Morning Wrap: ASX 200 to rise, S&P 500 flat but Nasdaq slips, US pauses strikes on Iran

In a nutshell:

• Wall Street closed a jittery week mixed, a heavy chipmaker selloff offsetting solid earnings, ahead of Wednesday's FOMC decision and results from Microsoft, Meta, Apple and Amazon

• US and Iran paused strikes for a second straight day and Tehran reported progress in Oman-brokered talks on Strait of Hormuz shipping, the first genuine de-escalation signal in two weeks

• Houthi missiles and drones struck Saudi Aramco facilities at Jizan and Yanbu on Saturday, opening a second energy front

Let's dive in.

• Major US benchmarks mixed and gave back early gains

• S&P 500 (+0.05%) up as much as 0.71% in early trade, Nasdaq hit a session high of 0.34% but tumbled into the close

• Breadth was very strong, with only Tech (-0.88%) lower and the Equal-weight S&P 500 (+0.78%) outperforming the cap-weighted index by 73 bps

• US weekly recap: Dow (-0.38%), S&P 500 (-0.61%), Russell 2000 (-1.09%), Nasdaq (-2.13%)

• US 10-year yield slightly eased to 4.68% on Friday after touching 4.7% on Thursday, its highest since Jan-25, with the 2-year at 4.33%

• Moody's said unprecedented AI spending threatens credit quality at Microsoft, Amazon, Alphabet, Meta, Oracle and CoreWeave, projecting group capex of $785bn in 2026 and about $1tn in 2027 (CNBC) 

• Investors contended with US$100 Brent, a rebuilt tariff wall, climbing long-dated Treasury yields and AI capex angst all in one week (BBG) 

• CME Group launches single-stock futures to attract retail traders and simplify leveraged equity bets (BBG)

• Mag-7 lost ~$797bn in market value as AI spending doubts and macro uncertainty hit tech (BBG)

• South Korea raising minimum cash deposits for leveraged ETFs to curb extreme volatility (BBG)

• Hedge funds grew fastest in history as AI-driven market rally boosts inflows and lifts assets by over $400bn (FT)

• US announced no new strikes on Iran for the first time in two weeks on Saturday, and Tehran said it had also paused, after 13 consecutive nights of American attacks (CNN)

• Iranian and Oman foreign ministers held two days of talks in Tehran on managing safe passage through the Strait of Hormuz, with Tehran reporting constructive progress on Sunday (CNN)

• Trump said on Friday he believes Iran is getting more serious but is not ready to make a deal, after meeting advisers about a possible escalation (CNN)

• Netanyahu will meet Trump at the White House on Tuesday, his seventh Oval Office visit, with the timing suggesting no major escalation before then (AX)

• Houthi forces claimed missile and drone strikes on Saudi Aramco facilities at Jizan and Yanbu on Saturday, the first direct attack on Saudi oil infrastructure since 2022 (AJ)

• China boosts green energy financing to record $20.1bn as Iran war drives demand for renewables (FT)

• Intel Q2 FY26 revenue up 25% to $16.1bn, ~12% ahead of ests, EPS $0.42 vs. $0.21 ests, its fastest revenue growth since 2011, shares tumbled 7.8% as 2026 capex lifted to more than $20bn (CNBC)

• Samsung and SK Hynix agreed US memory supply partnerships worth a combined $950bn on Saturday, SK Hynix supplying $750bn including to Nvidia and Samsung $200bn to Broadcom (YF)

• SAP Q2 revenue up 9% to €9.88bn, marginally under €9.91bn consensus, current cloud backlog up 27% to €22.9bn, FY26 non-IFRS operating profit midpoint cut by €100m, shares up 9.2% (CNBC)

• Alphabet shares down 8.1% for the week after lifting 2026 capex guidance to as much as $205bn and posting its first negative quarterly free cash flow since the 2004 IPO (BBG)

• American Express fell 4.3%, the worst Dow performer, with Q2 revenue up 10% to $19.64bn vs. $19.69bn consensus (TE)

• Tesla fell a further 2.0% on Friday, taking its weekly decline to nearly 17.8% after a results-driven earlier 14.5% slide on higher AI spending plans (CNBC)

