Morning Wrap: Asia Dips on US Semiconductor Sell-off

Date: 16 July 2026

Market Overview

US index futures opened slightly higher, maintaining proximity to the previous day's close after a volatile session, particularly in the semiconductor sector. Futures for the Nasdaq, S&P 500, DJIA, and Russell 2000 are all up by approximately 0.15%, reflecting similar movements in European Stoxx 50 futures.

Key Highlights

• SpaceX Stock: SpaceX shares hit an all-time low of $132.75, falling below their IPO price of $135. Investor focus is now on the upcoming 13th Starship test flight, which is seen as a critical catalyst.
• Asian Markets: Most Asian stock markets experienced declines due to a significant correction in the semiconductor sector and rising geopolitical tensions between the US and Iran. The Nikkei 225 fell by 2.7%, while South Korea’s KOSPI dropped over 6%. In contrast, Hong Kong's Hang Seng index rose by 1.7%.
• TSMC Earnings Report: Investors are keenly awaiting TSMC's quarterly earnings report, which is expected to provide insights into the sustainability of global AI demand.

Economic and Geopolitical Developments

• Bank of Korea Rate Hike: The Bank of Korea raised interest rates by 25 basis points to 2.75% to combat persistent inflation, which stands at 3.2%.
• Japan's Currency Warnings: Finance Minister Satsuki Katayama reiterated that the government is prepared to intervene in currency markets as the yen remains under pressure, hovering around 162 per dollar.
• US-Iran Tensions: President Trump is considering expanding military operations against Iran, including intensified airstrikes and potential ground forces deployment.
• Interest Rate Outlook: Trump expressed a preference for pausing interest rate hikes, anticipating a decrease in inflation by year-end.

Foreign Exchange Market

The dollar index is showing marginal gains of +0.05%, with major currency pairs experiencing low volatility. Notable exceptions include the antipodean currencies, with NZD/USD up by 0.15% and AUD/USD down by 0.1%. The Swiss franc is losing ground against the G10 currencies.

Energy and Precious Metals

Energy commodities are under selling pressure, with Brent crude futures down 1.2% to $84.50 per barrel and WTI crude futures down 1.65% to $79.90 per barrel. Precious metals are also declining, with gold down 0.7% to $4,030/oz and silver down 0.8% to $57.30/oz.

Additional Market Updates

• Wheat Futures: Wheat futures have reached a two-year high amid concerns over Russian exports.
• Cocoa Prices: Cocoa prices are rising due to rebounding demand in Asia, while Europe shows signs of retreat.
• UK Economic Growth: Positive growth in the first half keeps the British pound buoyant.
• Nasdaq Futures: Despite a positive earnings report from TSMC, Nasdaq futures dipped by 0.6%, raising questions about AI market sustainability.