Morning Wrap: AI Stocks Sell-off (07.07.2026)
On July 7, 2026, the Nasdaq 100 futures experienced a decline of over 1% following a sell-off in AI stocks. This downturn was primarily triggered by Samsung's preliminary Q2 results, which, despite reporting record operating profits of $58.4 billion and revenues of $112 billion, failed to meet the high expectations set by investors. Consequently, Samsung's shares plummeted nearly 10%.
The negative sentiment surrounding Samsung led to a broader sell-off in the Korean KOSPI index, which saw a significant drop of 6%, prompting a 20-minute trading halt. Other Asian stock indices also reflected this trend, with the Shanghai SE Composite down 1.6%, the Hang Seng by less than 0.5%, and the Nikkei by 2.2%. Notably, Kioxia, a major player in the NAND flash memory and SSD market, saw its shares decline by 11%.
Geopolitical Context
In geopolitical news, President Trump's comments regarding Iran did not significantly impact the markets. He emphasized the necessity for Iran to sign a deal, warning that the USA would take further action if not. However, energy commodity prices remained stable in response.
Commodities Overview
Crude oil prices showed signs of stabilization, with Brent crude trading at approximately $73 (up 0.9%) and WTI at around $69. In the natural gas market, TTF gas prices increased to just over $46 per MWh (up 4.9%), while natural gas prices slightly decreased to $3.23 (-0.6%). Precious metals experienced a downturn, attributed to rising Treasury bond yields, with gold priced at approximately $4125 per troy ounce (-1%) and silver at just over $60 (-2.4%).
Macroeconomic Data
Recent economic data from Germany indicated a positive trend, with factory orders rising by 6.2% and industrial production for May increasing by 0.9% month-on-month. This growth is anticipated to be bolstered by a substantial fiscal stimulus of 500 billion euros announced by Chancellor Friedrich Merz, aimed at enhancing infrastructure, healthcare, energy, and digital modernization.
In the Eurozone, the Producer Price Index (PPI) inflation rose to 5.9%, aligning with expectations, while retail sales showed a modest increase of 1.6% year-on-year. In the United States, the PMI indices for June were revised downward, with the composite index settling at 51.9, indicating a slowdown in economic growth compared to the previous quarter's robust 2.7% growth.
Currency Movements
The Norwegian krone gained 0.5% this week, buoyed by a modest rise in Brent crude oil prices and a larger increase in LNG prices on the Dutch TTF exchange. Conversely, traditional safe-haven currencies like the Japanese yen and Swiss franc both saw declines of 0.3%.
Cryptocurrency Market
In the cryptocurrency market, Bitcoin and Ethereum continued their downward trajectory, with declines of 1.2% and 1.4%, respectively.
Conclusion
The market's reaction to earnings reports and geopolitical developments highlights the ongoing volatility in the financial landscape, particularly in sectors heavily influenced by technological advancements and global events.