SG Morning Brief | Chips Rally 3rd Straight Day as Markets Shrug Off Iran Escalation; SK Hynix Debut Today

US Overnight

The Nasdaq rose 1.30% to 26,206.89 and the S&P 500 gained 0.81% to 7,543.64, with both posting a second consecutive advance. The Dow added 139.02 points (+0.27%) to 52,487.41. Remarkably, markets rallied even as the US-Iran conflict escalated sharply: the US struck a cumulative 170 Iranian targets over 48 hours, and Iran retaliated by hitting US military sites in Bahrain, Qatar, and Kuwait. Despite the hostilities, oil prices fell as traders assessed that the conflict remains contained and tanker traffic through Hormuz continues. The chip sector extended its recovery for a third straight session, powered by the heavily oversubscribed SK Hynix ADR offering and Micron's announcement of a $3 billion US investment. Initial jobless claims fell to 215,000, and existing home sales unexpectedly declined 2.4% in June. Earnings season kicked off with PepsiCo reporting mixed results that flagged weaker US consumer spending. The Nasdaq Golden Dragon China Index rose for a second straight session, with Alibaba gaining roughly 2%.

Key Movers

SOX +3%: ARM +9% / SanDisk +8% / AMD +6% — The chip rally broadened further with ARM surging over 9% and SanDisk gaining 7.6%. AMD rose nearly 6% and Micron added 4.5% after announcing plans to invest $3 billion in the US semiconductor supply chain. Lam Research, Applied Materials, and KLA each gained over 7%. The SOXX semiconductor ETF climbed 5%. SK Hynix's US ADR offering was 7x oversubscribed, confirming that institutional appetite for AI memory exposure remains robust despite the recent correction.

Meta (META) +5% — Meta rose nearly 5%, leading the Magnificent Seven, after Reuters reported the company plans to begin manufacturing its own AI chips by September. The move positions Meta alongside Apple, Google, and Amazon as another tech giant insourcing custom silicon. Nvidia posted its first weekly decline, underperforming the broader chip rebound.

PepsiCo (PEP) -3% — PepsiCo fell over 3% despite beating revenue estimates after reporting that US consumer spending "moderated" due to higher gas prices and macroeconomic volatility. The result is an early warning for earnings season: the consumer is feeling the squeeze from $4+ gasoline.

SGX Preview

The STI was near 5,070. DBS near S$62.18, UOB near S$37.91. The three-day chip recovery and SK Hynix's oversubscribed ADR debut are positive for Venture Corp and local semiconductor sentiment. Oil declining despite 170 US strikes on Iran is the most bullish geopolitical signal in weeks — it suggests the market believes the conflict will not permanently disrupt Hormuz traffic. PepsiCo's consumer weakness warning is worth monitoring for local consumer-facing names.

Asia Pre-Market

SK Hynix's Nasdaq ADR begins trading today — the most significant semiconductor IPO since Cerebras in May. The offering was priced after 7x oversubscription, and the debut will test whether the AI memory trade can attract fresh capital or whether the recent volatility has exhausted demand. Oil's decline despite active hostilities between the US and Iran suggests the war premium has structurally diminished.

Today's US Earnings and Economic Calendar

Next Tuesday July 14 — Q3's Super Day:

• June CPI (8:30 AM ET / 8:30 PM UTC+8)
• JPMorgan, BofA, Goldman Sachs, Wells Fargo, Citigroup earnings

Week Ahead Spotlight: SK Hynix Debut + CPI Super Day — Today's SK Hynix ADR debut is the near-term test for the AI memory trade. A strong first-day pop validates the thesis that institutional demand for memory exposure is insatiable. A flat or negative debut — like SpaceX's recent struggles — would signal valuation fatigue. Tuesday July 14 is the most consequential single day of Q3: June CPI lands alongside five major bank earnings. May CPI was 4.2% with oil at $95. June oil averaged roughly $72. If CPI drops below 4%, the rate hike narrative fades and earnings season begins on a bullish footing.

One More Thing

Oil falling while the US bombs 170 Iranian targets is the most counterintuitive trade of 2026. It means the market has fully priced out the Hormuz risk premium. Tankers are still crossing, insurance rates are stabilizing, and traders believe neither side wants to permanently close the strait. That is a massive macro shift. If it holds, oil stays in the $70-75 range, June CPI comes in below 4%, and Warsh can hold rates through September. The chip sector has also found its footing: three consecutive up days, ARM +9%, equipment names recovering, and SK Hynix 7x oversubscribed. The AI trade is not dead — it just needed a 15% correction to reset expectations. Q3 earnings will determine whether the reset is complete.

This briefing is for informational purposes only and does not constitute investment advice.