US futures indicated a bounce in technology stocks after the holiday break, with Nasdaq 100 contracts climbing 1% and S&P 500 futures rising 0.4%. This movement comes as investors anticipate earnings reports from South Korea's memory chip giants, Samsung Electronics Co. and SK Hynix Inc., which will test the current AI-driven rally. Samsung's earnings are due Tuesday, followed by SK Hynix's $29 billion US listing days later. Concerns persist whether the AI rally has run too far and if massive capital outlays are guaranteed strong returns, with Morgan Stanley strategists suggesting a rotation out of tech into lagging sectors.
Key market events this week include a thin data calendar and the impending release of the Federal Reserve's June FOMC meeting minutes, which investors hope will provide clarity on future interest rate paths. SpaceX is also set to join the Nasdaq 100 on Tuesday, potentially triggering index-related repositioning. Meanwhile, the yen continued to weaken against major currencies, with Goldman Sachs Inc. becoming increasingly bearish on the Japanese currency, which is trading near its lowest levels since 1986. The falling yen comes amidst fiscal pressures in Japan and higher for longer US Treasury yields.
Commodity markets saw oil prices fall, with Brent crude down 0.5% to $71.77 a barrel, as flows through the Strait of Hormuz remained stable and OPEC+ signaled increased supplies. Spot gold also declined 0.5% to $4,154.34 an ounce. Treasuries rose, sending the 10-year yield down two basis points to 4.46%. Bitcoin rose 0.3% to $62,851.23, while Ether fell 0.3% to $1,770.35. The Stoxx Europe 600 fell 0.3% from a record high, while Asian stocks fluctuated.
Corporate news included Hon Hai Precision Industry Co. (Foxconn) reporting a 40% jump in quarterly sales, driven by AI demand. EasyJet agreed in principle to a takeover offer exceeding £5 billion from Castlelake LP. Thales agreed to buy the Gorgé family’s 35.51% stake in Exail Technologies SA. ITV Plc will sell its media and entertainment arm to Comcast Corp.-owned Group Ltd. for as much as £1.6 billion. Luxshare Precision Industry Co. aims to raise HK$24.3 billion ($3.1 billion) in its Hong Kong listing at the maximum price.
