Weekly Market Movers — Key Highlights
  • U.S.-Iran tensions and Strait of Hormuz disruptions impacted energy markets.
  • FOMC minutes revealed divided views on interest rates.
  • PepsiCo earnings highlighted weak consumer demand in North America.
  • Strong U.S. labor market data reinforced economic resilience.

Global equity markets advanced during the week as strong semiconductor demand, AI-related investments, and resilient economic data outweighed heightened geopolitical tensions in the Middle East. Markets initially entered a risk-off mode following the renewal of U.S.-Iran tensions. However, U.S. equities recovered from early volatility, led by technology and semiconductor stocks, while investors digested hawkish Federal Reserve minutes and stronger-than-expected labor market indicators. Rising Treasury yields and ongoing supply-chain concerns kept markets cautious, but optimism around AI-driven growth and corporate investment supported risk sentiment. 

In global geopolitics, the U.S. Treasury’s sudden cancellation of the 60-day sanctions relief waiver erased expectations that additional Iranian crude exports would hit global markets, leading to higher oil prices. The U.S. launched strikes on Iran and attacks by Iran on commercial shipping vessels in the region. However, diplomatic mediation by Qatar alleviated total war anxieties, leading to a dip in oil prices by the end of the week. Meanwhile, President Putin reportedly remains resistant to peace negotiations with Ukraine, with recent Ukrainian drone strikes on Russian energy and port infrastructure increasing the likelihood of further escalation in the conflict.

Global Updates
  • Global Equities (as measured by the MSCI All Country World Index) rose this week on AI-related semiconductor strength, heightened M&A activity, and growing expectations of policy easing.
  • German inflation eased ‌to 2.4% in June as per the federal statistics office. 
  • South Korean technology company SK Hynix launched a US$28 billion Nasdaq ADR offering, one of the largest equity raisings globally, reinforcing AI‑semiconductor leadership themes and influencing Asian technology valuations.
  • Apollo launched a £5.7 billion bid for easyJet, topping Castlelake’s offer and prompting the airline to back Apollo’s higher proposal.
  • Nanya Technology announced plans to spend more than US$6.2 billion in 2027, nearly four times this year’s capex, to expand memory-chip production and meet rising AI-driven demand.
  • Volkswagen’s Q2 global deliveries fell 8.6%, as a 36.6% decline in China outweighed growth in North America (+7.7%) and Western Europe (+1.8%).
  • Tata Consultancy Services reported a 5% YoY increase in consolidated net profit in the Q1, while earnings rose to INR13,349 crore. 
  • NATO leaders met in Ankara with expectations for substantial defense‑related procurement announcements, benefiting European defense equities.
  • Iran launched attacks on U.S. military sites in Gulf states after U.S. strikes, while explosions were reported across southern Iran.
  • President Vladimir Putin reportedly rejected peace talks with Kyiv, with Ukrainian drone strikes prompting a likely escalation of the conflict for now.
  • A fire at a shoe factory in southeastern China killed at least 28 people, after flames engulfed the multi-storey building and trapped workers on the rooftop.
  • Iran’s slain Supreme Leader Ali Khamenei was buried in Mashhad after nationwide funeral ceremonies, following his death in the opening U.S.-Israeli strikes and a brief truce last month.
U.S. Equity
  • U.S. equity markets navigated extreme geopolitical volatility to finish the week higher. Investors successfully shook off early-week anxiety stemming from renewed U.S.-Iran military tensions, a temporary spike in crude oil, and an initial pullback in the artificial intelligence driven stocks. The tech-heavy Nasdaq Composite led the market’s late-week recovery driven by a late-week semiconductor rally and stabilizing energy prices. The rally in AI stocks was sparked by the heavy demand for SK Hynix’s highly oversubscribed U.S. listing. The risk on tone was further supported by initial jobless claims data reinforcing labor market resilience.
  • SK Hynix raised $26.5 billion from its heavily oversubscribed U.S. ADR listing, priced at $149, highlighting the strong investor demand for semiconductor-related assets.
  • U.S. weekly jobless claims declined to 215,000, underscoring continued labor market strength and low levels of layoffs. The resilient employment picture also tempered expectations for substantial Federal Reserve policy easing in the coming months.
  • Major maritime shipping companies have suspended or reduced transit through the Strait of Hormuz amid heightened geopolitical tensions, increasing the concerns over supply-chain reliability. The surge in war-risk insurance costs has raised transportation expenses for crude oil and refined products.
  • PepsiCo reported second-quarter revenue of $24.18 billion, exceeding expectations, and a lower-than-expected adjusted EPS of $2.20. The continued weakness in its North American food and beverage businesses highlighted ongoing consumer spending pressures in the U.S. market and weighed on investor sentiment. 
  • Micron Technology announced plans to invest more than $250 billion in the United States through 2035, to support AI-driven demand for advanced memory and semiconductor products.
  • The release of the June FOMC meeting minutes this week, provided investors insight on the policymakers’ views on inflation, economic growth, and the future path of interest rates. The minutes highlighted the split in opinions of the Fed board on whether rates could move higher or lower and the hawkish stance of a few members.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined over the week. 
  • The U.S. 10-year Treasury yield rose sharply to 4.539% and the yield on the 2-year note rose to 4.162% over the week, following renewed conflict in the Middle East and the FOMC meeting minutes which highlighted the hawkish stance of members of the Fed board.
  • The U.S. Dollar Index rose slightly to 100.9 over the week.