Morning Wrap: ASX 200 to rise, S&P 500 edges up, Nasdaq slips on chip rout

In a nutshell:

• Major US benchmarks mostly higher, with a clear rotation into defensive and value-oriented pockets of the market

• Healthcare (+2.3%), Staples (+1.96%), Materials (+1.66%) and Communications (+1.64%) sectors rallied on Wall Street, as lower oil and yields broaden market gains 

• The AI trade cracked in Asia. Korea's KOSPI triggered its eighth circuit breaker of the year and Samsung posted its worst day in almost two decades, as circular-financing worries collided with fresh evidence of Chinese progress in chipmaking equipment

• Brent capped its worst three-day run since 2020 as Iran opened Strait of Hormuz talks with Saudi Arabia and Oman

Let's dive in.

• Major US benchmarks mostly higher and near best levels

• Rotation into defensives and value, with the Dow (+1.03%) now on a three-day win streak and Equal-weight S&P 500 (+1.17%) soaring to fresh all-time highs

• Nasdaq slipped to a near-three month low, down 8.1% from its 2-Jun record high

• SOX Semiconductor Index (-4.5%) now down 24.5% from its 22-Jun record high amid deleveraging, China competition in DUV and memory, circular financing concerns and widening hyperscaler credit spreads

• KOSPI down 10.8% after a Level 1 circuit breaker halted all trading for 20 minutes, the market's eighth such halt of 2026 

• Credit markets showing heightened concerns about AI capex boom (FT)

• South Korea flags additional measures to crack down on single stock leveraged ETFs (RT)

• JPMorgan sees equities supported by lower yields and dollar, strong earnings and reduced Middle East hostilities (BBG)

• Apple briefly hit US$5 trillion market cap for the first time, surpassing Nvidia as the most valuable listed company (CNBC)

• Apple launched a US iPhone leasing program called Upgrade with Klarna from $17.99 a month, after lifting starting iPad and Mac prices by at least $100 citing a global memory crunch (F)

• Coca-Cola CEO said consumers face inflationary pressure and are re-evaluating what they put in the basket, though volumes still grew 3% in North America, contradicting PepsiCo's earlier tighter-budget read. Raised full-year comparable EPS growth guidance to 9-10% from 8-9%, shares up 5% to all-time highs (CNBC) 

• Visa said consumer and business spending remains resilient as net revenue rose 14% and cross-border volume 13% (BBG)

• Ford CEO Jim Farley said the bigger story than the beat and raise is growing evidence Ford is becoming more profitable and disciplined. Cut Model e electric vehicle losses to about $4bn and lifted full-year guidance, shares up more than 4% after hours (CNBC) 

• PayPal CEO Enrique Lores, in his first comment since the Stripe and Advent $53bn approach, said the board weighs opportunities objectively but the focus is executing the plan. Q2 EPS beat ests by 8%, raised full-year guidance, shares up 4.0% (YF)

• Mercedes-Benz CEO said the company must work flat out on costs to stay competitive on price and that Chinese rivals targeting volume markets is no reason to relax. Cut full-year car sales guidance on a 30% drop in China deliveries, shares up as much as 5.9% (YF)

• Samsung Electronics closed 13.4% lower in Seoul, its worst one-day fall in almost two decades, while SK Hynix dropped 14.7%, with the pair accounting for nearly half the KOSPI (YF)

• ASML has shed ~10% over two sessions, wiping more than €60bn off its value, after Reuters named Shanghai Aishengna as leading China's push into immersion DUV lithography tools (RT)

• US-Iran mediators believe breakthrough for deal is close as Netanyahu holds talks with Trump at White House (TI)

• Iran officials deny reaching a ceasefire with the US, asserting they remain in a position of strength (NYT)

• Iran's military command said any country or company using frozen Iranian assets would be barred from transiting the Strait of Hormuz (AP)

• Trump said new US tariffs are functionally the same as those the Supreme Court struck down, telling Fox News it was a shame he had to take a harder route after the ruling (CNBC)

• US Congress is debating the MATCH Act to block China buying or servicing the immersion DUV machines a Chinese state-backed consortium is now targeting, potentially weakening export controls (RT)

