Market Quick Take - When good news isn't enough - 17 July 2026

Market drivers and catalysts

1. Equities: US and Asian equities fell as chip valuations cracked, while Europe held steady on earnings and takeover activity.
2. Volatility: Chip selloff deepened for a second day on AI-spending doubts, lifting VIX and Nasdaq vol, earnings ahead
3. Digital Assets: Crypto equities and miners fell with the tech rout while spot held steadier, Citadel backed Crypto.com
4. Commodities: Energy and grains lead as metals and softs retreat
5. Fixed Income: Front end drives small weekly gains across the US Treasury curve
6. Currencies: USD drifts lower for a third week led by CAD, AUD and GBP gains
7. Macro: US June Industrial Production & July University of Michigan Sentiment

Macro

1. US retail sales rose 0.2% in June, matching expectations but marking the weakest monthly gain in five months, while core sales remained relatively firm. Meanwhile, pending home sales fell 5.4%, the sharpest decline since December, as elevated mortgage rates and record home prices continued to weigh on affordability despite a resilient labour market.
2. The US–Iran conflict intensified as the US carried out a fifth consecutive day of strikes on Thursday, with an oil tanker hit near Iran’s main export terminal. Iran responded by attacking US bases in Kuwait, Jordan and Bahrain, with the Kuwaiti Armed Forces intercepting 32 Iranian drones targeting "vital" institutions. The exchange of attacks has raised concerns about supplies, with rising energy prices as observable commercial traffic through the Strait of Hormuz slumps.
3. UK manufacturing output unexpectedly rose 0.1% month-on-month in May, beating expectations for a 0.2% decline, as gains in machinery, electronics, electrical equipment and chemicals offset weakness in metals and rubber/plastics. Meanwhile, UK GDP grew 0.1% on the month, in line with expectations, as stronger services activity offset declines in production and construction. On an annual basis, manufacturing output increased 2.3%, the fastest pace since March 2024, while GDP rose 1.3%, marking its strongest annual growth since July 2025.
4. More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1230 – US June Housing Starts

1515 – US June Industrial Production

1400 – US July University of Michigan Sentiment

Earnings events

1. Friday: Travelers

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

Equities

1. USA: The S&P 500 fell 0.5%, the Nasdaq Composite 1.5% and the Dow 0.2% as investors cut exposure to richly valued artificial intelligence winners, even while most sectors held up better. The semiconductor index dropped 4.3%, SanDisk sank 12.6% and TSMC lost 2.3% despite record profit and a stronger growth and spending outlook, showing that expectations had become harder to impress. UnitedHealth gained 1.2% after beating estimates and raising guidance, while Netflix slid 9% after hours as its third-quarter forecast missed expectations and engagement growth stayed modest. Attention now turns to whether the chip unwind spreads into broader technology earnings.
2. Europe: The Stoxx 600 added 0.2%, while Germany's DAX fell 0.3% and the FTSE 100 rose 0.5%, as earnings and takeover activity offset renewed Middle East concerns. ASML gained 3.2% after its strong outlook continued to support the artificial intelligence investment story, but Infineon dropped 3.9% as the global chip sell-off reached Europe. ABB fell 5.9% after agreeing to buy Rotork for $5.5 billion, while Rotork surged 66.8% on the takeover premium. Delivery Hero was little changed after Uber agreed a nearly €13 billion acquisition, leaving regulatory approval as the next hurdle. Friday's weak futures suggest the semiconductor retreat may finally test Europe's recent resilience.
3. Asia: Japan's Nikkei 225 was down 5.2%, Taiwan's benchmark fell 5.7% and the Hang Seng lost 1.0%, while South Korea remained closed for Constitution Day. The sell-off centred on artificial intelligence and semiconductor shares after Wall Street's chip rout and fresh concerns over heavy industry spending. Tokyo Electron fell 9.3%, Advantest 10.5% and SoftBank Group 11.4%, while TSMC lost 3.9% in Taipei despite record earnings and a higher 2026 growth outlook. Investors now face a familiar question: strong demand, yes, but at what price?
4. More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 16.72 | VIX FUTURES: 18.89 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (145.72) | MARKET REGIME: LOW-VOLATILITY BULL | AS OF ~06:00 CET

