Investors are now focused on the Federal Reserve’s interest rate decision, with markets pricing in a nearly 70% probability that rates will remain unchanged at 3.5%–3.75%. The Fed’s guidance will be closely watched for clues on the outlook for inflation and economic growth.
Tuesday’s regular trading session saw the Dow Jones climb more than 500 points for its third consecutive gain, supported by earlier declines in oil prices. In contrast, the Nasdaq Composite fell for a fifth straight session, its longest losing streak since January, as weakness in semiconductor stocks continued. The VanEck Semiconductor ETF (SMH) dropped 3.5% on the day and has fallen more than 9% over the past week.
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Investors are increasingly worried about the short-term costs of the AI investment boom before seeing the promised productivity benefits. Heavy AI spending by companies like Alphabet has raised concerns about higher debt levels, inflation pressure, and whether the returns will justify the massive capital expenditure.
The key debate for the Federal Reserve is whether to tighten policy to control inflation or tolerate near-term pressure because AI could eventually boost productivity, reduce costs, and support stronger growth without higher inflation.
Supporters of the AI productivity view compare today’s boom with the 1990s technology boom, when innovation helped drive growth and low inflation. However, the current environment differs because the US faces larger fiscal deficits, an aging population, less globalisation, and higher supply-chain costs, making a repeat of the 1990s “Goldilocks” economy less certain.
The Fed remains divided between those expecting an AI-driven productivity boost and those worried about renewed inflation. Markets are watching whether policymakers will maintain a cautious approach or raise rates to prevent inflation risks from building.
Markets will also closely watch earnings from Procter & Gamble, Humana, Microsoft, Meta Platforms, and Qualcomm, which could drive market sentiment alongside the Fed’s policy announcement.
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Ford Motor gained 6% after delivering stronger-than-expected second-quarter earnings and raising its 2026 outlook, although automotive revenue came in slightly below expectations. Rocky Brands jumped 16% as quarterly earnings more than tripled year-on-year, supported by strong double-digit brand growth and tariff refunds. Mondelez added 1% after reporting earnings of 73 cents per share on US$9.36 billion in revenue, beating estimates of 68 cents and US$9.20 billion, while its adjusted gross margin of 34.0% exceeded the expected 32.8%. Manhattan Associates rose 7% after beating earnings and revenue forecasts and raising its full-year guidance. Teradyne surged 14% in after-hours trading after exceeding expectations on both quarterly results and forward guidance.
On the downside, CoStar plunged 12% after missing revenue expectations and guiding current-quarter revenue to US$935–945 million, below the US$967.5 million consensus. Varonis Systems fell 8% as its guidance disappointed investors despite broadly in-line earnings expectations. PPG Industries dropped 4% after missing earnings and EBITDA estimates, although it maintained its full-year outlook.
Semiconductor stocks were mixed. KLA Corp slid 9% after issuing cautious guidance despite forecasting first-quarter revenue of around US$4.0 billion versus expectations of US$3.92 billion. NXP Semiconductors lost 5% as its third-quarter earnings outlook offered little upside despite a 58.0% gross margin that matched forecasts. Skyworks Solutions tumbled 10% after posting a slightly weaker-than-expected 44.9% adjusted margin versus the expected 45.0%, with fourth-quarter EPS guidance of US$1.27 narrowly missing the US$1.28 consensus.
Meanwhile, Seagate Technology climbed 8% after forecasting first-quarter earnings of around US$7.30 per share, well above the US$5.80 consensus, alongside projected revenue of US$4.1 billion versus expectations of US$3.75 billion. The upbeat outlook also lifted Western Digital, whose shares gained 4%. Visa slipped nearly 2% after its fiscal 2026 guidance failed to impress investors, despite reaffirming mid-teens earnings growth and announcing plans to cut around 2,600 jobs, or approximately 7% of its workforce.
