Last week there was a bit of a summer lull in between key economic data and ahead of the on-ramp to the Q2 Earnings Expressway starting tomorrow. However, geopolitics and AI-related headlines filled the void of scheduled catalysts driving some choppy trade. The S&P 500 traded in a reasonably tight range consolidating just over its 50d moving average ending the week modestly higher and within less than 1% from another ATH. Technology provided most of the gains with the NYSE 100 index closing the week up ~2.5%. However, most other major US indices ended the week with slight losses. Oil prices and yields ended moved higher as the ceasefire fell apart.

Futures are trading modestly lower amidst a weekend where the US and Iran continued to exchange fire and some conflicting headlines around the Strait. Oil prices are higher once again with ICE Brent retesting $80. Treasury yields also retested recent highs but are only up ~2bps. From a market perspective, the bigger story overnight was weakness in tech stocks in Asia, particularly memory companies in South Korea, though there wasn’t a clear headline catalyst. The Kospi falling 9% triggering its 7th market wide circuit breaker this year as SK Hynix fell ~15%, a day after its US ADR debut, while Samsung was also down ~10%. Tech stocks are under pressure in the pre-market - SMH down ~2% while DRAM is lower by ~9%. Taiwan Semi is bucking the weakness after providing a sales update, ahead of earnings on Thursday, highlighting strong AI demand with Q2 revenue up ~36% and June up nearly 70%.