Morning Wrap: ASX 200 to fall, S&P 500 and Nasdaq lower as chip weakness offset healthcare gains

In a nutshell:

• Major US benchmarks lower but off worst levels, as chip stocks sold off for a second day but Staples, Healthcare and Real Estate sectors surged 

• A strong TSMC quarterly failed to lift semiconductors, with a lifted capital-spending outlook and AI-spend jitters dragging memory and equipment names lower

• The US-Iran war escalated further, a fifth straight night of US strikes near the Strait of Hormuz kept oil bid and Treasury yields firm

• South Korea issued a temporary ban on single-stock leveraged trading products, gold and copper prices tumbled overnight and Fed policymakers issued hawkish remarks 

Let's dive in.

• Major US benchmarks lower but off worst levels, with the Nasdaq off almost 1.5% but Dow buoyed by gains for Healthcare, Staples and Real Estate constituents

• Breadth was very strong, with eight sectors trading higher and the Equal-weight S&P 500 (+0.98%) closing at a fresh all-time high

• A solid TSMC outlook failed to inspire the sector, with the VanEck Semiconductor ETF down 3.7%

• Megacap tech mixed, with Broadcom (-5.0%), Alphabet (-4.4%), SpaceX (-3.0%) and Nvidia (-2.4%) lower, while Apple (+1.7%) and Microsoft (+1.3%) eked out a small gain

• South Korea to temporarily ban new listings of single-stock leveraged exchange-traded products until the market stabilises

• Memory names led the losses, Bond traders exit positions bought in anticipation of at least one Fed rate hike this year (BBG)

• SpaceX short sellers sitting on $8.7bn paper profit since June IPO (RT)

• SpaceX short interest rises to 29% of publicly tradeable float, up from ~5-7% three weeks ago (CNBC)

• TSMC Q2 net profit rose 77% and beat estimates, but US-listed shares fell about 2% after it lifted 2026 capex to US$60-64bn from US$52-56bn and pledged US$100bn more for Arizona (CNBC)

• UnitedHealth beat on Q2 revenue and profit and raised its 2026 earnings forecast, sending shares up about 7.8% and cushioning the Dow (RT)

• GE Aerospace posted adjusted EPS of US$2.02 vs. US$1.86 ests and raised guidance, yet shares fell about 4% (CNBC)

• Eli Lilly agreed to buy psychedelic drug developer AtaiBeckley for US$2.8bn, or US$6.75 a share in cash, a 26% premium, sending the target up 33% (CNBC)

• United Airlines topped earnings estimates but issued soft Q3 guidance of US$2.50 to US$3.50 a share against US$3.53 expected, and flagged US$6bn in added fuel costs, shares fell 1.7% (CNBC)

• Netflix reported Q2 revenue of US$12.56bn, just shy of the US$12.59bn ests, and EPS of US$0.80 vs. US$0.79 ests, with shares down ~8% after hours on soft Q3 guidance (TS)

• Apple preparing to introduce biggest overhaul to iPad mini in half a decade (BBG)

• Trump Media & Technology launching paid API feed for financial services companies (AX)

• US forces struck Iran for a fifth consecutive night, with CENTCOM saying the 2pm ET wave was aimed at further degrading Iranian military capabilities (TS)

• Senior Iranian military official called the Strait of Hormuz an unbreakable red line and warned Tehran would not allow any US interference in the waterway (CNN)

• Iran struck back at US military bases in Gulf countries as the two sides traded fire for a sixth day over control of the strait (NPR)

• Kuwaiti air defences intercepted Iranian drones, the army said, as the conflict spilled across the wider Gulf (ABC)

• Iran tells Yemen's Houthis to close the Red Sea oil route if the US strikes Iranian power infrastructure (RT)

• US diesel futures up 20% since beginning of last week on supply concerns (WSJ)

• Trump opened the door to buying foreign-built warships, naming Korean shipbuilders Hanwha, HD Hyundai and Samsung Heavy Industries as potential partners in rebuilding the US Navy (KH)

• Fed Logan urged "modestly" higher rates, saying current inflation remains too high to meet the Fed's 2% target (CNBC) 

• Fed Schmid said inflation remains too hot, noted breadth of inflation goes beyond energy and warned that despite better June data, it is insufficient to signal a lasting trend (BBG) 

• Bank of Korea raised rates by 25 bps to 2.75%, its first hike since January 2023, as domestic inflation creeps up (CNBC) 

• US June retail sales rose 0.2% month-on-month, below the 0.3% forecast and down from May's revised 1% gain, though the control group used for GDP rose a solid 0.5% (BBG)

• US 30-year mortgage rate rose to 6.55%, its highest in almost a year, on uncertainty over the Fed's next move, Freddie Mac said (BBG)

• REA Group to sell its Housing.com business to Aurum PropTech for ~$68m in Aurum scrip, lifting 78%-owned REA India's stake in Aurum to 24.9% from 5.5%. Completion expected end-Q1 FY27, subject to Aurum shareholder approval (REA)

• Alcoa reports Q2 EPS of US$2.12 ex-items, a 5.8% miss vs ests, with revenue US$3.97bn (-0.5%) and AEBITDA US$901m (-4.5%). Q2 alumina output fell 6% q/q to 2.2m tonnes on Pinjarra refinery instability, worsened by Cyclone Narelle gas disruptions. Cuts 2026 alumina production guidance 0.2-0.3m tonnes to 9.5-9.6m tonnes and shipments to 11.5-11.6m tonnes (AAI)

• Resources tumble: Just as miners stage a small bounce, they’re on the backfoot again. A sharp pullback for most commodities overnight, with notable declines for palladium (-4.7%), silver (-4.0%), gold (-2.1%) and copper (-1.4%). This drove an outsized decline for overnight miner-related ETFs, with VanEck Rare Earth/Strategic Metals down 4.4%, Global X Uranium ETF down 4.3%, VanEck Gold Miners ETF down 3.5% and Global X Copper Miners down 3.3%. NYSE-listed BHP and Rio Tinto shares fell 5.5% and 3.1% respectively.

• Woodside Energy upgraded to Outperform from Neutral; target up to $32.80 from $30.00 (Macquarie)

Stocks trading ex-dividend: 

• Fri 17 Jul: Wam Income Maximiser (WMX) – $0.006

• Mon 20 Jul: None

• Tue 21 Jul: None

• Wed 22 Jul: None

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: Lux Copper Corp (LUX), Powerhaus Uranium (POW)

• AGMs: None

Economic calendar (AEST):

• 10:30 pm: US Housing Permits, Building Starts

• 12:00 am: US Consumer Sentiment