US Equities: Tech Earnings Spark Back-to-Back Weekly Declines

US equities closed the week in negative territory. On 23 July, markets fell as oil prices surged amid escalating Middle East conflict and investors weighed quarterly results from major technology companies, with Alphabet's report fuelling concerns about increased AI spending; the S&P 500 dropped 1.21% to 7,408.30 and the Nasdaq Composite declined 2.15% to 25,137.69. The tech-heavy index was weighed by a 7% drop in Alphabet and a 14% loss in Tesla following their earnings reports. For the week, the S&P 500 and Nasdaq recorded back-to-back weekly losses, falling 0.6% and 2.1% respectively, while the Dow declined 0.4% — its third straight losing week.

Source: CNBC, 23–24 July 2026

AI Infrastructure: CapEx Scrutiny Intensifies Amid Semiconductor Selloff

Investor sentiment toward AI infrastructure spending has shifted materially. The July 2026 semiconductor selloff reflected a convergence of factors; notably, Meta has invested tens of billions in AI infrastructure and indicated it now has surplus capacity worth monetising, raising the prospect that the frantic capex cycle may be approaching an inflection point where supply begins to catch up with demand. SK Hynix compounded concerns by announcing a delay to its HBM4 memory expansion in favour of higher-margin DDR5 production — a supply-chain shift investors interpreted as evidence of moderating AI-driven memory demand growth. Separately, the United States approved 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; Distill Intelligence Weekly Briefing, 17 July 2026

APAC Markets: Sharp Selloff as CXMT IPO and Tech Weakness Weigh

Asian markets came under pressure in the final days of the week. Asia-Pacific markets closed in the red on 24 July, with South Korean equities leading losses; the Kospi plunged over 5.7% to 6,690.62, Japan's Nikkei 225 slid 2.7% to 64,611.15, and the Topix fell 1.1%. China's ChangXin Memory Technologies listing stooked fears that its Shanghai STAR Market debut — expected 27 July — could pull liquidity from broader Chinese equities; CXMT raised $8.6 billion in Asia's largest IPO of the year so far. Earlier in the month, Singapore's Q2 2026 GDP grew 5.7% year-on-year, with manufacturing expanding 12.2%, providing a relative point of resilience in the region.

Sources: CNBC, 24 July 2026; Saxo Asia Market Quick Take, 14 July 2026

Private Credit: Institutional LPs Signal Diversification Away from Direct Lending

A notable shift in investor positioning is emerging within private credit. Institutional investors are expected to diversify their private credit portfolios away from direct lending over the next year, according to 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 over the next 12 months. Direct lending remains a core allocation, cited by 62% of respondents as a primary or secondary focus, yet only 6% plan to increase exposure to mid and upper-mid-market direct lending. This follows data showing US direct-lending volume fell approximately 55% quarter-on-quarter to $33.59 billion in Q2 2026 from $74.67 billion in Q1, its lowest level since Q2 of a prior year.

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

Interest Rates: Fed Holds Ahead of 28–29 July FOMC Meeting

The Federal Reserve's policy stance remains a dominant macro variable. The FOMC has maintained the target range for the federal funds rate at 3½–3¾% since the start of the year, noting that economic activity is expanding at a solid pace despite elevated uncertainty partly linked to the Middle East conflict, and that inflation remains elevated relative to the 2% goal. Futures markets assign a 0% probability to a rate cut at the 29 July decision; as of early July, the probability of a hold stood at 74.9% with a 25.1% chance of a quarter-point hike. Market expectations have shifted materially — from anticipating cuts to pricing in potential hikes — with Bank of America projecting three 25-basis-point increases in September, October, and December.

Sources: Federal Reserve Monetary Policy Report, July 2026; AOL/CME FedWatch, July 2026; Intellectia AI, July 2026

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