Morning Wrap: ASX 200 to fall, Nasdaq dips as Micron tumbles 10%, Warsh sees inflation risks fading

In a nutshell:

• Wall Street began the third quarter mostly lower as a two-day technology rally faded, with the S&P 500 and Nasdaq slipping and the Dow roughly flat

• Fed Chair Warsh, in his first international appearance, called inflation too high and stressed independence, hardening bets on a possible September rate hike

• Meta soared 8.8% on plans to sell excess AI computing power, Eurozone inflation came in slightly cooler-than-expected, NYSE-listed Alcoa tumbles 8.9% on its South32 aluminium acquisition

Let's dive in.

• Major US benchmarks finished lower and off best levels, with the S&P 500 and Nasdaq snapping a two-day, tech-led bounce

• Technology led the pullback as chip stocks fell, Micron tumbled 10.5%, Intel dipped 9.0%, SpaceX down 7.8%, and Nvidia down 1.2%, unwinding part of the prior two sessions' relief rally

• Breadth was still solid, with the Dow flat, Equal-weight S&P 500 (+0.30%) closing at record highs and Financials (+2.1%) sector catching an aggressive bid

• Global equity fundraising hit $729.4bn in first half of 2026, boosted by SpaceX's IPO and record tech issuance (WSJ)

• Global deal value soars 30% year-on-year to $2.6tn in first half of 2026, with 38 deals valued over $10bn (BBG)

• Verbal warnings haven't stopped the yen's slide, intervention may have limited impact amid stronger dollar forces (RT)

• South Korean won falls to lowest since 2009, depreciation promoting foreign outflows from equities (BBG)

• Meta rallies 8.8%, its sharpest session this year, after Bloomberg reported it will build a cloud business selling excess AI compute, with Zuckerberg calling the move on the table (CNBC)

• AI-infrastructure and neocloud names slid on the read-through, with CoreWeave (-13.9%) and Nebius (-17.0%) among the fallers on fears a well-capitalised hyperscaler entering compute rental would pressure pure-play pricing (CNBC)

• Nike 4.9% as investors reacted to its cautious consumer outlook a day after quarterly results, weighing on the consumer discretionary sector (BBG)

• Kroger fell ~3% after agreeing to buy regional grocer Giant Eagle for 1.65 billion US dollars, its latest move to add scale against Walmart and Costco (TS)

• Trump said negotiators had made progress in indirect talks with Iran, focused on frozen assets and the Strait of Hormuz, with Iran again denying any direct negotiations with Washington (BBG)

• VP Vance said the US was in a strong position regardless of the outcome and warned any attack on Hormuz shipping would draw a US military response (AJ)

• Iranian crude exports surged past 40 million barrels since the US lifted its naval blockade, feeding supply-glut warnings even as Tehran presses to oversee traffic through the strait (CNBC)

• US declined to renew the USMCA in its current form at the July 1 review, Trade Representative Greer said, citing trade deficits and the agreement's shortcomings with Canada and Mexico (CNBC)

• Fed Chair Warsh, in his first international appearance, called inflation too high and pledged price stability, effectively ruling out the near-term cuts sought by Trump and stressing the Fed stays independent (CNBC)

• Warsh declined to signal the next move, saying he would not make a judgment now, consistent with his push to drop forward guidance, a stance Lagarde, Bailey and Macklem said they shared (CNN)

• Markets nudged up bets on a possible Fed rate hike as soon as September, which would lift the target from about 3.6% toward 3.9%, after inflation hit a three-year high in May (RT)

• Bank of England Bailey said UK inflation could climb toward 3.2% before easing, keeping the bank cautious, while noting energy prices are little changed from before the Iran war (CNBC)

• US June ADP private payrolls up 98,000 vs. 113,000 ests, job gains in all sectors except for mining (BBG)

• US ISM Manufacturing PMI eased to 53.3 in June from 54, a sixth straight month of factory expansion and a 20th month of overall economic growth, with new orders holding at 56

• Eurozone flash inflation cooled to 2.8% in June from 3.2% in May, below expectations as energy pressures faded, though services inflation stayed elevated

• China's RatingDog manufacturing PMI eased to 51.7 in June from 52.2, matching forecasts but signalling softer momentum, and the Australian dollar slipped below 0.6900 on the weaker China read

• 5E Advanced Materials signs a second boric acid IOI, with a US end-user eyeing 3,750–4,500 short tons pa from Fort Cady on a 5-year fixed, escalating deal, subject to a binding agreement; follows May's 10-year HoA (5EA)

• Iluka Resources signs an 18-year deal to buy 146kt of rare earths concentrate (86kt oxides) from VHM's Goschen deposit, plus first refusal on further output, backing it with a $40m convertible note ($10m upfront, $30m post-FID) (ILU)

• Infratil fields revised non-binding QScan bids from Bain and PEP (terms undisclosed) as InfraRed exits, per the AFR; the 59.5% owner values QScan at NZ$590m (~$486m) 100% (AFR)

• Kelsian Group wins Auckland Transport's Western ferry contract worth NZ$101m (~$83m) over 7 years from Jul-27, buys operator Belaire Ferries for NZ$8.9m (~$7.3m), and will fund five new vessels (~NZ$38m) via ringfenced financing (KLS)

• Lendlease completes its flagged ~$400m TRX sale to Valiram, booking ~$50m FY26 profit; exits the office tower and cuts its mall stake to 20% and management co to 51%, keeping the residential plots and hotel (LLC)

• Northern Star Resources reports preliminary FY gold sold of 1,543koz, beating >1,500koz guidance, with all three hubs ahead; KCGM mill expansion on schedule (NST)

• Perpetual rejects a non-binding, highly conditional $21.64/sh cash proposal from EQT-controlled Windflower as below fair value (PPT)

• Smart Parking acquires American Parking for $12m ($11m cash, $1m scrip); EPS accretive pre-synergies, with the target posting $8m revenue and $1.4m EBITDA in 2025 (SPZ)

• Monadelphous downgraded to Hold from Buy; target cut to $32 from $37 (Bell Potter)

• Wesfarmers downgraded to Sell from Neutral; but target up to $78 from $76 (Goldman Sachs)

Stocks trading ex-dividend: 

• Thu 2 Jul: None

• Fri 3 Jul: Clime Investment Management (CIW) – $0.003, KKR Credit Income Fund (KKC) – $0.017

• Mon 6 Jul: None

• Tue 7  Jul: None

• Wed 8 Jul: A2 Milk (A2M) – $0.228

Other ASX corporate actions today:       

• Dividends paid: Dyno Nobel (DNL), Macquarie Group (MQG), National Australia Bank (NAB)

• Earnings: Collins Foods (CKF)

• IPOs: AI Opportunities Trust (AIX) at 11:00 am AEST

• AGMs: None

Economic calendar (AEST):

• 11:30 am: Australia Balance of Trade 

• 10:30 pm: US Nonfarm Payrolls