1. US Direct Lending Volumes Fall Sharply Even as Fundraising Rebounds

Private credit's capital-raising momentum has diverged markedly from deal activity. US direct lending volumes fell approximately 55% quarter-on-quarter to $33.59 billion in Q2 2026 from $74.67 billion in Q1 — the lowest level since Q2 2023 — even as fundraising rebounded. North America-focused closed-end direct-lending funds raised $16.25 billion in the quarter, the highest in two years, according to Preqin data. EY's global wealth and asset management leader cited softer M&A and buyout activity, borrower delays, competition from the broadly syndicated loan market, and greater selectivity among private-credit managers as contributing factors. Some caution also stems from loans made during the 2021–2022 boom, when borrowers took on debt at lower rates and looser terms; higher rates have since made those loans harder to service. (Source: Reuters / PitchBook/LCD, 9 July 2026)

2. HSBC Retreats From Riskier Private Credit Lending

HSBC Holdings is halting lending to riskier private credit funds following high-profile corporate bankruptcies that exposed shaky underwriting standards in the industry, according to the Financial Times. Europe's largest bank informed clients in recent weeks that it will not renew certain credit facilities or provide back leverage. The move adds to a broader pattern of tightening bank access to private credit vehicles. In investment grade, elevated all-in yields and persistent demand have absorbed volatility, but in high yield, pressure points are emerging among lower-quality issuers, leveraged private credit borrowers, and sectors vulnerable to refinancing stress, according to State Street's Q3 2026 Credit Research Outlook. (Sources: Bloomberg / Financial Times, 7 July 2026; State Street Global Advisors, 7 July 2026)

3. Semiconductor Sector Suffers $1+ Trillion Selloff Amid AI Capex Doubts

Semiconductor stocks experienced a sharp downturn erasing over a trillion dollars in market value, as Wall Street questioned the sustainability of record AI capital spending; concerns include dot-com-era valuations, a hawkish Fed, and doubts about AI infrastructure returns. The Philadelphia Semiconductor Index fell 10.8%, the VanEck Semiconductor Index declined 13% over ten sessions, with Intel, Micron, AMD and Samsung all under pressure. Despite this, many analysts view the selloff as a "mid-cycle reset," citing strong earnings growth and attractive valuations for select chipmakers. On the corporate side, SK Hynix raised $26.5 billion in its US debut, marking the largest foreign listing in American history, while simultaneously committing $8.6 billion to acquire advanced EUV lithography equipment from ASML. Micron Technology also accelerated domestic expansion by raising its US investment target to $250 billion through 2035. (Sources: Forbes, 8 July 2026; Distill Intelligence / Semiconductors & AI Chips Weekly Briefing, 10 July 2026)

4. Asian Markets: Semiconductor Volatility, Hong Kong Listing Milestone

Asian markets ended the week of 3 July with notable semiconductor-driven swings: South Korea's KOSPI jumped 5.8% to 8,088, rebounding from a 7.9% plunge, as Samsung and SK Hynix each climbed over 10% on reports that Anthropic was in talks with Samsung on a custom AI chip. Hong Kong's Hang Seng rose 1.3% to 23,350, led by BYD (+6.5%) and a 2%+ gain in the Hang Seng Tech Index, with mainland investors net buying HK$4.54 billion via Stock Connect. By the following week, however, Asia-Pacific markets closed lower, with the KOSPI leading declines at –4.91%; the Korea Exchange had earlier activated circuit breakers as the index fell more than 8% intraday. On the IPO front, Luxshare Precision, Apple's key supplier, began trading in Hong Kong after raising HK$24.3 billion in the city's biggest listing of 2026. (Sources: Saxo Hong Kong Market Quick Takes, 6–9 July 2026; CNBC, 7 July 2026)

5. Fed Hawkishness Defines Rate Outlook; Credit Spreads Resilient

At his first FOMC meeting as chair in June 2026, Kevin Warsh held the federal funds rate steady; he declined to participate in the Summary of Economic Projections, and overall Fed officials' year-end rate expectations rose compared to March. Warsh came off as hawkish on inflation in his press conference. The June FOMC projections showed that a rate hike is more likely in 2026 than a rate cut, a hawkish shift that has been exerting upward pressure on mortgage rates. The IMF, meanwhile, kept its 2026 global growth forecast at 3%, lifting 2027 to 3.4%, and projected global inflation at 4.7% in 2026, easing to 3.9% in 2027. Despite policy uncertainty, US investment-grade and high-yield spreads have remained notably resilient through 2026 despite recurring macro and geopolitical volatility, with stable leverage, strong interest coverage, and persistent demand absorbing bouts of volatility, even as spreads remain historically tight. (Sources: NerdWallet / US News Mortgage Outlook, July 2026; Saxo Hong Kong, 9 July 2026; State Street Q3 2026 Credit Research Outlook)

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.