This content was published on
July 2, 2026 - 00:05
5 minutes
(Bloomberg) — Stocks in Asia were set to fall on Thursday as a selloff in US chipmakers weighed on sentiment and investors assessed fresh remarks from Federal Reserve Chairman Kevin Warsh.Equity-index futures for Australia, Japan and South Korea pointed to declines at the open after US stocks retreated overnight. The S&P 500 slipped 0.2%, while the technology-heavy Nasdaq 100 fell 1.5%. A gauge of semiconductor stocks sank 6.3%. Two-year Treasury yields edged lower and oil prices retreated after the US said indirect talks with Iran had been constructive.Speaking at the European Central Bank’s annual forum in Sintra, Portugal, Warsh said inflation expectations had moderated over the past month. He also reiterated the Fed’s commitment to restoring price stability, reinforcing expectations policymakers are in no rush to raise interest rates.The selloff underscored growing scrutiny of the AI-driven rally that has powered global equities, with investors questioning whether heavy spending on artificial intelligence will generate sufficient returns. Investors will now focus on upcoming US economic data and Fed speakers for fresh signals on the policy outlook after Warsh’s remarks damped expectations of a July rate increase.“At a minimum, his comments provided no fuel for speculation on a near-term July rate hike, and in our view suggest the new Fed chair – while keeping all options open meeting by meeting – does not currently see cause for an immediate hike,” said Krishna Guha at Evercore.US manufacturing expanded for a sixth straight month in June as the war-driven surge in input costs eased, adding to signs the economy remains resilient. Printing, electrical equipment and textiles led gains, while paper products, furniture and wood products contracted.“Overall, the report points to continued resilience in the manufacturing sector and supports our view that the US economy is reaccelerating, with growth remaining on track to reach approximately 2.4% this year,” said Eugenio Aleman, chief economist at Raymond James.Attention now turns to Thursday’s US employment report for fresh clues on the economy, though its impact on monetary policy may be limited. Warsh has made inflation the Fed’s primary focus, meaning June payrolls are “unlikely to shift interest rate expectations on their own,” said Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management. Hiring tied to the FIFA World Cup is also expected to distort the data.Elsewhere, US negotiators Steve Witkoff and Jared Kushner held positive discussions in Qatar and progress is being made on technical talks with Iran, according to a senior administration official, as the countries seek to turn an interim peace deal into a permanent end to the war.Working groups have been formed by Tehran to discuss the implementation of the current agreement and negotiate a final peace deal, though no talks have taken place yet, the state-run Islamic Republic News Agency reported, citing Deputy Foreign Minister Kazem Gharibabadi.“We are on the optimistic front on geopolitics,” said Mohit Kumar of Jefferies. “It is not that we feel that we will have a comprehensive deal. It’s likely to be more of a fudge. But as long as the Strait remains open and oil keeps flowing, market is likely to get de-sensitized around geopolitics.”Corporate Highlights:Apple Inc. is in negotiations to purchase chips from two Chinese semiconductor makers on a Pentagon blacklist to help reduce the impact of a global memory shortage that’s forced the company to raise prices across its product line. Meta Platforms Inc. is developing plans for a cloud infrastructure business that will sell access to AI computing power and models, setting up a new vector of competition with industry leaders like Amazon Web Services, Microsoft Azure and Google Cloud. Alphabet Inc.’s Google was ordered to pay almost $2 billion to Klarna Group Plc’s Pricerunner unit in a dispute over the search-engine giant’s abuse of power in the market for comparison shopping services. Some of the main moves in markets:StocksS&P 500 futures fell 0.1% as of 7:04 a.m. Tokyo time Hang Seng futures were unchanged S&P/ASX 200 futures fell 0.3% CurrenciesThe Bloomberg Dollar Spot Index rose 0.2% The euro was little changed at $1.1378 The Japanese yen was little changed at 162.57 per dollar The offshore yuan was little changed at 6.7943 per dollar The Australian dollar was unchanged at $0.6893 CryptocurrenciesBitcoin rose 1.1% to $60,750.05 Ether rose 0.7% to $1,628.32 CommoditiesWest Texas Intermediate crude fell 0.7% to $68.13 a barrel Spot gold rose 0.2% to $4,037.39 an ounce This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
