Asia's chip selloff deepened as SK Hynix and Samsung slid. Brent held above $85. Retail sales, jobless claims, TSMC, Netflix, and UnitedHealth headline Thursday.
The overnight tape extended yesterday's story.
The AI trade weakened again as South Korea's Kospi fell 7.3% after dropping as much as 10% intraday, triggering circuit breakers. SK Hynix (SKHYV) and Samsung each lost about 12% after reports that SK Hynix may slow high-bandwidth memory expansion and shift toward lower-cost DRAM production. The concern is not demand. It is supply discipline inside the AI memory market.
The weakness spread across Asia. Japan's Nikkei fell 3%. Topix lost 1.1%. Advantest dropped 10%, while Tokyo Electron lost 3%. Hong Kong's Hang Seng bucked the trend, rising 1.3%.
U.S. futures were far calmer. Dow futures slipped 42 points, or 0.08%. S&P 500 futures edged down 0.04%. Nasdaq 100 futures lost 0.23%.
Wednesday showed the split clearly. The S&P 500 gained 0.4%. The Nasdaq rose 0.6%. Apple (AAPL) climbed 4% to another record high while semiconductor shares remained under pressure.
Today brings the next round of market tests.
Retail sales, jobless claims, the Philadelphia Fed survey, and pending home sales all arrive before the open. Earnings from Taiwan Semiconductor (TSM), UnitedHealth (UNH), GE Aerospace (GE), Abbott Laboratories (ABT), U.S. Bancorp (USB), Netflix (NFLX), and Intuitive Surgical (ISRG) will determine whether investors keep buying AI despite growing cracks inside the semiconductor complex.
The Signal
The AI trade is no longer moving together. Software leaders continue rising while hardware names face a much tougher test.
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Oil stayed elevated as the geopolitical risk premium remained intact.
Brent traded above $85 for a third straight session while WTI held near $79. Fresh U.S. strikes on Iran and the reinstated naval blockade near the Strait of Hormuz kept traders focused on supply disruption rather than demand.
Commercial shipping through Hormuz remains more than 90% below prewar levels. Tankers continue waiting outside the Gulf, and each new military exchange delays any return to normal traffic.
The market has priced disruption.
It has not priced normalization.
Energy Signal
Brent above $85 reflects continuing transport risk. The market still needs evidence that shipping can safely resume.
Thursday's focus shifts back to the U.S. economy.
Retail sales are expected to rise 0.2% after increasing 0.9% previously. Initial jobless claims are forecast at 216,000 versus 215,000 last week. Investors will also watch the Philadelphia Fed manufacturing survey and pending home sales.
Treasury yields remain lower after this week's softer CPI and PPI reports. The 10-year Treasury trades near 4.58%.
Markets have reduced expectations for another immediate Fed hike. September odds have fallen sharply over the past week as inflation data improved.
Today's retail sales report becomes the next important test.
Strong spending could revive inflation concerns.
Weak spending would reinforce the view that price pressures are easing.
Macro Signal
Inflation has cooled. Consumer demand now decides whether the Fed stays patient.
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Taiwan Semiconductor (TSM) leads today's reports after Asia's sharp semiconductor selloff. Investors want updates on AI demand, advanced packaging capacity, and customer orders following concerns about memory expansion.
Other major reports include UnitedHealth, GE Aerospace, Abbott Laboratories, U.S. Bancorp, Netflix, and Intuitive Surgical.
Meanwhile SpaceX remains near its $135 IPO price after giving back almost all of its post-listing gains. One month ago it represented peak AI IPO enthusiasm. Today it shows how quickly momentum can fade once fundamentals take over.
Capital Signal
Today's TSM results matter far more than the recent chip headlines. Investors need to know whether AI demand remains strong despite growing supply concerns.
Bitcoin held firm despite another volatile session.
BTC traded near $64,700 after briefly reaching $65,508 as softer inflation data reduced fears of another immediate Fed hike. Total crypto market value rose to roughly $2.24 trillion.
Spot Bitcoin ETFs attracted just over $180 million on Tuesday, including $139 million into BlackRock's IBIT. Ethereum ETFs also added money, led by BlackRock's ETHA.
Strategy (MSTR) kept its bitcoin holdings unchanged at 843,775 BTC while raising roughly $450 million in new capital, lifting cash reserves toward $3 billion.
Outside price action, Japan officially reclassified cryptocurrencies as financial assets, reducing tax rates for investors. In the U.S., final GENIUS Act stablecoin licensing rules are expected by July 18.
One reminder of ongoing risk came from DeFi, where an attacker manipulated Ostium's price reporting system and stole roughly $18 million.
The Verdict
Macro conditions improved and ETF inflows returned, but institutional positioning remains cautious while regulation and security continue evolving.
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Thursday begins with three different markets sending three different messages.
Semiconductors are questioning the next phase of AI infrastructure spending.
Bonds continue believing inflation is cooling.
Oil continues pricing a prolonged Hormuz disruption.
Retail sales and TSM's earnings will not settle every debate.
They will tell investors whether the economy remains strong enough to support AI spending while inflation continues moving in the right direction.
The next move belongs to the consumer and the semiconductor supply chain.
