Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq record best quarter since 2020

In a nutshell:

• S&P 500 up 0.8%, Nasdaq up 1.5% and the Dow to a record close, capping Wall Street's best quarter since 2020

• Chip stocks led again, with the SOX closing out the quarter up 87.8%

• Yen slid to a 40-year low near 162 per dollar, reviving Japan intervention talk, while strong JOLTS data hardened Fed rate-hike bets

• Massive day for South32 after announcing plans to sell its aluminium value chain assets to Alcoa for up to US$5.6bn, as well as completing its CEO transition and approving upgrades for Sierra Gorda

Let's dive in.

• Major US benchmarks higher and finished near best levels in another chip and semis-led session

• Breadth was relatively poor, with the Equal-weight S&P 500 (-0.13%) underperforming the cap-weighted benchmark by 92 bps

• Defensive sectors like Healthcare, Staples, Utilities and Real Estate all down more than 1% 

• Chip stocks drove the advance once more, with SOX now up 87.8% in the June quarter, its best quarter since its 1993 debut

• US monthly recap: Russell 2000 (+3.60%), Dow (+2.52%), S&P 500 (-1.06%), Nasdaq (-2.81%)

  • Mag-7 were all lower with Microsoft (-17.2%), Amazon (-11.9%) and Meta (-10.9%) the worst performers  

• US quarterly recap: Nasdaq (+21.41%), Russell 2000 (+21.15%), S&P 500 (+14.87%), Dow (+12.90%)

• US dollar pushed higher across the board, sending the yen to a 40-year low near 162 per dollar and prompting fresh intervention warnings from Japan's finance ministry (BBG) 

• HSBC warned the dollar's rally could turn explosive if the Federal Reserve signals it is ready to tighten policy further (YF) 

• Elevated profit margins dampen show resilient corporate America, dampen concerns about elevated prices (WSJ)

• Mag-7 names have lost US$2.3tn in June, driven by structural rotation away from megacaps and concerns about AI heavy capex (FT)

• Rising valuations, trillion-dollar swings and sharp selloffs driving fears about a bubble, especially in AI and chip stocks (RT)

• China equities underperform vs. peers by most since 2001, dragged by Tencent, Alibaba despite China's AI advances (BBG)

• US envoy met Qatari mediators in Doha, with US and Iranian delegations holding indirect technical talks via Qatar and Pakistan and no direct meeting planned (CNN)

• Iran signalled it will not resume direct negotiations with the US until the existing memorandum is implemented, and reasserted its claim over Strait of Hormuz transit (CNN)

• Iran's deputy foreign minister warns country will press ahead with plans to control Strait of Hormuz, with or without Oman (BBG)

• Crude tanker traffic through the Strait of Hormuz resumes after Iran attacks, with about 24 ships transiting (BBG)

• Reopened Strait of Hormuz boosts Persian Gulf output, Asian refiners ship some UAE crude to California and Hawaii (BBG)

• Morgan Stanley cut oil forecasts as Hormuz flows rebound, sees strong US supply, weak China demand raising glut risk (BBG)

• Nike Q4 FY26 revenue down about 1% year-on-year to roughly $11bn,, shares down ~2% after hours (YF)

• CME Group will launch single-stock futures on 27 July across more than 50 names including Nvidia, Apple, Tesla and Micron (TK)

• China smartphone makers said to have cut 2026 shipment targets again, citing rising costs and component shortages (NK)

• Anthropic launches Claude Science to help accelerate pace of scientific discovery and development of healthcare interventions (AI)

• US retailers frontload Chinese holiday inventory to dodge likely tariff hikes, preserve supply (RT)

• EU and China set October deadline to reset trade ties and address large annual trade deficit (RT)

• EU will raise steel tariffs on trading partners, cutting duty-free quotas and doubling the rate to 50% (FT)

• ECB's Lagarde opened the Sintra forum by declaring monetary policy has returned to basics, with no further need for unconventional tools or complex forward guidance, and defended June's rate increase (CNBC)

