Semiconductor Sell-Off Ripples Across Global Markets

A broad sell-off in chip stocks, which began earlier in the week in the United States, intensified on 16 July and spread across Asia. Stocks fell as a sell-off in technology shares overshadowed a raft of solid earnings reports; the S&P 500 lost 0.51%, while the Nasdaq Composite declined 1.47%, with the tech-heavy major averages weighed down by weakness in semiconductors. The proximate trigger: chip stocks slid after Taiwan Semiconductor posted an increase in its spending forecast, with the company guiding capital expenditures of $60–64 billion for the year, up from prior guidance of $52–56 billion. The contagion moved swiftly to Korea: Asian semiconductor stocks tumbled, with SK Hynix falling over 11% in Seoul, reversing the prior session's 8% rally. The benchmark Kospi index plunged 6.4% on Thursday, slipping into a bear market after the Bank of Korea raised interest rates for the first time since January 2023. In Japan, AI-linked equipment makers Advantest fell more than 6%, SoftBank Group slid nearly 7%, and Tokyo Electron lost over 5%.

Sources: CNBC, 15–16 July 2026; Saxo Hong Kong Asia Market Quick Take, 14 July 2026

FOMC Minutes Signal Hawkish Split; Rate Hike Odds Firm

Fed officials were divided on the future of interest rates and discussed a range of scenarios for monetary policy, according to minutes from the June 2026 FOMC meeting; participants generally assessed that upside risks to inflation remained elevated, and a few commented there was a case for raising interest rates. The Fed held its benchmark rate at 3.50–3.75% at its June 17 meeting in a unanimous 12–0 vote; however, the updated Summary of Economic Projections turned notably more hawkish — the median projection for the year-end funds rate rose to 3.8%, and nine of eighteen participants pencilled in at least one hike in 2026. The statement flagged that inflation remains elevated relative to the 2% goal, partly reflecting energy and supply shocks tied to heightened Middle East tensions. Markets are now focused on the July 28–29 FOMC meeting, with traders pricing a nearly 60% chance that rates will be a quarter- or half-percentage point higher by the conclusion of the October meeting.

Sources: Trading Economics / FOMC Minutes, 14 July 2026; PrimeRates, 10 July 2026; CNBC, 15 July 2026

U.S. Direct-Lending Volume Hits Three-Year Low

Despite a rebound in fundraising, deployment has slowed sharply. Direct lending by U.S. private credit firms fell sharply in the second quarter even as fund-raising by such firms rebounded, underscoring the deviation between capital raised for the asset class and the deal flow to absorb it. U.S. direct-lending volume fell approximately 55% quarter-on-quarter to $33.59 billion in Q2 from $74.67 billion in Q1 — the lowest level since Q2 2023 — while deal count declined to 154 from 217. Separately, HSBC Holdings is halting lending to riskier private credit funds following high-profile corporate bankruptcies that exposed shaky underwriting standards; Europe's largest bank informed clients it will not renew certain credit facilities or provide back leverage. On the fundraising side, H1 2026 saw notable closes: Crescent Capital Group collected $10.8 billion for its fourth U.S. direct lending fund — the largest in the firm's history — exceeding its initial target by more than $2.5 billion.

Sources: Reuters / 93.3 The Drive, 9 July 2026; Bloomberg, 7 July 2026; Alternative Credit Investor, 10 July 2026

Singapore Q2 GDP Holds Firm; APAC Markets Trade Mixed

Singapore's economy grew 5.7% year-on-year in Q2 2026, down from 6.3% in Q1, according to advance MTI estimates; manufacturing expanded 12.2%, up from 8%, while quarter-on-quarter GDP rose 1.1%. Broader Asian equity markets were mixed on 16 July: Japan's Nikkei 225 fell 2.6% as higher bond yields weighed on equities, and Chinese benchmarks declined on concerns over economic growth and the property sector. In contrast, Hong Kong's Hang Seng Index gained 2.13% and Taiwan's TAIEX rose 2.61%, supported by selective buying in technology shares. Sentiment in Hong Kong has been stabilising: the Hang Seng Tech Index, which fell 36% between an October peak and a June low, has seen some recovery as investor sentiment toward Alibaba and Tencent turns more positive.

Sources: Saxo Hong Kong Asia Market Quick Take, 14 July 2026; CoinPedia Asian Market Today, 16 July 2026; MTI Singapore advance estimates

TSMC Reports 36% Revenue Jump; Alibaba-Apple AI Partnership Announced

Amid the wider chip volatility, key earnings and strategic developments emerged. TSMC ADRs slipped nearly 3% despite reporting a 36% jump in quarterly revenue, as investors focused on the elevated capex guidance. On the software side, U.S.-listed shares of Alibaba rose 5% in premarket trading on news that its Qwen AI model will be integrated into Apple Intelligence in China, according to state media. The SK Hynix U.S. listing earlier in the month was also notable: SK Hynix raised $26.5 billion in its U.S. debut, marking the largest foreign listing in American history, while simultaneously committing $8.6 billion to acquire advanced EUV lithography equipment from ASML.

Sources: Saxo Hong Kong, 14 July 2026; CNBC, 15 July 2026; Distill Intelligence Semiconductor Briefing, 10 July 2026

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