Market Quick Take - Chip rout goes global as AI doubts deepen, Fed in focus - 28 July 2026

Market drivers and catalysts

1. Macro: AI spending doubts drove a global chip selloff while the Iran de-escalation kept pulling oil lower
2. Equities: US and Europe held up as lower oil helped, while Asia’s semiconductor sell-off deepened sharply
3. Volatility: Index vol stayed calm while tech vol did the work; oil vol deflated sharply
4. Digital Assets: Ether-linked equities led Monday's rally before spot slipped with the tech risk-off
5. Commodities: Crude oil stabilizes, gold under pressure as USD rebounds ahead of FOMC tomorrow.
6. Fixed Income: US treasuries steady on crude oil retreat, awaiting FOMC
7. Currencies: US dollar rebounds, awaiting FOMC, Swiss franc weak

Macro

1. The chip selloff went global overnight. Mounting doubts over returns on AI capital spending sent semiconductors lower for a third session, with MSCI's Asia Pacific gauge dropping as much as 3.6% to its lowest since May. Nvidia's fresh round of deals worth more than 750 billion dollars has raised questions over circular funding, and a report that a Chinese state-backed firm has begun mass-producing immersion DUV lithography machines added a competitive threat.
2. The US paused strikes against Iran for a third night. President Trump said the two sides are in talks and there is a "good chance" of a deal, while warning fighting would resume without one. Iranian and Omani negotiators are separately seeking to restore shipping through the Strait of Hormuz.
3. Data were mixed. US durable goods orders rose 0.3% in June to 334.8 billion dollars, below the 1.6% forecast, though core capital goods climbed 0.9% on AI-related and defence spending. The Dallas Fed manufacturing index edged up to 1.3 from 0. UK shop price inflation slowed to 0.9% year-on-year, the weakest since December 2025.
4. More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1. 1400 – US July Consumer Confidence
2. Wednesday 29 July: FOMC decision, followed by Chair Warsh's press conference
3. Thursday 30 July: Bank of England decision, US Q2 GDP and the PCE deflator
4. Friday 31 July: Bank of Japan decision

Earnings events

1. Tuesday: Visa, Coca-Cola, KLA, Seagate, Boeing, S&P Global, PayPal, Corning, Bloom Energy
2. Wednesday: Microsoft, Meta Platforms, Lam Research, Procter & Gamble, ARM Holdings, Qualcomm, Starbucks, SK Hynix, Hermes, L'Oreal, Rio Tint
3. Thursday: Apple, Amazon, Mastercard, Coinbase, Prada
4. Friday: ExxonMobil, Chevron, AbbVie, Moderna, Kioxia

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

1. USA: The S&P 500 finished flat, the Dow gained 0.5% and the Nasdaq Composite fell 0.2% as lower oil prices supported broader shares but semiconductor weakness capped the market. Nvidia dropped 5.0% on concerns over large financing guarantees linked to artificial intelligence infrastructure. After hours, Cadence Design rose more than 3% after beating estimates and raising guidance. Investors now turn to the Federal Reserve and major technology earnings.
2. Europe: The DAX rose 1.0% and the FTSE 100 gained 0.4%, while the Stoxx Europe 600 finished broadly flat as technology losses offset strength elsewhere. SAP jumped 7.9% as investors welcomed resilient cloud growth and contracted revenue, while Vodafone gained 4.8% after lifting its outlook following the Safaricom transaction. AstraZeneca advanced 1.7% after quarterly profit beat expectations and management maintained its annual targets. ASML fell 8.4% on reports of Chinese progress in deep ultraviolet lithography, although lower oil prices supported airlines and other energy-sensitive sectors ahead of the Federal Reserve decision.
3. Asia: Asian equities fell sharply on Tuesday as the semiconductor sell-off spread across the region. By late trade, South Korea’s Kospi had dropped 10.5%, triggering a temporary market halt, while Japan’s Nikkei fell 4.3%; the Shanghai Composite lost 1.4% and Hong Kong’s Hang Seng slipped 0.1%. Samsung Electronics and SK Hynix sank 12.0% and 13.0%, respectively, as investors reassessed artificial intelligence spending, memory-chip valuations and rising Chinese competition. Kioxia plunged 18.3% and Tokyo Electron lost 9.8% in Japan, leaving technology earnings and policy signals firmly in focus.
4. More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 18.67 | VIX FUTURES: 19.25 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (146.60) | MARKET REGIME: NEUTRAL / CHOP | AS OF ~06:00 CET