• Fed Chair Kevin Warsh makes his first international remarks today on a Sintra policy panel alongside Lagarde, Bailey and Macklem, with markets parsing his tone for rate-hike signals (CNBC)

• China's central bank doubles overnight reverse repo liquidity injections to 600bn yuan, say sources (RT)

• US JOLTS job openings held near 7.6 million in May, well above the 7.3 million expected and a fresh two-year high, pointing to resilient labour demand (CNN)

• US Conference Board consumer confidence edged higher in June on lower gas prices, though the share saying jobs are hard to get rose to 22.5%, the most since January 2021 (CNN)

• China's official manufacturing PMI rose to 50.3 in June from 50.0, beating 50.1 expected, a third month of expansion led by high-tech and AI-linked exports while consumer goods and property lagged (CNBC)

• Domino's Pizza has its France and Belgium MFAs extended to 30-Sep amid the renewal process, which it expects to complete, noting it's well advanced with broad commercial alignment (DMP)

• Experience acquires West Beach Adventure in SA for $1.25m (~$450k pro-forma EBITDA) and secures a $4m Qld grant toward a new ~$10.6m reef vessel, Reef Magic IV, launching Dec-2027, for a net cost to EXP of ~$4.7m (EXP)

• Kore Potash confirms a new party approached it on 8-Jun to evaluate acquiring the whole company, with two parties now engaged in its formal sale process (KP2)

• Monadelphous Group awarded construction and maintenance contracts worth over $200m, including two with Fortescue (Nullagine wind turbine installation and a three-year Pilbara maintenance deal), multidisciplinary and temporary camp work for Santos in PNG, and a three-year O&M contract at Synergy's Muja Power Station in WA (MND)

• South32 to sell its aluminium value chain assets to Alcoa for an implied EV of up to US$5.6bn (~A$8.1bn), comprising US$3.1bn upfront cash, US$1.0bn in Alcoa shares, US$750m assumed net debt/leases and up to US$750m contingent on prices to 2030. Implies ~6.8x through-the-cycle EBITDA, with directors unanimously recommending in the absence of a superior proposal, and S32 will return ~$500m to holders via an in-specie franked special dividend of half the Alcoa shares post-completion (S32)

• South32 completes its CEO transition as Matt Daley commences as CEO and MD, with Graham Kerr stepping down on 30-Jun to continue as a strategic advisor on the Alcoa transaction (S32)

• South32's Sierra Gorda JV approves a fourth grinding line to lift processing capacity to ~60Mtpa from ~48Mtpa, with ~US$725m growth capex (100% basis) over FY27-30 and first production in mid-FY30 (S32)

• TerraCom expects FY26 coal sales of ~1.45Mt vs prior 1.52Mt, after deferring its final pre-30-Jun shipment to early July, pushing it into FY27 (TER)

• Data#3 downgraded to Equal-weight from Overweight; target up to $10.00 from $9.20 (Morgan Stanley)

• GrainCorp upgraded to Buy from Hold; target up to $5.90 from $5.20 (Bell Potter)

• Perpetual upgraded to Overweight from Neutral; target up to $19.50 from $18.00 (JPMorgan)

• Redox downgraded to Equal-weight from Overweight; but target up to $4.00 from $3.50 (Morgan Stanley)

Stocks trading ex-dividend: 

• Wed 1 Jul: Graincorp (GNC) – $0.14, Revolution Private Credit Income Trust (REV) – $0.013

• Thu 2 Jul: None

• Fri 3 Jul: None

Other ASX corporate actions today:       

• Dividends paid: ANZ Group (ANZ), Aristocrat Leisure (ALL)

• Earnings: Collins Foods (CKF)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 9:00 am: Australia Ai Group Industry Index

• 11:30 am: Australia Building Permits

• 11:45 am: China RatingDog Manufacturing PMI

• 7:00 pm: Eurozone Inflation

• 11:00 pm: Fed Chair Warsh speech

• 12:00 am: US ISM Manufacturing PMI