Investors Scoop Up Chipmakers After Fourth of July Weekend: July 6, 2026

Investors are embracing risk following the extended holiday weekend and are scooping up chipmaker names amidst a broad Wall Street rally. Tech and semis are leading as the majority of sectors advance after the Dow Jones Industrial Average reached another fresh record. Sentiment is additionally benefitting from the official launch of Trump accounts, the announcement of Apple and Broadcom expanding their hardware partnership and the release of an in-line ISM-services print that signaled strong economic growth and an increase in hiring. The offensive mood on the trading floor has participants unloading shares in the defensive consumer staples, health care, utilities and real estate categories, however, as those segments retreat by more than 1% each. Meanwhile, the robust ISM data is lifting the greenback while yields are unchanged, with the report pointing to ongoing transaction momentum and accelerating payroll gains alongside slower price pressures. The cyclical buoyancy mixed with decelerating inflation is driving an appreciating dollar on firmer GDP projections while sustaining flat rate-hike expectations on reduced cost force estimates. Elsewhere, commodities ex-lumber are climbing, volatility protection instruments are reflecting calm.

Services Sectors Expand at Slower Pace

The services sectors expanded at a slightly slower pace last month, but results continued to signal strong economic conditions. The Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) posted a strong June headline number of 54, in-line with expectations and only modestly lighter than May’s 54.5. The deceleration was driven by weaker business activity and orders, which declined from 57.7 and 57.3 to 55.4 and 55.1. Meanwhile, faster hiring, improving exports and growing backlogs helped sustain robust performance, as employment turned from a contractionary reading below 50 of 47.9 to an expansionary level of 51.2, international shipments rose from a natural 50 to 50.4 and unfilled transactions climbed from 51.3 to 54.9. Additionally, prices cooled from 71.3 to 67.7 as quelled fuel-cost concerns were countered by tariff worries.

Past performance is not indicative of future results.

AI Commentary, Samsung Earnings to Move Markets

A light data week featuring only lower-impact economic numbers has investors looking to the tech sector for clues concerning which inning of the AI expansion we’re in. Tomorrow’s preliminary earnings report from Samsung is poised to inform market participants of the ongoing appetite for memory chips, which have grown incredibly costly as a result of booming enthusiasm for infrastructure investments. Growing evidence that price-insensitive customers are racing to complete their buildouts would help extend the rally by supporting the belief that financial return prospects are likely to be appealing. Conversely, developments pointing to a greater prevalence of firms waiting for integral semiconductor inputs to become cheaper would raise worries that profit margins, free cash flows and debt loads are under heavier pressure from the substantial capital-intensity associated with these technological initiatives.

International Roundup

Annualized Gate Price Pressure Intensifies in Europe

Gate prices in the euro area as measured by the Industrial Producer Price Index moderated on a monthly basis in May but the annualized 5.9% inflation pace accelerated from 5% in the preceding month and was the highest rate since the spring of 2023, according to Eurostat. While the monthly rate slowed from April’s 0.7% print and matched the economist consensus, the year-over-year (y/y) headline was hotter than the expected 5.7% gain and up considerably from the preceding period’s 5% print.  The hotter-than-expected read was driven by energy, which was up 14%. Indeed, the PPI ex energy was only 2.8% higher y/y. In addition, the following categories and the extent of their changes contributed to the y/y increase for the euro area, which consists of the 21 countries that use the euro:

• Intermediate goods, 5.5%
• Durable consumer goods, 2.8%
• Capital goods, 2.2%

Among broad categories, the non-durable goods group was the only one to decline with a 0.5% y/y drop.

For the monthly index, a 1% slip in energy prices helped tame the overall result. Intermediate goods and durable goods, however, experienced the largest increases of 1.4% and 0.3%.

And Retail Sales Growth Accelerates

Euro area sales volume climbed 0.2% month over month (m/m) and 1.6% y/y in May after declining 0.3% m/m and growing 0.9% y/y in the preceding month. The monthly metric matched the economist consensus estimate while the annual jump was sightly hotter than the anticipated 1.5% result. Sales of automotive fuel reversed the negative m/m trend. In April, consumers reduced the volume of gasoline purchased by 3.6% m/m in response to higher prices resulting from the US-Iran war. In May, however, the volume was down only 0.5%. Meanwhile, the food, drinks, tobacco category and the non-food products except automotive fuel experienced increases of 0.6% and 0.1%.

Hong Kong Manufacturing Growth Picks Up

Conditions for manufacturers in Hong Kong improved in June amidst increased output and growing new orders, causing the S&P Global Hong Kong SAR PMI to move from 50.4 in May to 52, easily exceeding the neutral level of 50.

June was the second consecutive month of increasing new orders driven by new production introductions and climbing customer demand with the World Cup causing clients to increase their spending. The growth in requests from clients occurred both in Mainland China and international markets. Also in June, outstanding work orders increased for the first time in four months, which points to capacity strain. In other areas, businesses reported that input inflation eased to a three-month low but despite the change, price pressures were still elevated. Output prices climbed, helping manufacturers to partially pass on the higher expenses to customers. Even with a strong month for new orders, manufacturers’ outlook, while easing somewhat, was still downbeat, a result of subdued demand.

Retails Sales in Singapore Weaken

Shoppers cut their spending in May by 2.3% compared to the preceding month, which contributed to transactions being only 3% above the year-ago period. In April, cashier transactions were up 0.4% m/m and 5.4% y/y. Economists anticipated a 6.5% y/y jump. When excluding motor vehicles, parts and accessories, sales were stronger, climbing 3.7% y/y and slipping only 1.8% m/m.

The wearing apparel and footwear category sank 4.9% m/m. Other categories with significant declines and the extent of their changes were as follows:

• Motor vehicles, parts and accessories, 4.8%
• Food and alcohol, 4.6%
• Watches and jewelry, 4.3%
• Mini-marts and convenience stores, 3.7%,
• Petrol service stations, 2.8%

The recreational goods category and the furniture and household equipment group led growth with cashier activity up 11.6% and 3.2%.  Sales of optical goods and books, meanwhile, climbed 1.3% while computer and telecommunications equipment spending was up 0.8%