1. Fed Expected to Hold at 3.50–3.75% as September Hike Risk Rises

The Federal Open Market Committee convenes July 28–29 with markets widely expecting no change to the fed funds target range. Markets expect the FOMC to leave interest rates unchanged at the conclusion of its July 29 meeting, but possibly set the stage for a hike as soon as September. The backdrop is a hawkish pivot: 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, reflecting both the impact of the Middle East conflict on inflation and increased confidence in labour-market stability. The Fed's own June 2026 Summary of Economic Projections revised PCE inflation to 3.6% for the full year. The FOMC has maintained the target range at 3½–3¾ percent since the beginning of the year, noting that economic activity is expanding at a solid pace despite elevated uncertainty, while inflation remains elevated relative to the 2 percent goal, in part reflecting supply shocks including energy.

Sources: Federal Reserve Monetary Policy Report, July 2026; CNBC, 27 July 2026

2. AI Capex Concerns Drag on US Tech Equities

US equities closed mixed on Friday 25 July, with the Nasdaq ending in the red. US stocks ended mixed, with the Nasdaq ending in the red, triggered by a tech selloff on growing concerns over the massive spending on AI, as investors awaited quarterly results from megacap tech companies. Apple shares jumped 3.5% and provided support to the Dow, while the S&P 500 gained less than 0.1%. Real estate and materials were the biggest gainers, while tech stocks were the worst performers; the Information Technology Select Sector SPDR declined 1.4%. Deutsche Bank strategist Parag Thatte noted that "concerns around capital expenditures related to artificial intelligence are overshadowing a strong earnings season, leading investors to cut exposure to equities," with equity positioning having fallen to neutral. Into Monday 27 July, futures advanced more than 1% for the S&P and Nasdaq as a sharp decline in oil prices eased inflationary concerns, with technology stocks also rebounding after sliding last week on AI spending impact fears.

Sources: Yahoo Finance / Zacks, 27 July 2026; CNBC, 27 July 2026; Investrade Morning Preview, 27 July 2026

3. ASML Shares Hit on China DUV Lithography Report

Semiconductor equipment stocks came under pressure late last week after a report that China had been developing deep ultraviolet (DUV) lithography machines domestically. Equities came under pressure after The Information reported, citing sources, that China had begun developing deep ultraviolet lithography machines used to build semiconductors; U.S.-listed shares of ASML, the dominant player in the space, fell almost 6% on the back of the report. The news adds a geopolitical dimension to the ongoing AI chip cycle debate. Earlier in July, the broader semiconductor selloff had been catalysed by signs that the frantic capex cycle may be approaching a turning point: Meta, having invested tens of billions in AI infrastructure, indicated it has surplus capacity worth monetising, suggesting that supply may be beginning to catch up with demand and potentially altering pricing power across the AI value chain. SK Hynix also announced it was delaying its HBM4 memory expansion in favour of higher-margin DDR5 production — a supply-chain shift interpreted as evidence of moderating AI-driven memory demand growth.

Sources: CNBC, 27 July 2026; Intellectia AI, July 2026

4. APAC Markets Stabilise; Singapore GDP Beats, Hang Seng Advances

Asian markets opened Monday on a firmer footing, aided by the geopolitical oil-price relief. The Nikkei Index gained 320 points to 64,931, the Shanghai Index gained 44 points to 3,858, and the Hang Seng Index advanced 243 points to 25,207. The near-term outlook for the region is underpinned by Singapore's robust second-quarter growth print: Singapore's economy grew 5.7% year-on-year in Q2 2026, down from 6.3% in Q1, according to advance MTI estimates, with manufacturing expanding 12.2% and quarter-on-quarter GDP rising 1.1%. Hong Kong's Hang Seng Technology Index has seen some stabilisation recently, with the index, which fell 36% between an October peak and a June low, registering a degree of stabilisation as investor sentiment toward Alibaba and Tencent turns more positive.

Sources: Investrade Morning Preview, 27 July 2026; Saxo Hong Kong Asia Market Quick Take, 14 July 2026

5. Private Credit LPs Signal Diversification Away from Direct Lending

A notable structural shift is emerging in institutional private credit allocation. 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; the firm's 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' private credit portfolios, with 62% of respondents citing it as a primary or secondary focus; however, only 6% say they plan to increase allocations to mid and upper-mid-market direct lending. This comes as 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 fundraising by major managers remained elevated. Barings secured more than $19 billion over a two-year fundraising period for its global direct lending strategy, with deployment activity targeting 355 transactions globally.

Sources: Alternative Credit Investor, 23 July 2026; Reuters via 93.3 The Drive, 9 July 2026; Alternative Credit Investor, 10 July 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.