Market Navigator: Fed decision, four Mag 7 reports – week of 27 Jul 2026

Last week’s recap: US tariffs hit 60 economies, Brent tops $100 and ECB holds rates steady

• Tariffs return to the fore: The US imposed new tariffs on imports from 60 economies over forced-labour allegations, replacing a temporary 10% levy that expired Friday. Rates range from 10% for the UK, India and EU to 12.5% for Japan, Korea and China, while generic drugs face a 100% tariff within two years. Separate national security investigations targeting sectors including semiconductors remain in progress, with China's tariff truce expiry in November also set to keep trade risk in focus for H2.
• Oil, yields surge on Iran: Houthi rebels attacked two Saudi oil tankers and declared a blockade of Saudi ports, sending Brent crude above $100 a barrel for the first time since May. US ten-year Treasury yields rose above 4.7%, the highest since January 2025, as markets priced in a firmer Federal Reserve (Fed) policy path.
• ECB holds, keeps September hike alive: The European Central Bank (ECB) left interest rates unchanged, in line with expectations. President Lagarde warned the full effects of the energy shock have yet to play out, keeping the option of a September hike open. Markets price a 70% hike probability for next month, while EUR/USD declined 0.6% last week.
• UK gets new PM: Andy Burnham became UK prime minister on Monday, succeeding Keir Starmer, and named John Healey chancellor over the market-favoured Shabana Mahmood. Sterling weakened over the week as Burnham's cost-of-living proposals raised unfunded fiscal concerns, compounding pressure from cooler-than-expected UK inflation.

Markets in focus: S&P 500 slips for second week, Hang Seng challenges 25,000 and yen approaches 164

US equities extend losses as Big Tech wobbles, defence stocks surge on record backlogs

The S&P 500 fell 0.6% last week, a second consecutive weekly decline, as technology led losses. The Nasdaq 100 dropped 1.6%, while the Dow Jones lost a more modest 0.4%.

Big Tech earnings disappointed investors despite strong headline numbers. Alphabet closed the week 7.8% lower despite Google Cloud revenue growing 82% in Q2 and beating on revenue. However, core adjusted earnings per share (EPS) – after stripping out non-operational gains such as unrealised profits on its Anthropic and SpaceX stakes – narrowly missed consensus. Investors focused on capital expenditure guidance, raised to $195–205 billion for 2026, and the resulting hit to free cash flow. Tesla fared worse, plunging 17.8% on an earnings miss and heavy spending, with operating margin collapsing and free cash flow turning negative. Investors are growing increasingly impatient with the lack of clarity on Tesla's scale-up timeline for its robotaxi and Optimus humanoid robot ventures.

Super Micro Computer was a standout gainer in the technology sector, surging 24.5% after a preliminary business update disclosed a record $60 billion order backlog and nearly doubled its gross margin guidance to 15–17%, from 8.2–8.4%.

Energy, utilities and industrials outperformed as the US-Iran conflict extended. Defence stocks were among the best performers, with Lockheed Martin and RTX both rallying on beat-and-raise Q2 results and record order backlogs.

The US Tech 100 continued its near-term downward trend last week and is currently testing the support level from June's low near 28,186. A break below could see the index fall further towards 27,711, a 38.2% Fibonacci retracement of the advance between March and June. The medium-term uptrend remains intact provided the index holds above the 200-day moving average (MA). Near-term recovery, however, is likely to be capped by the 20-day MA near 29,188.

Figure 1: US Tech 100 index daily price chart

Hang Seng Index extends gains as banks rally, Politburo meeting comes into view

The Hang Seng Index rose 1.6% last week, its fourth straight weekly gain, closing just below the 25,000 mark. Banks led the advance as investors lifted earnings expectations on prospects of a Fed rate hike: BOC Hong Kong hit a record high, up 10.2%, while Bank of East Asia climbed 9.6% to a three-month high. Gold's return above $4,000 an ounce also lifted material stocks, with Zijin Mining rebounding 10.2%.

