Market Navigator: ECB decision, big tech earnings – week of 20 Jul 2026

Last week's recap: US inflation cools hike bets, China growth slows to 4.3% and Brent surges past $88

• Oil surges as Hormuz traffic dries up: Sustained US-Iran hostilities cut Strait of Hormuz traffic to a trickle, driving Brent crude 15.9% higher to near US$88 a barrel, its strongest weekly gain in three months. Gold extended its decline below US$4,000, as higher-for-longer rate expectations and a firmer dollar weighed on the non-yielding metal.
• US inflation cools, tempering Fed hike bets: Headline consumer price index (CPI) fell 0.4% month-on-month (MoM) in June, pulling the annual rate to 3.5% against a 3.8% consensus, while producer prices (PPI) slipped 0.3% MoM versus a flat forecast. Despite lingering Middle East uncertainty, the twin misses cooled Fed hike bets, with year-end probability easing to 76% from around 85% a week earlier.
• China growth disappoints: Second quarter (Q2) annualised gross domestic product (GDP) growth slowed to 4.3%, missing the 4.5%-5% full-year target and marking the weakest quarter since late 2022. Retail sales' 1% gain fails to convince markets domestic demand has returned. Property investment fell 18% year-on-year (YoY) in H1, deepening the sector's crisis. Markets await stimulus signals from the Politburo's expected meeting later this month.
• Korea's chip rout deepens: South Korea led losses in Asia, with the KOSPI plunged 8.8% as SK Hynix's Nasdaq debut failed to lift sentiment, with its shares diving 16% and Samsung Electronics falling 11% amid a broader chip sell-off. Margin calls on leveraged positions, compounded by new curbs on single-stock leveraged exchange-traded funds (ETFs), worsened the rout.

Markets in focus: Nasdaq 100 tech sell-off, China's AI breakthrough and gold's $4,000 test

Nasdaq 100 and Philadelphia Semiconductor Index slide on capex jitters

US equities declined last week, with technology names driving broad losses: the S&P 500 slid 1.6%, the Dow Jones Industrial Average 0.8%, and the Nasdaq 100 index 4.1%. The Philadelphia Semiconductor Index (SOX) bore the brunt, tumbling 10.0% over the week and extending its retreat from June's record high to 20.3% — meeting the technical definition of a bear market.

Record quarterly revenue from Taiwan Semiconductor Manufacturing Co (TSMC) failed to lift sentiment, as attention turned instead to a further upward revision to its capital expenditure (capex) guidance, raised to US$60 billion – US$64 billion for 2026 from US$52 billion – US$56 billion. Investors grew increasingly sceptical that such spending will translate into commensurate profits, a concern compounded by the prospect of rates staying higher for longer as tensions in Iran re-escalate.

Individual stock moves were stark. SPCX-SPACEX closed at US$123.99, 8.2% below its US$135 initial public offering (IPO) price, after an aborted Starship test flight added to broader investor scrutiny of elevated technology valuations. SanDisk dived 29.3%, the S&P 500's worst performer, as part of a broader memory chip sell-off; a pullback appears almost inevitable after a roughly 500% year-to-date rally, though this need not mark the end of the memory super-cycle. PayPal bucked the trend, surging 22.1% on reports of a US$53 billion takeover approach from Stripe and Advent International.

US mega-bank earnings all beat expectations, but performance diverged sharply. JPMorgan gained 1.4% after posting a record US$21.2 billion quarterly profit, driven by an 86% surge in equity trading revenue. Citigroup, by contrast, plunged 8.1% despite record revenue, as investors focused on management's acknowledgement that its equities trading growth continues to trail larger rivals. Market volatility looks set to persist as Q2 earnings season continues, with mega-caps Alphabet and Tesla due to report this week.

The near-term trend on the US Tech 100 turned negative after a death cross formed between the 20-day and 50-day moving average (MA). The index has corrected around 7% from its peak and is set to test support from June's low near 28,186. A break below could see the index fall further towards 27,700, a 38.2% Fibonacci retracement of the advance between March and June. The medium-term trend remains intact provided the index holds above the 200-day MA. Near-term recovery, however, is likely to be capped by the 20-day MA near 29,465.

Figure 1: US Tech 100 index daily price chart

Hang Seng Index defies regional weakness on AI breakthroughs

The Hang Seng Index (HSI) rose 1.6% last week, bucking a broader Asia-Pacific sell-off of 3.8% despite weak Chinese economic data, as a wave of artificial intelligence (AI) developments lifted sentiment.

Apple received Chinese regulatory approval to launch Apple Intelligence using technology from Alibaba and Baidu, lifting Alibaba 2.2% over the week.

The World Artificial Intelligence Conference opened in Shanghai, with President Xi calling for international cooperation on AI governance. Meanwhile, Chinese start-up Moonshot launches Kimi K3 model, which reportedly rivals leading US models at a fraction of the cost — evoking comparisons to last year's 'DeepSeek moment'. This triggered declines in local rivals Zhipu (-32.5%) and MiniMax (-19.6%), and fed into a global chip sell-off that dragged SMIC down 15.0% and Lenovo 12.5%, the HSI's worst performers.

Elsewhere, Zhongji Innolight secured approval for a Hong Kong listing of up to US$7 billion, while Baidu announced plans to upgrade its Hong Kong listing to dual-primary status, paving the way for Stock Connect inclusion.

The HSI attempted to break above resistance near 25,050 on Thursday but was rejected. A successful breach of this resistance level would open the way to challenge the 200-day MA near 25,800; only a decisive break above the 200-day MA would revert the medium-term trend to bullish. Immediate support should be found near 23,800 – 24,000; failure to hold could take the index back to its previous support at 22,518.

