1. Global AI Chip Rout Reverberates from Seoul to Wall Street

A sharp selloff in semiconductor stocks rippled across Asia and into US markets in the final week of June. Asian markets sold off sharply on Tuesday, led by South Korea's Kospi — its largest single-day drop in recent memory — as a selloff in SK Hynix and Samsung Electronics triggered a global AI chip rout. The contagion spread quickly: the Hang Seng Index fell 1.8% to 23,336, while the Hang Seng China Enterprises Index dropped 2%, entering bear market territory at 20% below its October peak. In Japan, SoftBank Group plunged more than 12%. On Wall Street, the Nasdaq Composite posted its fifth consecutive losing session as investors rotated out of key technology stocks; the index dropped 0.24%, while the S&P 500 ticked down 0.05%. The S&P 500 slid nearly 2% on the week, while the Nasdaq fell 4.6% in the period. A key catalyst: chip stocks weakened after a report that OpenAI is considering delaying its IPO, raising concerns about "sustainability of their infrastructure spending given the delay in funding from the capital markets," according to JPMorgan traders.

Sources: Saxo Hong Kong, Asia Market Quick Take, 24 June 2026; CNBC, 25 June 2026

2. Fed Holds Rates, But Hawkish Dot-Plot Signals Possible Hike

The Fed kept the federal funds rate unchanged at 3.50%–3.75% for a fourth consecutive meeting in June 2026 — the first meeting under new Chair Kevin Warsh. The rate decision itself was expected; the shift in forward guidance was not. Nine of 19 officials now expect at least one rate hike by year-end, a notable shift from March, when none projected an increase. New Chairman Warsh emphasised that the Fed would prioritise price stability, making no reference to its dual mandate of supporting the labour market. Elevated energy costs lie at the root: core PCE inflation rose from 3.0% in December 2025 to 3.3% in April 2026, giving policymakers less confidence that inflation is moving steadily toward target. Markets have repriced accordingly — the market is currently pricing in one 25 basis-point hike by October 2026 with no further movement through 2027.

Sources: Trading Economics, 17 June 2026; ProfitGuard Credit Outlook, June 2026; Advisor Perspectives, 18 June 2026

3. ECB Raises Rates 25 bps as Middle East Conflict Stokes Inflation

The ECB Governing Council raised its three key interest rates by 25 basis points, lifting the deposit facility rate to 2.25%, effective 17 June 2026. The war in the Middle East is generating inflation pressures, and the decision to raise rates is described as robust across a range of scenarios. In the ECB's baseline projections, headline inflation is expected to average 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028. The move marks a reversal of the easing cycle that ran through much of 2025, and stands in contrast to the Fed's hold — though both central banks cited energy-driven inflation as the dominant near-term concern.

Source: European Central Bank, Monetary Policy Decision Press Release, 11 June 2026

4. Private Credit LBO Volumes Hit Multi-Year Low in Q2

Direct lending activity has contracted sharply. Behemoth buyouts are proving elusive this year, with direct lending LBO volume posting multi-year lows; no LBO financing over $2 billion has been tracked by LCD since early March. Direct lenders financed just 36 LBOs so far in Q2 with an estimated combined volume of $7.9 billion, marking a nearly six-year low for LBO financing activity. The broader PE deal environment mirrors the weakness: US PE deal value totalled just $117 billion in Q2 through 23 June, less than half of Q1 levels and the lowest quarterly reading since the onset of Covid-19 in early 2020. Redemption pressures add to the stress: investors have already requested more than $10 billion worth of redemptions from private credit funds in the first quarter of the year, according to Financial Times calculations, with that figure expected to rise.

Source: Yahoo Finance / LCD, 25 June 2026; ACG Insights (Middle Market Growth), 2026

5. AI Semiconductor Infrastructure: Record Capex Outlook, but Cost Concerns Mount

Despite the near-term market turbulence, the structural spend trajectory for AI infrastructure remains significant. A SIA-Deloitte study estimates that government and industry will invest over $4 trillion in new data centre infrastructure through 2028, of which up to $2.8 trillion will be spent on semiconductors. Global semiconductor annual sales are projected to reach US$975 billion in 2026, a historic peak, with growth accelerating to 26%. On the packaging side, Taiwan OSAT leader ASE's first fully automated high-volume production line for fan-out panel-level packaging (FOPLP) is expected to enter mass production by end-2026, with customer alignment, equipment installation, and qualification processes progressing smoothly. However, the week's selloff highlighted growing market anxiety: Apple climbed 3% on Friday, a day after posting its worst slide in over a year following the announcement of price increases for its MacBook and iPad products, citing higher component costs including chips.

Sources: Semiconductor Industry Association / Deloitte, 1 June 2026; Deloitte Semiconductor Industry Outlook, 2026; TrendForce, 25 June 2026; CNBC, 26 June 2026

This news roundup is produced by 1Oak Research for general informational and educational purposes only. Nothing in it constitutes investment advice, a solicitation, or a recommendation to buy, sell, or hold any security or financial instrument. All investments carry risk, including the possible total loss of capital. 1Oak Research is not a licensed or regulated financial entity.