Morning Wrap: ASX 200 futures flat, S&P 500 and Nasdaq higher as chip stocks climb

In a nutshell:

• US benchmarks finished higher despite relatively weak breadth, where defensives (Healthcare, Utilities, Staples and Real Estate) lagged

• Chips and AI led, Broadcom extending its Apple chip deal to 2031, TeraWulf landing a $19bn Anthropic lease and SK Hynix launching a large US listing

• Microsoft is planning to cut 4,800 jobs, A2 Milk upgraded its FY26 earnings guidance, coffee prices surged 15% overnight and Neu Horizon Uranium is set to debut at 12:00 pm

Let's dive in.

• Major US benchmarks finished higher and near best levels, with the Dow closing above 53,000 for the first time on record 

• Breadth was relatively weak, with six sectors trading lower and the Equal-weight S&P 500 (+0.04%) underperforming the cap-weighted benchmark by 68 bps

• Oppenheimer's John Stoltzfus told clients equities still have second-half upside if US fundamentals hold, while cautioning that periods of volatility will punctuate the advance (CNBC) 

• Morgan Stanley's Wilson says US stocks may struggle to hit new highs as investors rotate from chips toward laggard hyperscalers (BBG)

• Morgan Stanley lifted price targets on Lam Research, Applied Materials and KLA, helping chip-equipment names lead as investors rotated back into semiconductors (CNBC) 

• Markets Pulse survey shows growing doubts about AI rally push investors toward traditional stocks, with 53% planning to buy (BBG)

• Treasury's US$119bn auction week tests demand for 10-and-30-year Treasuries, starting Wednesday with 3-year notes (BBG)

• Blackrock, Vanguard emerging-market ETFs see record performance gap over South Korea index split (BBG)

• Broadcom up 3.7% after agreeing to extend its custom-chip supply partnership with Apple through 2031, reinforcing its role in the AI silicon buildout (CNBC)

• TeraWulf signed a 20-year lease with Anthropic for a 400 megawatt Kentucky data centre, expected to generate about $19bn, and shares jumped in the session (CNBC)

• Microsoft said it would cut about 4,800 jobs, roughly 2.1% of staff, including 1,600 Xbox roles, and spin off four gaming studios (CNBC)

• Dell rose 4.4% after President Trump promoted its computers from the White House while ringing the market's opening bell from the Oval Office (CNBC)

• SK Hynix's US$29bn Nasdaq listing aims to boost its valuation and investor access for AI memory cycle (BBG)

• Samsung Electronics likely to deliver ~18-fold jump in Q2 operating profit on AI-driven memory squeeze (BBG)

• Lululemon faces slowing sales in China, even as it uses strength in the market to offset other issues (FT)

• Klarna applies for US bank charter as it pushes to expand beyond 'buy now, pay later" (CNBC)

• NATO leaders are set to declare at their Ankara summit that Iran must never obtain a nuclear weapon and must respect freedom of navigation in the Strait of Hormuz, per draft language seen by Reuters (RT)

• Oil and gas shipping in Hormuz via Oman-side recovering after recent escalations, mines and Iran threat risks (BBG)

• Sudden oil glut could weaken Iran's leverage in talks with the US by making crude cheaper and more plentiful (WSJ)

• Retail traders flooding oil markets as CME launches a new 10-barrel crude contract after Iran war sparks betting (FT)

• China purchases 26m barrels of oil from Middle East producers for July and August delivery, receives deep discounts from Saudi Arabia (FT)

• ECB's Schnabel says European economy not back to pre-war state despite falling oil prices, says price pressures continue (RT)

• Fed Waller said he believes forward guidance can be a valuable tool if used carefully, helping guide the public on the future path of interest rates (BBG) 

• US ISM Services PMI eased to 54.0 in June from 54.5, matching forecasts, as activity and new orders slowed while employment jumped to 51.2 and prices cooled to a four-month low of 67.7 (BBG)

• China's Q2 growth expected to slow on weak domestic demand, property slump and energy shocks (NK)

• German factory orders rose 1.9% month-on-month in May, beating the 1.2% expected and partly reversing April's 3.2% decline (BBG)

• a2 Milk guides FY NPAT slightly up y/y at $202.9m, ~1.5% ahead of $199.9m ests and above prior similar-to-down guidance. Revenue ~$1.97b broadly in line, EBITDA margin at the high end of 14.0-14.5%, cash conversion ~70% (vs 50% prior). China label IMF sales down ~14% on supply chain issues, other categories up strongly (A2M)

• Lynas Rare Earths signs long-term partnership with JS Link to develop a 3,000tpa NdFeB sintered magnet factory in Malaysia. Lynas to invest ~$50m in JS Link equity to fund construction and will exclusively supply rare earth materials to JS Link's Yesan (South Korea) and planned Malaysian factories at commercial prices until Jan-2038 (LYC)

• West African Resources reports Q2 group gold production of 125,179oz and sales of 110,737oz at a realised US$4,556/oz from Sanbrado and Kiaka in Burkina Faso. On track for 2026 guidance of 430,000-490,000oz (WAF)

• Agriculture: A little unrelated to local equities, but a massive overnight session for soft commodities, most of which are coming off a steep Hormuz reopening pullback. Coffee up 15.2%, corn up 4.1%, wheat up 2.5% and sugar up 2.4%. This is perhaps why we saw a few agri-related names like Nufarm (+4.6%), Elders (+0.9%) and Select Harvests (+7.6%) catch a bid on Monday.

• Not a whole lot: Everything is kind of settling after recent pullbacks. Copper is down around 7% from its all-time high of US$6.7/lb, having fallen as much as 11%. The Aussie 10-year yield slid from 5.1% to a four-month low of 4.71% in late June and is now bouncing back to 4.80%. Overall, conditions remain choppy at best and the local market is lacking fresh leadership, aside from the recent resurgence in healthcare and a handful of discretionary stocks.

• Bluescope initiated Buy with $37.70 target (Goldman Sachs)

• Deterra Royalties downgraded to Neutral from Outperform; target unchanged at $4.70 (Macquarie)

• Evolution Mining downgraded to Neutral from Outperform; target cut to $12 from $13 (Macquarie)

Stocks trading ex-dividend: 

• Tue 7  Jul: Katana Capital (KAT) – $0.005

• Wed 8 Jul: A2 Milk (A2M) – $0.228

• Thu 9 Jul: None

• Fri 10 Jul: None

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: Neu Horizon Uranium (NHU) at 12:00 pm 

• AGMs: None

Economic calendar (AEST):

No major economic announcements.