Artificial intelligence (AI) names were more mixed. Zhipu rebounded 11.7%, while MiniMax extended its decline by 9.3% and now trades only 19% above its initial public offering (IPO) price. Sentiment across the sector was further stirred by Moonshot AI's Hong Kong listing plans: the Kimi K3 developer is closing a funding round at a $31.5 billion valuation and preparing to open pre-IPO talks in August at a valuation of up to $50 billion, ahead of a possible listing within six months.

Elsewhere, renewed regulatory pressure weighed on internet platforms. The Cyberspace Administration of China (CAC) launched a four-month campaign to strengthen online protections for minors, raising uncertainties for gaming platforms. NetEase fell 7.5% and Tencent declined 5.9% on the news.

Focus now shifts to this week's Politburo meeting. We expect targeted measures supporting AI and technology self-sufficiency, consumption and investment, rather than a broad-based stimulus package given ongoing fiscal constraints.

The Hang Seng Index attempted to break above resistance near 25,200 multiple times but was rejected. A successful breach of this resistance level would open the way to challenge the 200-day MA near 25,800. For now, the more likely scenario is a sideways move between the above-mentioned resistance and immediate support near 24,000–24,100. Failure to hold could take the index back to its previous support at 22,518.

Figure 2: Hang Seng Index daily price chart

A weak yen may be more problematic than most think

Fresh data last week reinforced the yen's structural vulnerability. The immediate catalyst for the latest leg lower remains a stronger dollar, lifted by renewed Middle East escalation. Underneath that sits the wider Fed–Bank of Japan (BoJ) policy gap, with markets largely abandoning bets on Fed cuts while doubting the BoJ delivers the two hikes anticipated at the start of the year.

While most believed the weak yen has lifted stocks this year, recent inflation and trade releases reveal potential risks. Headline consumer price index (CPI) rose to 1.7% in June from 1.5% in May due to a reduction in government energy subsidies, but core-core inflation – which strips out food and energy – eased to 1.7%, its softest since August 2022, giving the BoJ room to hold. Trade data also raised concerns: June exports rose 19.3% year-on-year (YoY), but imports grew faster still, up 25.4%. This serves as a reminder that a weak yen can squeeze growth, especially if energy costs stay elevated.

Despite verbal warnings when USD/JPY crossed 162 in early July, Tokyo has held off from a fresh round of direct intervention this time, leaning instead on pension funds such as the Government Pension Investment Fund (GPIF) to increase domestic allocation – though officials later said the GPIF's target weights remain unchanged. History suggests intervention buys time rather than reversing the trend: a record ¥11.7 trillion spent defending 160 in April–May was unwound within two months.

The latest Commodity Futures Trading Commission (CFTC) data also shows leveraged funds have rebuilt net short yen exposure for two consecutive weeks after an anticipated follow-up currency intervention failed to materialise this month, a sign speculators remain unconvinced Tokyo will act again soon.

From a technical standpoint, USD/JPY is sitting just below the 61.8% Fibonacci extension of the ascent between April 2025 and January 2026, near 164.1. Should this be breached, the next upside target points to the 166 zone, guided by the 50% line of the pitchfork. On the downside, the 20-day MA provides immediate support at 162.4; a breach would target 160.5–160.7.

Figure 3: USD/JPY daily price chart

The week ahead: Fed decision headlines a packed week of central bank meetings, inflation data and key earnings

The Fed's decision is the week's key event. Markets price a 34% probability of a hike, reflecting a shift in the dot plot towards tightening rather than the cuts anticipated earlier this year. Chair Warsh's press conference will be watched for confirmation of that pivot, alongside the same day's core personal consumption expenditures (PCE) price index reading and the US Q2 gross domestic product (GDP) preliminary print.

Despite the recent resurgence in Middle East hostilities driving oil prices higher, the two-year breakeven inflation rate is hovering near five-year lows at 1.9%, down from a peak near 3.2% in May – a potential sign that markets are overly complacent about inflation risks. A hawkish Fed surprise risks pushing yields and the US dollar higher still, placing material pressure on equities and precious metals.