• Fed funds futures price about 35% odds of a 25 basis point hike at Wednesday's FOMC decision, while a Reuters poll of 104 economists unanimously expects a hold at 3.50% to 3.75% 

• Odds of a September Fed hike have climbed to about 82%, making Chair Kevin Warsh's press conference the key repricing event given he has abandoned forward guidance 

• RBA Governor Bullock says board prepared to hike cash rate further if needed amid elevated underlying inflation (BBG)

• BOJ might signal more hawkish communication as economy faces growing inflationary pressure (RT)

• US July consumer confidence slips to 90.8 vs. 92.3 ests and 92.2 prior, sentiment remains pessimistic, though concerns over inflation, oil and geopolitics eased (RT)

• South Korea consumer confidence rose for third month in July, helped by AI chip-boom optimism and wage expectations (BBG)

• Adore Beauty Group CFO Marcus Crowe resigns for personal reasons, staying on for a transition period. Kylie Archer appointed Interim CFO on a contract basis, effective immediately (ABY)

• BHP Group has no intention of selling its BMA metallurgical coal sites, with CEO Brandon Craig telling staff he would instead review the assets for improvement opportunities. Whitehaven Coal seen as a potential buyer for some assets (The Aus)

• Rio Tinto delivers 1H underlying EBITDA of US$14.8bn, up 28%, and free cash flow of US$3.8bn, up 75%, on +3% CuEq production growth. Net profit US$6.7bn, up 47%. Declares interim dividend of US$3.4bn, up 43%, at a 50% payout. Banked US$870m in productivity benefits, targeting US$1.8bn annualised run-rate by year-end (RIO)

• Vault Minerals posts Q4 production of 89,338oz at AISC of $2,968/oz, for FY26 output of 336,540oz. Q4 free cash flow of $219m, closing FY26 with $842m cash and bullion. FY27 guidance of 355-375koz at AISC $3,150-3,350/oz, growing to 380-400koz in FY28 (VAU)

• West African Resources posts record Q2 gold production of 125,179oz at AISC of US$1,730/oz, with sales of 110,737oz at a realised US$4,556/oz. Q2 operating cash flow of A$249m, closing with A$876m cash plus ~A$247m unsold bullion. YTD production 232,905oz at AISC US$1,823/oz, on track for FY guidance of 430-490koz at AISC under US$1,900/oz (WAF)

• Broadening out trade: A clear rotation is underway, from AI/semis into consumer-facing pockets of the market like Staples, Retail and Healthcare. The ASX rallied on Tuesday after what the market read as a slightly dovish speech from RBA governor Bullock, sending Discretionary (+2.6%), Telcos (+2.5%), Healthcare (+2.2%) and Staples (+1.3%) sharply higher. Resources went the other way as commodity prices traded mostly lower overnight, with ETFs for Rare Earths/Strategic Metals (-3.8%), Uranium (-3.4%), Silver Miners (-2.3%), Gold Miners (-2.0%) and Copper Miners (-1.7%) all finishing in the red. WTI is up 4.4% this morning after shedding ~14% over the last three sessions, so oil price volatility may weigh on broader markets.

Broker data is currently pending, check out the Evening Wrap for a full breakdown of today's analyst updates.

Stocks trading ex-dividend: 

• Wed 29 Jul: None

• Thu 30 Jul: 360 Capital Mortgage REIT (TCF) – $0.05, Gryphon Capital Income Trust (GCI) – $0.014, KKR Credit Income (KKC) – $0.017, Mirrabooka Investments (MIR) – $0.095, Perpetual Credit Income Trust (PCI) – $0.006

• Fri 31 Jul: Metrics Master Income Trust (MXT) – $0.014, Metrics Income Opportunities Trust (MOT) – $0.011, Metrics Real Estate Multi-Strategy Fund (MRE) – $0.009, Pengana International Equities (PIA) – $0.125 

Other ASX corporate actions today:       

• Dividends paid: Turners Automotive Group (TRA) 

• Earnings: None

• IPOs: None

• AGMs: None 

Economic calendar (AEST):

• 11:30 am: Australia Inflation

• 4:00 am: Fed Interest Rate Decision (Ests: Hold at 3.75%)