1. Fed Holds at 3.50–3.75%; "Higher-for-Longer" Repricing Intensifies

At its 17 June meeting, the FOMC held its target federal funds rate in the 3.50%–3.75% range, a decision investors broadly expected. The session was notable as the first under new Chair Kevin Warsh, who stressed that delivering price stability remains the Fed's primary objective and signalled the central bank will no longer provide traditional forward guidance on future rate decisions. The backdrop is challenging: core PCE inflation rose from 3.0% in December 2025 to 3.3% in April 2026. As of 2 July, the effective federal funds rate stood at 3.63%, with futures markets pricing a path that rises to roughly 3.8% by October 2026 and approaches 4% around year-end. Elevated energy prices have increased investor expectations for higher policy rates later this year, a sharp change from earlier expectations for one to two rate cuts in 2026.

Source: U.S. Bank Asset Management / Federal Reserve, 17–18 June 2026; StreetStats, 2 July 2026

2. Meta's AI Cloud Push Reshapes Infrastructure Landscape; Semis Sell Off

Meta Platforms reportedly plans to rent its artificial intelligence infrastructure to other companies, with sources telling Bloomberg and CNBC that the Facebook parent will sell excess capacity not used by its internal workloads. The news sent Meta's shares 8.8% higher, while AI cloud provider CoreWeave closed 13.9% lower and Nebius Group dropped 17%. Meta expects to spend up to $145 billion on capital expenses in its current fiscal year, on top of the $70 billion it invested in 2025. The announcement coincided with a broader semiconductor rotation: the Dow scaled record highs on 3 July as investors reacted to a weaker-than-expected nonfarm payrolls report, while semiconductors fell for a second consecutive day — the VanEck Semiconductor ETF dropped 4.5%, led by a 13.6% decline in Teradyne and an 11.5% slide in KLA.

Source: SiliconAngle / Bloomberg / CNBC, 1 July 2026; CNBC Markets Live, 3 July 2026

3. US Equities Post Strong H1; Rotation Into Dow Gathers Pace

US stocks closed the first half sharply higher — the S&P 500 ended Q2 at 7,499.36 and the Nasdaq at 26,213.72, recording their best quarterly jump since 2020, while the Dow registered its biggest quarterly gain since 2022. For the full first half, the Dow climbed 8.9%, marking its best first-half performance since 2021; the S&P 500 rose 9.6% and the Nasdaq climbed 12.8%. Into Q3, however, a "Great Rotation" trade has been cited by market participants, with Dow Industrials attracting inflows from profit-taking in tech stocks, described as consistent with broadening breadth in what analysts characterise as a continued bull market. A weaker-than-expected June ADP reading of 98,000 private payroll additions versus 110,000 expected suggests the labour market may be cooling, adding to the Fed policy watch.

Source: Yahoo Finance / CNBC / Motley Fool, 1–3 July 2026

4. APAC Capital-Market Confidence at Survey High; Samsung & SK Hynix Pledge $1 Trillion in Chip Investment

Confidence in Asia-Pacific capital markets has reached its highest point since the ASIFMA Asia-Pacific Capital Markets Survey was first published, with two-thirds of financial firms planning regional expansion over the next three years, according to the survey's 2026 edition released by ASIFMA and KPMG on 30 June. Singapore and Hong Kong ranked first and second among APAC markets for ease of doing business, with equities, fixed income, and asset management among the top product lines earmarked for expansion. On the semiconductor side, Samsung and SK Hynix announced a massive expansion in South Korea, planning to invest over $1 trillion collectively over the next decade to build semiconductor clusters and AI data centres. Separately, the global AI buildout has benefited data-centre hubs such as Malaysia and Singapore, though the broader economic impact has not significantly accrued to labour markets given the capital-intensive nature of those investments.

Source: ASIFMA / KPMG Asia-Pacific Capital Markets Survey, 30 June 2026; Distill Intelligence Semiconductors Briefing, 3 July 2026; J.P. Morgan Private Bank Asia 2026 Outlook

5. Private Credit: Bifurcation Deepens as M&A Volumes Rise and Default Outlook Edges Higher

US M&A/LBO deal volumes in Q1 2026 increased by more than 30% relative to the same period last year, while activity in Europe remained relatively flat, with transaction count declining — reflecting fewer but larger transactions. Conditions are, however, diverging by segment: periods of market volatility typically see banks and liquid credit markets retrench, with private equity sponsors turning to private credit for execution certainty, while elevated redemptions in retail-oriented vehicles have led some large lenders to moderate investment activity, contributing to more attractive supply-demand dynamics for well-capitalised institutional lenders. On credit quality, KBRA projects the annualised direct lending default rate to rise from 1.5% in 2025 to 2.0% by year-end, with current credit risk remaining largely idiosyncratic — concentrated in select sectors such as consumer, certain 2021 vintages, and business models exposed to AI-related disruption. Separately, private credit has made significant headway into Asian markets, where corporate borrowers generally lack access to broadly syndicated loans or high-yield bond markets, and many have welcomed private credit as a compelling financing option — though the market remains smaller than the US and Europe.

Source: Northleaf Capital Q1-2026 Private Credit Market Update, May 2026; Ares Management Private Credit Outlook 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.