Notable market news this past week (5-Jul-26)
Here is the Skeptivest roundup of the latest market headlines for the week
🌍 Global equities, bonds and gold rally as Fed Chair Warsh shifts narrative amid cooling jobs report
Global equity markets posted their strongest weekly performance in two months, driven by softer-than-expected US labour market data and fading concerns of interest rate hikes. In the US, the Dow Jones Industrial Average reached fresh record highs to close at 52,900.07, while the S&P 500 rebounded from a mid-week sell-off to close near 7,483. Treasury bonds also rallied strongly, pulling the 10-year yield below recent highs as expectations for further policy tightening eased. The decline in real yields supported non-yielding assets, with gold rising 2.2% over the week to approach US$4,200 per ounce.
The rallies were catalysed by a significantly weaker-than-expected US jobs report. June non-farm payrolls increased by just 57,000, roughly half of market expectations and sharply below May's 172,000 gain, while wage growth remained contained. The softer labour market reinforced expectations that the Fed has greater scope to ease monetary policy later this year, strengthening the soft-landing narrative and supporting both equities and bonds.
Over the week, newly appointed Fed Chair Kevin Warsh also noted that inflation expectations and structural price pressures have eased over the past month. Combined with the weaker employment data, markets rapidly repriced the policy outlook, with interest rate swaps cutting the implied probability of a July 28–29 Fed rate hike to below 20%, from more than one-third earlier in the week.
☕️ Quick fire happenings to note
🌏 Global macro
- OPEC+ approved another output increase for August, marking its fifth consecutive monthly supply hike, as shipping through the Strait of Hormuz continues to normalise. Tanker shipments out of the Strait of Hormuz by major producers like Saudi Arabia and the UAE rebounded to near pre-conflict baselines, significantly easing global energy bottleneck fears. The additional supply, together with easing Middle East tensions, pushed crude prices below US$70 per barrel as geopolitical risk premiums unwound, supporting expectations of a better-balanced oil market and easing inflation concerns.
- China’s June Caixin PMI pointed to a resilient, albeit uneven, economic recovery. The Caixin Manufacturing PMI edged down marginally to 51.7 from 51.8 in May, remaining comfortably in expansionary territory and slightly exceeding market expectations of 51.6, indicating continued strength in manufacturing activity. Meanwhile, the Caixin Services PMI also remained in expansion, but moderated as domestic demand softened. Encouragingly, new export orders grew at their fastest pace in 20 months, suggesting improving external demand is helping to offset weaker domestic momentum.
🏦 Individual stocks/companies
- Oracle Corp (-6.65% past 5D) extended its decline as investors grew increasingly concerned over the company's aggressive AI infrastructure spending plans. Management guided for US$90-95 billion in FY2027 capital expenditure and intends to raise US$40 billion through debt and equity financing. While Oracle continues to benefit from robust AI-driven demand, evidenced by a record US$638 billion remaining performance obligation (RPO) and 47% cloud revenue growth, markets remain focused on the near-term impact of higher capital expenditure on margins, free cash flow, and leverage. The sell-off highlights investors' growing scrutiny of AI-related investment, with greater emphasis on the pace at which these large-scale investments can translate into sustainable earnings growth.
- AeroVironment Inc (+39.66% past 5D) shares surged 19% in a single session after delivering a blowout fiscal fourth-quarter earnings report. Revenue jumped 133% y/y to a record US$641.6 million, significantly exceeding market expectations, driven by robust demand for its defence and autonomous systems. Investor sentiment was further boosted by a 65% increase in funded backlog to a record US$1.2 billion, highlighting strong visibility into future revenue despite management issuing relatively conservative forward guidance. The stock extended its rally after securing a US$500million contract from the US Army, reinforcing confidence in the company's long-term growth prospects amid sustained increases in global defence spending.
- SK Hynix Inc (-8.00% past 5D) shares saw a highly volatile week amid a broader correction in AI and semiconductor stocks across Asia, with the stock plunging 14.6%in a single session on Thursday as foreign investors took profits. Shares came under pressure as investors rotated out of richly valued AI hardware names on concerns that AI infrastructure spending may be normalising after an extended rally. However, the stock rebounded 10.9% on Friday following weaker-than-expected US labour data that reinforced expectations for Fed policy easing. Sentiment was further supported by the company's US$29.4 billion capital raising and upcoming Nasdaq ADR listing, reinforcing confidence in its long-term HBM growth prospects.
🇸🇬 Singapore related
- Higher electricity and town gas tariffs took effect in Singapore on 1 July, raising operating costs for businesses. The increase reflects the lagged impact of the Middle East energy shock, as quarterly utility tariffs had already locked in peak fuel costs before global oil prices retreated. As a result, businesses are expected to continue facing elevated energy expenses despite the recent easing in crude prices.