Figure 2: Hang Seng Index daily price chart

Gold struggles to hold $4,000: technical weakness versus supportive fundamentals

Spot gold fell 2.5% on the week, briefly breaching the US$4,000 handle again as the Middle East conflict pressures global central banks to keep rates higher for longer.

Wall Street has slashed targets amid the hawkish policy repricing: BofA cut its 2026 average forecast to US$4,360 and sees scope for a deeper pullback towards US$3,315. Goldman Sachs lowered its year-end target to US$4,900 from US$5,400, and JPMorgan cut its fourth quarter target to US$4,500 from US$6,000. All three retain a constructive medium-term view, citing central bank demand as a strong fundamental support.

Flow data shows improvement, with spot gold exchange-traded fund (ETF) outflows reversing from 38.2 tonnes in the week to 26 June — the weakest since 2022 — to inflows of 2.6 tonnes in the week to 10 July, according to the World Gold Council. China added to the picture: the People's Bank of China (PBoC) bought 15 tonnes in June, its largest purchase since October 2023, taking first-half accumulation to 40 tonnes.

Beijing is curbing retail speculation, with ICBC and other major state banks set to end leveraged paper gold trading on the Shanghai Gold Exchange from 24 July. By stripping out a layer of speculative retail flow, the move could reduce short-term price volatility and create a more stable backdrop for the PBoC to continue accumulating reserves at a steady pace.

Gold has been in a downtrend since late January after failing to surpass its peak at US$5,596. Technical momentum remains weak, trading below all major moving averages. Should immediate support at US$3,886 — October 2025's pivot low — fail to hold, a 50% Fibonacci retracement of its bull run between September 2022 and January 2026 points to downside potential towards US$3,600. Any recovery is likely to encounter resistance from the 50-day MA at US$4,235.

Figure 3: Spot gold daily price chart

The week ahead: ECB set to hold at 2.25%, UK inflation nears 3% and high-profile earnings from Alphabet and Tesla

This week's calendar centres on the European Central Bank's (ECB) rate decision, while inflation data from Japan and the UK, alongside a busy earnings slate, will also shape sentiment.

The ECB meets on Thursday, with markets pricing an 84% probability that the deposit facility rate holds at 2.25% following June's hike. A ceasefire-driven pullback in energy prices had offered brief relief to the eurozone's inflation outlook, but renewed US-Iran hostilities risk reigniting cost pressures. This is unlikely to sway July's decision, however, as policymakers are expected to pause and assess how the economy is digesting June's tightening before considering further moves. EUR/USD has rebounded less than 1% from June's low; a more hawkish tone than expected from President Lagarde could support further recovery.

In the UK, CPI is expected to ease from 2.8% YoY to 2.7% in June, but the Bank of England (BoE) expects it to climb towards 3% in the third quarter and above 3.25% by year-end as the energy shock feeds through, keeping the debate over the path of policy alive.

Japan's inflation print will also draw attention. Core CPI may rebound from 1.4% — its lowest level since March 2022 — which has been masked by government fuel subsidies. June's data offers the first proper gauge of underlying consumer price pressure since the Bank of Japan's (BoJ) rate hike last month, as well as the impact of a yen trading near 40-year lows against the US dollar.

On the corporate front, two of the 'Magnificent Seven' (Mag7) — Alphabet and Tesla — report, alongside hardware names Intel, Texas Instruments and IBM. Capital expenditure will be a common thread, with investors increasingly sceptical that big tech can sustain current spending growth while preserving balance sheet health. For Alphabet, the key question is whether Google Cloud's 63% growth pace can be sustained into the second half. For Tesla, the market's focus has shifted beyond already-known delivery figures towards whether margins can recover, and whether progress on autonomous driving, AI and energy storage can support its next growth phase.

Figure 4: Eurozone unemployment, inflation and interest rate

Key macro events this week:  ECB rate decision; Japan and UK inflation

(All times in GMT+8)

Tuesday 21 July 2026

• 2.00pm — UK unemployment rate (May): previous 4.9%, consensus 4.9%

Wednesday 22 July 2026

• 7.50am — Japan balance of trade (June): previous -378.7 billion yen, consensus -120 billion yen
• 2.00pm — UK inflation rate YoY (June): previous 2.8%, consensus 2.7%

Thursday 23 July 2026

• 8.15pm — ECB deposit facility rate decision: previous 2.25%, consensus 2.25%
• 8.45pm — ECB press conference

Friday 24 July 2026

• 7.30am — Japan core inflation rate YoY (June): previous 1.4%, consensus 1.6%
• 2.00pm — UK retail sales MoM (June): previous 1.2%, consensus 0.2%
• 4.30pm — UK S&P Global manufacturing purchasing managers' index (PMI) flash (July): previous 52.5, consensus 52.1
• 4.30pm — UK S&P Global services PMI flash (July): previous 48.8, consensus 49.4
• 9.45pm — US S&P Global manufacturing PMI flash (July): previous 53.9, consensus 54.5
• 9.45pm — US S&P Global services PMI flash (July): previous 51.2, consensus 51

Key corporate earnings: Big banks kick start earnings season

(In local exchange time)

Tuesday 21 July 2026

• Novartis

Wednesday 22 July 2026

• Alphabet
• Tesla 
• GE Vernova
• Philip Morris
• Texas Instruments
• IBM

Thursday 23 July 2026

• Intel
• RTX
• T-Mobile

Friday 24 July 2026

• Shin-Etsu Chemical
• American Express

_{Source: Trading Economics, Nasdaq, LSEG (as of 19 July 2026)}