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Last updated: July 31, 2026, 2:30 AM ET

Asian Equities Rally on AI Optimism, Yen Intervention

Asian stocks in nearly four months, led by South Korea’s Kospi which surged 17% on renewed optimism in the artificial intelligence trade. Chipmakers and technology shares climbed broadly after blockbuster earnings from major tech firms reinforced expectations for AI demand, helping the Nikkei 225 rise 2.7%. The yen jumped sharply amid suspected intervention by Japanese authorities, with Japan’s government declining to confirm the action but hinting at overseas support.

Corporate Earnings and Outlooks Mixed Amid Market Volatility

French utility Engie SA due to energy market volatility and cost cuts, while insurer AXA backed its 2026 targets after first-half earnings. However, Siemens Healthineers for the fiscal year, citing weakness in its diagnostics business. Sony, on the other hand and raised its guidance, driven by its music and image-sensor divisions.

Global Inflation and Economic Indicators Show Diverse Trends

Kenya’s annual inflation rate climbed to 6.5% in July, exceeding the central bank's target range for a third consecutive month, primarily due to rising energy costs. In Singapore, retrenchments since the pandemic began, as some overseas-facing industries underwent restructuring. Meanwhile, Egypt in financing from the IMF after successfully passing a review of its program.

Big Tech Pushes AI Investment Past $1 Trillion, Facing Scrutiny

Major technology companies including Google, Amazon, Microsoft, and Meta have significantly increased their investments in artificial intelligence, with Amazon alone planning to spend $220 billion on AI infrastructure this year. This spending spree, however, is and concerns over higher costs and borrowing constraints. AI hedge fund Situational Awareness, once a leader in the AI trade by Citadel after significant asset sales.

Commodities React to Supply Concerns and Geopolitical Tensions

Copper headed for a monthly advance on signs of tightening global supply, influenced by substantial material flows to the U.S. Iron ore prices also over potential disruptions from threatened strike action at BHP Group's Port Hedland export hub, though weak Chinese demand is expected to cap gains. Oil futures after the U.S. retaliated against an Iranian attack, but prices remained on track for their biggest monthly gain since March due to escalating U.S.-Iran tensions.

UK Financial Markets Focus on Regulatory Changes and Corporate Strategy

The FTSE Live index as attention turned to the tech sector, while the pound slipped. The UK's Financial Conduct Authority plans to publish daily stock trading data starting Friday to enhance market transparency. Lloyds Banking Group is targeting £2 billion in cost cuts as part of a new four-year strategy, building on its pivot away from traditional lending as part of its plan.

Private Markets and Investment Trends Under the Microscope

Fitch Ratings reported that the default rate across U.S. private debt borrowers in the second quarter, signaling growing concern over unseen risks in investments held by insurance companies. KKR, however of assets, defying a broader slowdown in the private equity exit market. Blue Owl's private credit fundraising fell to its slowest pace in three years, though demand for data center investments provided some support.

South Korean Market Surges on AI Enthusiasm, Retail Traders Adjust

South Korean stocks climbed by a record 15% on Friday, rebounding from earlier losses as major technology firms’ spending plans refueled optimism in the artificial intelligence trade. This surge followed days of heavy selling, prompting retail investors to in South Korea, Taiwan, and mainland China, reflecting a forced closure of positions due to tech stock volatility.

Goldman Sachs and Bond Market Dynamics Under Observation

Goldman Sachs traders indicated that stock markets lack the momentum for a significant breakout, with equities largely trading within a narrow range for nearly two months. Meanwhile, bond markets experienced a sharp sell-off following the Federal Reserve's latest rate decision, signaling growing turmoil and a potential "credibility shock" between markets and the central bank as it navigates policy.

International Trade and Geopolitical Factors Influence Markets

Panama is facing economic pressure from Beijing that has disrupted its shipping industry, hindering its ambitions to become a global logistics hub as a result of its policies. Pakistan has secured safe passage for an LNG shipment from Qatar through a deal with Iran, an effort to bolster its energy security. Saudi Arabia's quarterly fiscal deficit, benefiting from a spike in oil prices driven by wartime conditions.

European Markets Navigate Inflationary Pressures and Strategic Shifts

The Bank of England amid uncertainty surrounding energy shocks, signaling a potential for further hikes if Middle East hostilities exacerbate inflation. Engie, a French utility benefiting from energy market volatility. In Italy, aerospace and defense group Leonardo lifted its guidance to about €28.2 billion in orders for the year, up from a previous forecast of €25 billion.

US Refiners Capitalize on Global Fuel Shortages, While Defense Spending Rises

U.S. refiners are experiencing highly profitable quarters by running at full capacity to meet a global fuel shortage, a situation exacerbated by years of domestic refinery closures and ongoing conflicts. The Pentagon has committed over $120 billion for Patriot missiles and submarines, with the final cost contingent on congressional funding for defense initiatives.

China's Economy Signals Cautious Support Amid Stumbling Growth

China's ruling Politburo has signaled a need for "more proactive" tax and spending policies to address its stumbling economy, but has not endorsed broad measures to combat weak consumer spending. The yuan strengthened to its highest level in over three years against the dollar, buoyed by the dollar's renewed weakness and continued policy support from Chinese authorities.

Biotech and Healthcare Sector Sees Funding and Performance Shifts

Apnimed Inc., a late-stage drug developer in an upsized U.S. initial public offering. Labcorp Holdings Inc. raised earnings for the year, citing strong demand for medical testing, particularly cancer tests and genetic screenings. Sanofi's shares slid after its CEO indicated challenges in filling the company's drug pipeline, prompting a revamp of its R&D operations and an intensification of dealmaking to bolster its portfolio.