• US Section 301 tariffs of 10-12.5% took effect at 12:01 am ET Friday on 60 trading partners covering 99.4% of American imports, replacing the expiring temporary 10% global levy (CNBC)

• Australia was hit with the 12.5% rate, the same band as China, Brazil, Japan, Russia and Singapore, after USTR found it had not effectively enforced a forced-labour import ban (BBG)

• Albanese said on Sunday he would absolutely raise the levies directly with President Trump, describing them as unjustified (BBG)

• Brazil called the tariffs arbitrary and unjustified, with the new duty stacking on a separate 25% Section 301 levy to rebuild a 37.5% barrier (CNBC)

• Chile said the measure was inconsistent with its labour standards and the technical, political and legal evidence it submitted through the USTR investigation (CNBC)

• Markets price at least two more ECB hikes with the first fully priced by October and the second by February, while Reuters-polled economists see only one September move (RTE) 

• ECB President Lagarde said July's hold at a 2.25% deposit rate was unanimous, though some governors asked whether a hike should have been considered (BBG) 

• US flash composite PMI rose to 53.6 in July, an eight-month high, with manufacturing at 53.8, a three-month low, and services above 53 (SPG)

• US new home sales rose 1.6% month-on-month in June to a 628,000 annualised rate, above the 610,000 consensus, but fell 5.6% year-on-year (TE)

• Eurozone composite PMI jumped to 51.9 in July from 50.0, far above the 50.3 consensus, the first expansion in four months and highest in five (SPG)

• German private sector activity grew for the first time in four months in July, with eurozone manufacturing output rising at its fastest pace since March 2022 (SPG)

• UK composite PMI rose to 52.1 in July from 49.3, well above the 49.7 consensus, with services at 51.8 and manufacturing at 52.8 (SPG)

• UK retail sales volumes rose 1.0% month-on-month in June against expectations of a 0.3% decline, the fifth upside surprise this year (BBG)

• Capricorn Metals updated Mount Gibson PFS lifts reserves 34% to 3.67Moz including a maiden 365koz underground reserve, with steady-state output of 260koz pa from year three over 19 years. LOM AISC $1,870/oz, pre-tax NPV7.5 $6.1bn, 14-month payback (CMM)

• Emeco in discussions to acquire National Group, with price chatter ranging from ~$500m to considerably lower. Emeco did not deny the talks (The Aus)

• Lynas Rare Earths signs binding cross-subscription of ~$29m convertible instruments each with LS Eco Energy at 0% interest and 5-year maturity, convertible after three years. Follows March framework agreement for a Vietnamese metal-making facility (LYC)

• Pengana International Equities accused by Pengana Capital of failing to disclose conflicts involving director Geoff Wilson, with legal action threatened if today's equal-access buyback motion passes (AFR)

• Talga Group signs non-binding LOI with Japan's Hanwa for potential Talnode graphite anode offtake plus a possible project-level investment in the Vittangi Anode Project. Definitive agreements targeted Q4 2026 (TLG)

• Zenith Minerals 11.1% holder Ida Metal calls Forrestania Resources' acceptance claims misleading, arguing 22m of 39m director-held shares only vest on change of control, so the bid can't reach 50.1% (AFR)

• Mirvac upgraded to overweight from neutral; target increased to $2.30 from $2.20 (JPMorgan)

• Storage King Group upgraded to overweight from neutral; target remains $1.60 (JPMorgan)

• Scentre Group downgraded to neutral from overweight; target increased to $4.20 from $4.10 (JPMorgan)

• Vicinity Centres downgraded to underweight from neutral; target cut to $2.50 from $2.55 (JPMorgan)

Stocks trading ex-dividend: 

• Mon 27 Jul: Alternative Investment Trust (AIQ) – $0.036

• Tue 28 Jul: None

• Wed 29 Jul: None

• Thu 30 Jul: Mirrabooka Investments (MIR) – $0.095

• Fri 31 Jul: Pengana International Equities (PIA) – $0.125 

Other ASX corporate actions today:       

• Dividends paid: 360 Capital REIT (TOT)

• Earnings: Korvest (KOV)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.