Morning Wrap: ASX 200 to fall, Nasdaq slides on chip selloff, Oil prices spike as US-Iran conflict reignites

In a nutshell:

• Major US benchmarks fell, hit by several catalysts including further semiconductor weakness, re-escalation in the US-Iran conflict and rising bond yields

• Samsung posted a record quarterly profit but shares tumbled 6.9%, while a Reuters report that China's DeepSeek is building its own AI chip rattled chipmakers

• Oil spiked after Iran struck three tankers, prompting the US to launch fresh attacks in retaliation and revoke Iran's oil sale licence

Let's dive in.

• Major US benchmarks finished lower but off worst levels

• Dow up as much as 0.44% in early trade to what would have been a third straight all-time high, Equal-weight S&P 500 (-0.13%) outperformed the cap-weighted index by 32 bps

• Second straight day of semiconductor selling drove the losses, the VanEck Semiconductor ETF 3.7%, with Micron down 4.7%, AMD down 6.5% and Intel down 9.6%

• Mag-7 names held up relatively well, with Nvidia (+0.7%), Microsoft (+0.5%), Amazon (+0.7%) and Meta (+2.5%) closing in positive territory

• S&P 500 Healthcare sector up 1.55% to a fresh all-time high, Energy sector up 3.0% to the highest since 16-Jun but down 13% from 27-Mar high

• Brent up ~6% after Iran struck a tanker near the Strait of Hormuz and Washington revoked Iran's oil sale licence 

• US 10-year yield up 8 bps to 4.55%, the highest since 10-Jun, US 2-year yield up 7.5 bps to 4.18%, now trading at the upper bound of its recent trading range

• Samsung results trigger Asia tech stock rotation as investors lock chip gains into less-loved sectors (BBG)

• China assets diverges with global markets, offering diversification benefits for global investors (RT)

• US revoked the waiver allowing Iran to sell its oil after attacks on vessels near the Strait of Hormuz, with a US official calling the arrangement entirely performance-based (BBG)

• Iran struck the Qatari LNG tanker Al-Rekayyat near the Strait of Hormuz, with a second vessel reportedly hit by a projectile as the US-Iran interim truce frayed (CNBC)

• Third tanker hit in Strait of Hormuz, according to British military (APN)

• Iran tells UN maritime organisation parts of the Strait of Hormuz should be under its jurisdiction (BBG)

• Trump arrived at the NATO summit in Ankara, said he was very disappointed with the alliance, renewing pressure over member defence spending (CNBC)

• EIA sees global oil production and flows back at pre-war levels by the end of this year (BBG)

• Samsung Q2 2026 preliminary operating profit up 1,810% year-on-year to 89.4trn won (US$58bn), ~6% ahead of ests, revenue up 129% to 171trn won, shares closed nearly 7% lower on AI spending concerns (CNBC)

• China's DeepSeek is developing its own AI inference chip to cut reliance on Nvidia and Huawei, with the firm in early talks with design, foundry and memory partners (RT)

• Vertex Pharmaceuticals agreed to buy Crinetics for $85 a share, about $10bn, a 101% premium (YF)

• Rivian shares fell 18% after launching an underwritten public offering of up to 75m Class A shares to raise capital (CNBC)

• Amazon planning to raise at least $25bn in a bond sale, but says it won't issue any more debt this year (BBG)

• SK Hynix's Friday US listing said to be multiple times oversubscribed (BBG)

• Walmart announces lower prices across grocery, essentials and apparel, winning praise from Trump (RT)

• SpaceX joins Nasdaq 100, major brokers launch coverage, largely issuing buy ratings (BBG)

• Fed's Williams says he has grown less worried about inflation due to energy retreat (RT)

• BoJ's Asada said he must see signs of demand-driven inflation before supporting interest rate rises (RT)

• US May goods and services trade deficit widened to US$77.6bn from a revised US$54.6bn in April, the largest since March 2025, just under the US$78.08bn ests, as exports fell 3.2% and imports rose 3.3% (CNBC) 

• A very quiet morning so far for corporate updates

• Resmed to sell its MatrixCare software business to PE firm Frazier Healthcare Partners, with terms undisclosed. MatrixCare serves ~15,000 providers across skilled nursing, senior living and home health/hospice. Divestment aligns with the 2030 strategy to focus on sleep, breathing and connected home health. Expected to close Q1 FY27 (RMD)

• It's one of those days: Big outperformance for Energy and defensives (Healthcare, Real Estate, Staples and Utilities) on Wall Street. We'll likely see the same amid renewed upward pressure on bond yields and oil prices. On the flip side, a rough overnight lead for growth-and-resource related sectors. Most of the resource-related ETFs on our overnight watchlist including gold miners, uranium, copper miners and lithium/strategic metals fell 3-5%.

• Here's some perspective: The ASX 200 fell 9.0% between 27-Feb and 24-Mar. During this time, only 25 constituents finished higher, with coal, refiners and oil names up 20-47%. Insurers IAG and Suncorp also gained 10-11%, Coles up 5.3%, Telstra and TPG both gained 2% and that's the gist of it. Stocks and sectors that were hit the hardest over this time frame include gold, copper and uranium stocks, many of which fell 25-30%.

• Challenger downgraded to Neutral from Outperform; target up to $10.30 from $9.40 (Macquarie)

• Orora downgraded to Neutral from Outperform; target cut to $1.55 from $1.90 (Macquarie)

• Regis Healthcare initiated Neutral with $7.00 target (UBS)

Stocks trading ex-dividend: 

• Wed 8 Jul: A2 Milk (A2M) – $0.228

• Thu 9 Jul: Venus Metals (VMC) – $0.047

• Fri 10 Jul: Dominion Income Trust (DN1) – $0.598

Other ASX corporate actions today:       

• Dividends paid: Champion Iron (CIA) 

• Earnings: None

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

• AGMs: None

Economic calendar (AEST):

No major economic announcements.