1. A third day of chip selling barely registered at Monday's US close: VIX ended at 18.67, up just 0.5%, while VIX1D collapsed 15.2% to 13.09. In our view the stress appears concentrated in tech, with VXN at 28.65, 1.53 times the VIX. Overnight the front VIX future rose to 19.25 as the Asian rout deepened.
2. The cash curve stayed in contango, VIX9D 18.13 against VIX3M 20.20, SKEW elevated at 146.60, MOVE 77.21. Oil vol OVX fell 10.9% to 60.62 as the risk premium deflated. Option-implied SPX moves: 47 points (0.63%) today and 116 (1.57%) into Friday, with Wednesday's Fed ahead.
3. For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~63,270 -3.0% | ETHEREUM ~1,880 -3.3% | IBIT 36.77 +1.16% | ETHA 14.71 +4.77% | AS OF ~06:00 CET

1. Crypto equities had a strong Monday before spot turned lower overnight with the chip-led risk-off. Ether proxies led: BitMine rose 13.5%, Circle 5.3% and Block 5.3%, while Coinbase gained 5.8% and Strategy 7.6%. Miners went the other way, Cipher down 6.5% and CleanSpark 3.4%.
2. On the structural side, attention turned to the Clarity Act: the Senate's updated market-structure text adds an ethics provision on official conflicts of interest, with a procedural motion to proceed expected this week and a floor vote pencilled in for early August.

Commodities

1. Brent crude stabilized after a sharp drop Monday, with the most liquid October contract trading near 85.50 early Tuesday, while the September contract expiring this Friday trades closer to USD 88.0 per barrel. September WTI trades near 82.20 early Tuesday, down less than fifty cents from the Monday close after dipping as low as 80.60 earlier in the session.
2. Gold came under pressure again early Tuesday, trading below 4,050 and near the middle of the range since late June, possibly set to come under further pressure if the FOMC meeting Wednesday surprises to the hawkish side and then testing the key 4,000 level or test higher on a more dovish FOMC outcome.
3. More in our Commodity News, Analysis & Commentary

Fixed Income

1. US Treasuries edged higher amidst wobbly equity market performance in Asia as high momentum tech stocks came under pressure. The benchmark two-year treasury yield edged back two basis points lower from Monday’s close to 4.30% as the market is unsure of the FOMC meeting decision on Wednesday, with 33% odds of a rate hike priced into forward expectations. The benchmark 10-year treasury yield also dropped back below 4.63%, trading near its lowest level in a week.
2. US High Yield credit spreads have widened in recent days, with the Bloomberg measure of the high yield bond spread to US treasury yields widening another basis point Monday to 281 basis points after widening 14 basis points last week. The spread is a single basis point below its widest since early April.

Currencies

1. The US dollar rallied late Monday after a modest weakening triggered by sharply lower crude oil prices amidst hope for further calm after the latest exchange of US-Iran hostilities. EURUSD pushed as low as 1.1362 early Tuesday, matching its lowest level from earlier this month as traders eye the 1.1329 range low from late June, the lowest level since early 2025. USDJPY rebounded from a 163.33 low Monday to trade near 163.75 early Tuesday.
2. The Swiss franc is eyeing its lowest levels versus the euro this year and dropped to a new one-year low versus the US dollar as Bloomberg reported that the Swiss National Bank will keep rates at zero through the end of 2027 according to unnamed sources. EURCHF trades above 0.9310 early Tuesday, while USDCHF eyes 0.8200.
3. More on currencies in our dedicated section: Forex Trading News & Analysis