US Equities Slide on Tech Earnings and AI Capex Concerns

US equities fell on 23 July as oil prices surged amid escalating Middle East tensions and investors weighed results from two of the market's largest companies. The Dow Jones Industrial Average lost 506.93 points (–0.97%) to 51,711.65; the S&P 500 dropped 1.21% to 7,408.30; and the Nasdaq Composite declined 2.15% to 25,137.69, weighed down by a 7% drop in Alphabet and a 14% loss in Tesla following their earnings reports. The Alphabet result in particular sharpened the ongoing debate over whether elevated AI capital expenditure will translate into near-term earnings.

Source: CNBC Markets, 23 July 2026

AI Semiconductor Cycle at an Inflection Point

The recent semiconductor selloff was driven not by a single event but by converging factors. Meta, having invested tens of billions in AI infrastructure, indicated it now has surplus capacity worth monetising — a signal that the capex cycle driving semiconductor stocks to all-time highs may be approaching an inflection point where supply begins to catch up with demand. Compounding the shift, SK Hynix slid 9–12%, leading the KOSPI's sharp intraday decline, after announcing it would delay its HBM4 memory expansion in favour of higher-margin DDR5 production — a supply-chain move interpreted as evidence of moderating AI-driven memory demand growth. Meanwhile, the United States approved the shipment of a limited number of advanced AI chips to select Chinese buyers, even as Nvidia reportedly halved its Asian buyer list to tighten export controls.

Sources: Intellectia AI, July 2026; Distilling Intelligence Semiconductors Weekly, 17 July 2026

Fed Holds Rates; July 28–29 Meeting in Focus

The FOMC has maintained the target range for the federal funds rate at 3½–3¾ percent since the start of the year. The Committee notes that economic activity is expanding at a solid pace despite elevated uncertainty partly related to the Middle East conflict; productivity growth and capital investment are strong; and inflation remains elevated relative to the 2 percent goal, in part reflecting supply shocks in energy. Since the start of the year, Treasury yields have risen and the market-implied expected path of the federal funds rate has moved up, with the largest increases at shorter maturities as expectations of a higher federal funds rate path pushed up real interest rates. The next FOMC decision is scheduled for 29 July 2026.

Source: Federal Reserve Monetary Policy Report, July 2026; Forbes Fed Meeting Tracker, July 2026

Private Credit LPs Pivoting Away from Direct Lending

Institutional investors are expected to diversify their private credit portfolios away from direct lending over the next year, according to new research from Rede Partners. Its Private Credit Market Intelligence Report 2026 found that 70% of limited partners expect diversification beyond direct lending to become the leading trend across the asset class over the next 12 months. Direct lending remains a core part of investors' portfolios — cited by 62% as a primary or secondary focus — yet few expect to grow exposure, with only 6% planning to increase allocations to mid and upper-mid-market direct lending. Separately, US 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 of a prior year, even as managers continued to raise fresh capital.

Sources: Alternative Credit Investor / Rede Partners, 23 July 2026; Reuters via 93.3 The Drive, 9 July 2026

APAC Equity Markets Under Broad Pressure

Asia-Pacific markets closed sharply lower in the most recent session, with South Korean equities leading losses: the KOSPI plunged over 5.7% to 6,690.62 and the KOSDAQ fell 5.3% to 748.22, while Japan's Nikkei 225 slid 2.7% to 64,611.15 and Australia's S&P/ASX 200 fell 0.75% to 8,772.3. Attention in Chinese markets remained focused on memory chipmaker CXMT: its Shanghai STAR Market listing, expected on 27 July, has become the latest focal point for investors after Chinese technology shares pulled back in recent sessions; the company raised $8.6 billion in Asia's largest IPO so far this year.

Source: CNBC Markets, 24 July 2026

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