Market Quick Take - Wall Street Nears a Record as Asia's Chip Jitters Linger

Date: 4 August 2026

Market Overview

The article discusses the current state of global markets, highlighting a cautious week influenced by various macroeconomic factors. Key drivers include the resumption of talks regarding Iran, strong US manufacturing data, and upcoming payroll reports.

Macro Drivers

• Iran Talks: Progress in negotiations to restore shipping through the Strait of Hormuz, with US President Trump indicating a potential reopening.
• US Manufacturing Data: The ISM Manufacturing PMI rose to 55.6 in July, indicating strong expansion, while construction spending fell slightly.
• European Economic Indicators: Germany's retail sales saw a significant drop, and Swiss CPI cooled, indicating mixed economic signals in Europe.

Equities Performance

US and European equities experienced a rally, driven by lower oil prices and strong AI earnings. The S&P 500 closed at 7,600.50, just shy of its record high, while the Nasdaq 100 gained 1.8%. Major tech stocks like Microsoft, Meta, and Alphabet saw significant gains, although Apple lagged slightly.

In Europe, the Stoxx 600 index rose 0.5%, with the DAX and CAC 40 reaching new intraday records. UK homebuilders also saw gains as market expectations for rate hikes diminished.

Conversely, Asian markets showed mixed results, with the MSCI Asia Pacific index down 0.7% due to ongoing volatility in South Korean chip stocks.

Volatility and Market Sentiment

The VIX index eased to 15.86, reflecting reduced near-term risk perception, although concerns over South Korean chip volatility persisted. The market is currently in a transitioning regime with mixed signals.

Digital Assets

Digital assets continued their rally, with Bitcoin and Ethereum showing slight gains. Hashdex announced the liquidation of its US spot bitcoin ETF after failing to attract sufficient assets.

Commodities Update

Oil prices rebounded from a steep drop, with Brent crude trading above $85 per barrel. Gold remained rangebound, while copper surged to multi-week highs.

Fixed Income and Currencies

US Treasury yields saw a slight rebound, while Japan's government bond yields reached new cycle highs. The USD/JPY pair rebounded slightly, reflecting intervention-driven fluctuations in the yen.

Conclusion

The article encapsulates a week of cautious optimism in the markets, driven by strong economic data and geopolitical developments, while also highlighting the ongoing volatility in specific sectors, particularly in Asia.