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SpaceX shares have fallen sharply after their record-setting debut, losing around 20% of their value as investors reduced exposure to high-risk technology and AI-related companies. The stock dropped to US$107.80, leaving SpaceX with a loss of more than US$1.2 trillion in market value from its June 16 peak. The sell-off was driven by concerns over stretched AI valuations, geopolitical uncertainty, and potential selling pressure from upcoming share unlocks, with up to 911.5 million shares becoming available for trading on Aug 6. Short sellers have also increased their bets, with about 30% of available shares sold short, generating nearly US$8 billion in paper profits as the stock declined. Some bearish analysts have identified US$100 per share as a possible downside level if sentiment continues to weaken. =====================================================================================
Chip stocks have fallen sharply as investors question the sustainability of the AI boom, with the semiconductor index down more than 20% amid concerns over high valuations and future returns. However, analysts believe this could be a correction rather than the end of the AI cycle. The sell-off was driven by worries over heavy AI infrastructure spending, potential debt risks, and circular financing arrangements involving major technology companies. Growing competition from China, including cheaper AI models and advances in chip technology, has added further pressure. Investors are now questioning whether massive AI investments will generate enough profits to justify current valuations, leading to a reassessment of the long-term strength and pace of the AI growth cycle. =====================================================================================
The recent weakness in Intuitive Surgical (ISRG) was therefore company-specific rather than caused by broad market selling. Despite beating earnings expectations, with EPS of $2.80 versus $2.41 expected and revenue growth of 18.5% to US$2.89 billion, ISRG shares fell due to cautious procedure growth guidance and a recall involving some Da Vinci surgical components. The setup is a bull call spread, buying the $355 August 21 call and selling the $360 call, with an estimated cost of $2.50 per spread and equal risk/reward. However, the reversal is still early and would exit if momentum weakens.
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The S&P 500 remains close to its record high, supported by strong earnings and expectations that geopolitical tensions, including Iran-U.S. concerns, will not escalate into a prolonged conflict. However, weakness beneath the surface suggests the market may face more pressure ahead.
Around 160 S&P 500 stocks are trading below their 50-day moving averages, nearly 200 stocks are down for the month, and 43 have fallen more than 10% in July. More than half of the index components have also seen weakening RSI momentum, showing increasing stock-specific weakness despite the index remaining resilient.
Analysts warn of a growing gap between the calm overall market and rising volatility in individual stocks. With major companies such as Microsoft, Apple, Amazon and Meta reporting earnings, stronger or weaker results could determine whether stock-specific volatility spreads into the broader market.
So far, earnings have been mostly positive, with 83% of reporting S&P 500 companies beating expectations, but high-profile misses from Tesla and Alphabet highlight the risks.
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Hongkong Land delivered a stronger 1H2026 performance, with underlying profit rising 11% year-on-year to US$259 million and underlying earnings per share increasing 14% to 12.07 US cents. Reported profit jumped significantly to US$1.26 billion, boosted by non-cash property valuation gains from its portfolio. The company’s NAV per share also improved to US$14.71 from US$14.30 at the end of 2025, while the interim dividend was increased to 8 US cents per share from 6 US cents previously, reflecting improved earnings and confidence in its financial position
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DFI Retail Group delivered a strong turnaround in 1HFY2026, reporting US$118 million in earnings compared with a US$38 million loss a year earlier, despite revenue declining 6% to US$4.14 billion. Underlying profit attributable to shareholders increased 11% to US$117 million, supported by continued growth in its health and beauty businesses, while its convenience and home furnishings segments also returned to growth. The company announced an increased interim dividend of 6.2 US cents per share, compared with 3.5 US cents previously. DFI expects full-year organic revenue growth of 3% to 4% and underlying profit of US$285 million to US$305 million.
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EGP Energy Corporation’s IPO was 1.7 times subscribed at an offering price of S$0.51 per share, with total valid applications of nearly 31.5 million shares compared with an offering size of over 18.8 million shares. The IPO and cornerstone placement raised approximately S$30.6 million in gross proceeds.
The company attracted several institutional cornerstone investors, including Amova Asset Management, Avanda Investment Management, Value Partners Hong Kong and Whitefield Capital Management. EGP Energy highlighted its growth plans following its listing, supported by a strong order book of about S$282.1 million with projects extending to 2031, alongside a new maintenance contract worth up to S$19.2 million.
EGP Energy, an electrical infrastructure solutions provider for transmission and distribution projects in Singapore, will begin trading on the SGX after its successful IPO.
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Serial Achieva expects to report a net loss for 1HFY2026, mainly due to unrealised foreign exchange losses from its Thailand subsidiary. However, the company expects a stronger gross profit and a narrower net loss compared with the same period last year, when it recorded a US$224,000 loss. The company highlighted that the loss has improved significantly, falling 75% year-on-year previously, and expects to release its results by Aug 14
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All-Link Air & Sea Limited, a logistics solutions provider, is seeking to raise $20.1 million through its SGX Mainboard IPO, offering 37.9 million shares at 53 cents each, which values the company at approximately $80.1 million. The offering comprises 35.8 million placement shares and 2.1 million public offer shares. The company’s revenue grew significantly from US$4.8 million in FY2023 to US$74.1 million in FY2025, while earnings increased from US$1.2 million to US$6.3 million over the same period. However, customer concentration remains a key risk, with its top five customers contributing nearly 90% of revenue in FY2025, and TikTok Group accounting for 98% of revenue in FY2024. IPO proceeds will be used to expand operations, pursue acquisitions and partnerships, invest in technology, and strengthen working capital. The public offer closes on Aug 3, with trading expected to begin on Aug 5.