The Bank of England (BoE) is priced for just a 10% probability of a hike. With core inflation holding steady in June, a hold looks likely, but markets will watch whether the 7 (hold)–2 (hike) vote split widens further for clues on whether a hike is imminent.

Meanwhile, the market is fully confident that the Bank of Japan (BoJ) will keep rates unchanged on Friday, despite recent reports suggesting the central bank may accelerate its tightening pace rather than waiting between moves as it typically has. Any signal of a near-term hike would likely offer some support to the extremely weak yen.

Inflation data from Australia and the euro area are expected to stabilise from the previous month, though this may carry limited significance for markets given these releases have not captured the re-escalation in Middle East tensions. China's official purchasing managers' index (PMI) data and Europe's GDP flash round out a data-heavy week.

Earnings season enters its climax. SK Hynix, Samsung and Kioxia report this week. There is little doubt the chip leaders will post record revenues; the key focus shifts to margin sustainability and oversupply risk once new manufacturing capacity comes online. Four of the Magnificent Seven report: Amazon and Microsoft's cloud growth will be measured against Google Cloud's reported 82% pace, while Apple's sales guidance following Apple Intelligence's China approval and Meta's AI monetisation plans via its new Meta Compute offering will also draw attention. Oil majors also report, with energy expected to be the S&P 500's fastest-growing earnings sector in Q2, delivering over 100% growth on higher energy prices.

Figure 4: US inflation and interest rate

Key macro events this week: Fed, BoE and BoJ rate decisions coincide with Mag7, chip giants and oil major earnings

(All times in GMT+8)

Monday 27 July 2026

• 10.30pm — US durable goods orders MoM (June): previous -4.5%, consensus 1.6%

Wednesday 29 July 2026

• 11.30am — Australia inflation rate (June): previous 4.0%, consensus 4.1%

Thursday 30 July 2026

• 4.00am — US Fed interest rate decision: previous 3.75%, consensus 3.75%
• 4.30am — US Fed press conference
• 3.00pm — Japan consumer confidence (July): previous 33.8, consensus 34.2
• 7.00pm — Euro area GDP growth rate QoQ flash (Q2): previous -0.2%, consensus 0.2%
• 9.00pm — UK BoE interest rate decision: previous 3.75%, consensus 3.75%
• 10.30pm — US core PCE price index MoM (June): previous 0.3%, consensus 0.1%
• 10.30pm — US GDP growth rate QoQ advance (Q2): previous 2.1%, consensus 2.3%
• 10.30pm — US personal income MoM (June): previous 0.7%, consensus 0.3%
• 10.30pm — US personal spending MoM (June): previous 0.7%, consensus 0.4%

Friday 31 July 2026

• 11.30am — China NBS manufacturing PMI (July): previous 50.3, consensus 49.9
• 11.30am — China Non-NBS manufacturing PMI (July): previous 50.2, consensus 50.0
• 1.00pm — Japan BoJ interest rate decision: previous 1%, consensus 1%
• 7.00pm — Euro Area inflation rate YoY flash (July): previous 2.8%, consensus 2.9%

Key corporate earnings: Microsoft, Meta, Apple and Amazon report alongside chip giants SK Hynix, Samsung and Kioxia

(In local exchange time)

Monday 27 July 2026

• AstraZeneca

Tuesday 28 July 2026

• Visa
• Coca-Cola
• KLA
• Seagate
• Boeing

Wednesday 29 July 2026

• SK Hynix
• Hitachi
• Advantest
• UBS
• Microsoft
• Meta
• Lam Research
• Procter & Gamble
• Arm
• Qualcomm

Thursday 30 July 2026

• Samsung Electronics
• Tokyo Electron
• Apple
• Amazon
• Mastercard
• Shell

Friday 31 July 2026

• Kioxia
• Sony
• Hoya
• Sumitomo Mitsui Financial Group
• ExxonMobil
• AbbVie
• Chevron

_{Source: Trading Economics, Nasdaq, LSEG (as of 25 July 2026)}