-Benz, Unilever, Air Liquide, Mondelez,

Wednesday, July 29, 2026
Macro: No major U.S. macro release before the Fed decision.
Central banks / speakers: FOMC rate decision at 20:00 CET, followed by the press conference at 20:30 CET.
Corporate earnings: Microsoft, Meta, Qualcomm, Lam Research, Starbucks, Procter & Gamble, General Dynamics, UBS. Deutsche Bank, BASF, Nordex, Porsche AG, Airbus, L’Oréal, Hermès, ENI,Telecom Italia, Rio Tinto, ACS, Telefonica, CaixaBank, Endesa, Reckitt Benckiser, Glencore,

Thursday, July 30, 2026
Macro: German GDP and CPI; euro-area GDP, unemployment and sentiment indicators; U.S. GDP and PCE data.
Central banks / speakers: Bank of England rate decision.
Corporate earnings: Apple, Amazon, Mastercard, Shell, Anheuser-Busch InBev, Sanofi, Cigna, Valero Energy. BMW, Adidas, Symrise, Heidelberg Materials, Drägerwerk, MTU, Aixtron, ZF, Kion, Gerresheimer, KnorrBremse, Anheuser Busch, Saint Gobain, Société Générale, Schneider Electric, Veolia, Sanofi, Air France-KLM, Renault, Ferrari, Enel, Prada, ING, BBVA, Stellantis, Rolls-Royce, BAE Systems

Friday, July 31, 2026
Macro: China PMI; euro-area CPI; U.S. University of Michigan Consumer Sentiment.
Central banks / speakers: Bank of Japan rate decision.