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Aztech Global has reported earnings of $9.4 million for its 1HFY2026, down 41.7% y-o-y, on lower revenue of $151.4 million, down 18.4%. Aztech plans to pay an interim dividend of 0.5 cents per share, equivalent to a payout ratio of 41.3%. Aztech further warns that the operating environment will remain challenging amid ongoing macroeconomic and geopolitical uncertainties, evolving trade dynamics, cost pressures, foreign exchange volatility and limited visibility on customer demand. “The operating environment remains challenging, but we continue to make progress in customer acquisition and project development,” says executive chairman Michael Mun.
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Mapletree Logistics Trust (MLT) has reported distribution per unit (DPU) of 1.816 for 1QFY2027 ended June 30, up 0.2% y-o-y.
ST Engineering wins $840 mil rail services contract in Taiwan
KORE achieves record 1H leasing, declares 1HFY2026 DPU of 0.4 US cents
ESR-REIT’s 1HFY2026 DPU rises 2.4% y-o-y to 11.51 cents, to divest 12 Ang Mo Kio Street 65 at 2.1% above valuation
CLAS‘ core DPS fell 10% y-o-y in 1H2026 but total DPS is unchanged
KIT reports 1HFY2026 DPU of 1.99 cents, up 1% y-o-y
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Hong Kong stocks ended higher, with the Hang Seng Index (HSI) rising 103 points (+0.4%) to 25,310, while the Hang Seng Tech Index gained 0.6% to 4,730 and the HSCEI rose 0.8% to 8,436. Market turnover was strong at HK$250.63 billion.
Large-cap technology stocks led gains, with Xiaomi up 2%, Meituan +1.1%, Tencent +0.9%, and Alibaba +0.9%. Financial stocks also strengthened, with CCB hitting a new high after rising 1.6%, while ICBC and BOC Hong Kong also reached record levels.
Among major movers, Horizon Robotics (+8.2%), PICC P&C (+7.9%), NetEase (+4.5%), and JD.com (+4.1%) performed well, while Laopu Gold plunged 23.8% and CATL fell 5%.
The broader market saw heavy selling pressure in some technology and semiconductor names, with QuantGroup down 57.1%, KB Laminates -16%, ASMPT -13.7%, and Biren Technology -11.1%. Overall, sentiment remained positive for large-cap internet and banking stocks, but speculative technology counters faced sharp corrections.
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Loop Capital believes CrowdStrike (CRWD) is well positioned to become a leader in agentic AI cybersecurity, initiating coverage with a Buy rating and a $230 price target, implying about 27% upside from the previous close.
Analyst Yun Kim said CrowdStrike’s strong security information and event management (SIEM) technology, AI security capabilities, and leading sales team give it an advantage as companies adopt AI-driven security solutions.
The stock had previously fallen due to fears that AI could disrupt cybersecurity companies, but rising AI-driven threats have increased demand for stronger protection, helping CrowdStrike shares rebound significantly.
Loop Capital sees growing AI-powered attacks as a catalyst for enterprises to accelerate investment in cybersecurity platforms, creating a major growth opportunity for CrowdStrike.
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Several Malaysian companies reported major developments. Favelle Favco faces a US$52.5 million lawsuit against its US unit over a 2023 New York crane collapse incident, with the claim filed by an insurer that compensated the affected property owner.
Dufu Technology delivered its strongest quarterly performance in nearly four years, with net profit jumping almost fivefold to RM13.9 million as higher HDD component sales lifted revenue 35.4% to RM92.4 million. It declared an interim dividend of 2 sen per share.
Pantech Global recorded a strong quarter, with revenue reaching a record RM159.68 million (+27% y-o-y) and net profit rising 36% to RM16.36 million, supported by stronger industrial and infrastructure demand.
OGX Group reported FY2026 net profit growth of 51.2% to RM23.15 million, driven by higher IT infrastructure project completion and improved margins.
Other highlights include Ecomate securing a RM13.4 million software licence order from Gamuda, LYC Healthcare facing a possible trading suspension due to delayed annual report submission, Bus Cap appointing a new director, and IJM seeking board re-election approval for its CEO and managing director.
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