This content was published on
July 2, 2026 - 02:07
5 minutes
(Bloomberg) — Asian stocks fell after a selloff in US chipmakers reignited concerns that the artificial intelligence-driven rally has outpaced fundamentals.South Korean stocks fell over 5%, pulling the broader MSCI Asia Pacific Index down 0.9%. US equity-index futures retreated 0.3%. The moves came after Wall Street benchmarks dropped on Wednesday and a gauge of semiconductor stocks sank 6.3%.Some relief for markets came as crude oil extended its decline. Brent fell 0.8% to trade at $71 a barrel, the lowest level since late February, when the US and Israel attacked Iran.Much of the market focus remains on Federal Reserve Chairman Kevin Warsh, who said price risks have come down in recent weeks, while repeating his determination to bring inflation back to the US central bank’s 2% target. Two-year Treasury yields steadied during early Asian trading. Gold held its gain from the previous session.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.While the selloff in semiconductor stocks continued to weigh on sentiment in the equities market, investors took some comfort from comments by Warsh and other central bankers suggesting inflation risks have become more balanced. Attention now shifts to the US jobs report on Thursday 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.Meanwhile, 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.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 0.2% as of 9:05 a.m. Tokyo time Hang Seng futures were unchanged Japan’s Topix was little changed Australia’s S&P/ASX 200 fell 0.7% Euro Stoxx 50 futures fell 0.6% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1380 The Japanese yen was little changed at 162.49 per dollar The offshore yuan was little changed at 6.7934 per dollar The Australian dollar fell 0.1% to $0.6886 CryptocurrenciesBitcoin fell 0.3% to $59,889.03 Ether fell 0.8% to $1,603.8 BondsThe yield on 10-year Treasuries was little changed at 4.47% Japan’s 10-year yield advanced one basis point to 2.715% Australia’s 10-year yield advanced one basis point to 4.80% CommoditiesWest Texas Intermediate crude fell 1.1% to $67.80 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