1. A selloff in chipmakers deepened for a second day, as doubts over whether AI spending will justify valuations drove rotation out of technology; Nikkei fell 5.2% and Kospi 6.4%. The S&P 500 closed Thursday down 0.51% at 7,533.77, with US futures lower. VIX jumped 6.8% to 16.72 and VIX1D rose 34% to 12.72.
2. The term structure held in contango, VIX3M at 19.50, while Nasdaq vol VXN rose to 27.34 and SKEW stayed elevated at 145.72; MOVE was subdued at 68.16. Tesla and Alphabet earnings next week are the primary near-term catalyst, alongside escalating Middle East tensions lifting oil.
3. For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~63,528 -0.4% | ETHEREUM ~1,852 -0.6% | IBIT 36.39 -1.14% | ETHA 14.13 -2.69% | AS OF ~06:00 CET

1. Digital assets tracked the broader risk-off tone on Thursday, with crypto-linked equities and miners falling hardest while spot held comparatively steady. Miners led the declines, Cifr down 10.8%, Iren 9% and Cleanspark 8.7%, as Coinbase fell 4% and the ether ETF slid alongside the Nasdaq.
2. In structural news, Citadel Securities took a 2% stake in Crypto.com through a 400 million dollar investment valuing the exchange at 20 billion dollars, its first institutional funding round, earmarked for tokenized securities and derivatives.

Commodities

1. The Bloomberg Commodity Index is heading for a weekly gain of around 2%, lifting its monthly advance to 5.5%. The rally has been driven primarily by the energy sector, led by strong gains in diesel futures, and crude heading for its biggest weekly advance since April, while modest strength in agriculture - particularly wheat and soybean oil - has added further support. These gains have more than offset another difficult week for precious metals, with silver down 8%, as well as a wave of profit taking across the softs sector that sent cocoa and coffee sharply lower after their recent strong advances.
2. Meanwhile, European natural gas prices have surged 15% on the week and 29% over the month as renewed disruptions to Gulf energy supplies, together with robust summer power demand, have slowed the rebuilding of storage inventories ahead of the winter heating season.
3. Crude oil extended its rally, with Brent climbing back above USD 85 a barrel as energy and refined fuel flows through the Strait of Hormuz continues to slow amid the escalating conflict between the US and Iran. The renewed disruption has interrupted the recent recovery in regional supply, reviving concerns about tighter global markets. The impact has been most acute in refined products, with diesel and gasoline prices surging, pushing US refining margins to record highs and increasing the risk of higher fuel costs for consumers.
4. Gold slipped back below USD 4,000 as inflation concerns driving US rate hike speculation continuing to weigh on investor sentiment. Rising energy prices linked to the Middle East conflict have reinforced inflation risks, while an increasing number of Federal Reserve officials have warned that persistent price pressures could require further policy tightening. For now, bullion remains locked in a broad USD 3,950–4,100 consolidation range, with prices once again testing support near the lower end.
5. More in our Commodity News, Analysis & Commentary

Fixed Income

1. A relatively calm week in the US Treasury market saw a modest bull steepening, with the two-year yield falling 7 basis points to 4.13%, while the 10-year eased just 2 basis points to 4.55%. Further out the curve, the 30-year yield rose 2.5 basis points to 5.08%. Softer-than-expected CPI and PPI data supported the front end, while lingering energy-related inflation concerns and the risk of Japanese investors repatriating capital continued to weigh on longer-dated bonds.
2. Following two consecutive benign inflation reports, SOFR options activity has been dominated by put selling as traders unwind positions that had anticipated at least one Fed rate hike this year. Markets now price at most one additional hike by mid-2027, marking a significant repricing from earlier in the quarter. Meanwhile, Treasury bill auctions continued to attract strong demand, with eight-week bills favoured for a second consecutive week.

Currencies

1. A mixed but generally weaker week for the dollar saw the Bloomberg Dollar Index slip 0.2%, a third albeit small consecutive weekly fall, with losses against most major peers following softer US inflation data that further reduced expectations of additional Fed tightening. The main exception was the Japanese yen, which weakened 0.5%, leaving USDJPY confined to a narrow 162.00–162.80 range. Heavy options positioning around the 162 strike helped anchor price action, while the yen's continued weakness kept markets alert for the risk of intervention from Tokyo.
2. Elsewhere, the Canadian, Australian and British pounds led gains against the dollar. Sterling was the standout performer, climbing to a one-year high versus the euro as investors welcomed the prospect of a market-friendly UK Chancellor, triggering an aggressive bout of short covering after months of underperformance.
3. More on currencies in our dedicated section: Forex Trading News & Analysis