Market Quick Take - Chips Roar Back as Nasdaq Snaps Its Skid

Date: July 31, 2026

Market Drivers and Catalysts

• Macro: Trump's Gaza deal and a suspected BOJ intervention frame a busy end to the week.
• Equities: Global equities rebounded sharply as blockbuster technology earnings reignited the artificial intelligence trade, with Asia extending the rally.
• Volatility: Volatility unwound sharply as chip-led risk appetite returned; BOJ decision the next test.
• Digital Assets: Miners rallied hard on the broader recovery while spot majors traded little changed overnight.
• Commodities: Crude oil prices consolidated lower ahead of the weekend, gold remained rangebound.
• Fixed Income: US treasury yields dropped slightly all along the curve.
• Currencies: The dollar consolidated some of Thursday’s steep losses as the yen gave back intervention-driven gains.

Macro Overview

Former President Trump announced a significant deal for the full disarmament of Hamas and other armed groups in Gaza, proposing a new Palestinian government, which could mark a breakthrough after years of conflict.

In Japan, the Bank of Japan (BOJ) held its policy rate at 1.00%, with one dissenter advocating for a hike to 1.25%. The BOJ's new policy statement reflected a more confident tone regarding the Japanese economy, acknowledging inflation risks and committing to raising borrowing costs.

Japan's retail sales showed a modest increase of 0.5% year-on-year in June, a significant drop from May's 5.0%. Meanwhile, US personal spending rose by 0.4% month-on-month in June, with initial jobless claims remaining below forecasts.

Equities Performance

The S&P 500 surged 1.7% to 7,437.63, and the Nasdaq 100 jumped 3.4%, breaking a six-day losing streak. Microsoft led the charge with a remarkable 16% increase, adding approximately $450 billion in market cap after reporting a 43% year-on-year growth in Azure. The semiconductor sector also saw significant gains, with the Philadelphia Semiconductor Index rising over 9%.

In Europe, the Stoxx 600 increased by 0.8%, driven by strong earnings from miners and banks. In Asia, chip stocks rebounded sharply, with the Kospi index rising approximately 14%.

Volatility Insights

The VIX index fell to 17.09, reflecting a decrease in market volatility as the chip-led rebound and strong earnings from major tech companies restored investor confidence.

Digital Assets

Digital asset miners experienced significant gains, with notable increases in stocks like Iren and Cifr. Bitcoin and Ethereum saw slight declines despite the overall positive sentiment in equities.

Commodities Update

Brent crude oil prices fell towards $85 per barrel, while gold prices remained stable within a range established over the past six weeks. Copper prices held firm above $6.5 per pound following a strong advance.

Fixed Income Trends

US treasury yields eased slightly across the curve, with the benchmark 10-year yield trading near 4.65%. Concerns over inflation control under the new Fed chair have led to bearish positioning in Treasuries.

Currencies Overview

The US dollar stabilized after significant losses, while the yen showed volatility due to suspected intervention by the BOJ. The euro strengthened against the dollar, supported by positive Eurozone GDP data.

Conclusion

The market is experiencing a dynamic shift with strong earnings in the tech sector driving equity gains, while macroeconomic factors and geopolitical developments continue to influence investor sentiment.