The Morning Edge

Asia Shares Gain as Chip Rally Extends, Oil Slips on Easing Iran Fears

Here’s your quick read to start the day: a chatty, no-fuss look at overnight moves, the big story, what’s on the docket, and the tickers you need to watch.

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By Richard Fargose

July 10, 2026 at 2:08 AM IST

Global Mood: Cautiously Risk-On
Drivers: US-Iran War Resumes, Putin Rejects Peace, Meta's AI Chip

Asian shares gained on Friday, extending the previous session's rebound as an overnight tech-led Wall Street rally lifted sentiment across the region. South Korea's Kospi rose 2.6%, and Japan's Nikkei added 1.3%, with the MSCI Asia Pacific Index up 0.6%, as optimism toward technology resurfaced on signs that the AI investment boom remains intact following a sharp bout of selling in chip stocks earlier in the week.

The chip sector remained firmly in focus, with SK Hynix surging after raising $26.5 billion in its American depositary share offering, set to begin trading on the Nasdaq on Friday. Micron Technology also bolstered sentiment by announcing plans to spend $250 billion on new U.S. plants to meet AI-driven demand. In comparison, SK Hynix and Samsung are set to ramp up investment in South Korea as part of an $880 billion government-led initiative.

THE BIG STORY
The US-Iran ceasefire has all but collapsed as Iran launched fresh strikes on US military infrastructure across Kuwait, Qatar, and Bahrain on Thursday, hours after US strikes killed 14 and injured 78 on Iranian soil — including a strike that hit the perimeter of the Bushehr nuclear power plant. Iran buried Supreme Leader Khamenei in Mashhad as the attacks unfolded, capping a week of mass funeral processions that had briefly paused diplomacy. The cycle of retaliation now threatens a return to full-scale conflict, with Hormuz shipping, Iranian oil infrastructure, and US Gulf bases all in the crossfire and no diplomatic framework left standing to contain the escalation.

On the Russia-Ukraine front, sources close to the Kremlin told Reuters that Putin is rejecting peace calls and is instead likely to escalate in the coming months, driven by his goal of full Donbas control and hardened resolve following Ukraine's strikes on Russian refineries and ports. Kyiv's intelligence meanwhile indicates Putin may be preparing operations beyond Ukraine's borders — a stark warning as Trump pushes for negotiations at the NATO summit. On a brighter note, Meta revealed plans to begin manufacturing its in-house AI chip, codenamed Iris, from September as part of an ambitious plan to double computing capacity to 14 gigawatts next year — a signal that hyperscaler AI investment is pressing ahead despite market scepticism over returns.

Data Spotlight
Initial jobless claims fell by 2,000 to 215,000 in the week to July 4th, below expectations of 218,000 and a six-week low, continuing to support the view of a low-firing labour market. Continuing claims rose modestly to 1,814,000, the highest since late March but below expectations, while federal employee claims fell by 40 to 404.

Existing home sales fell 2.4% month-on-month in June to a seasonally adjusted annual rate of 4.09 million, well below expectations of 4.20 million, with declines across the South, Midwest and West offsetting a gain in the Northeast. Inventory dipped to 4.6 months of supply, while the average price rose 1.8% year-on-year to $440,600, the strongest annual gain in over a year.

The average 30-year fixed mortgage rate edged up to 6.49% as of July 9th from 6.43% the prior week, as markets continued to price in at least one Fed rate hike by end-2026. June FOMC minutes showed only a few policymakers favoured an immediate hike, though inflation concerns remained widespread.

Takeaway: The US labour market held firm in early July, with jobless claims surprising to the downside, though the housing market continued to struggle with affordability pressures as mortgage rates ticked higher and existing home sales missed expectations. With market pricing in further Fed tightening, meaningful relief for the housing sector remains unlikely in the near term.

WHAT HAPPENED OVERNIGHT

US stocks rally as Micron's investment plans fuel chip rebound despite Iran escalation

The S&P 500 gained 0.81%, Nasdaq climbed 1.30%, and the Dow rose 0.27%, with the S&P 500 now up 10% in 2026 and less than 1% below its June 2 record high.
The Philadelphia Semiconductor Index surged 3.06% for a second straight session of gains, led by Micron jumping 4.5% after announcing plans to invest over $250 billion in the US through 2035 to meet AI-driven memory chip demand.
Applied Materials climbed 3.2%, and SanDisk surged 7.6%, while Meta rose after Reuters reported it plans to manufacture its own AI chips starting in September.
Iran said it struck US military targets in Kuwait, Qatar, and Bahrain following Wednesday's US strikes, though markets shrugged off the escalation.
The S&P 500 is trading at 20 times expected earnings, down from 21 a month ago, with analysts projecting 24% year-over-year earnings growth for Q2 as reporting season gets underway.
Weekly jobless claims fell, suggesting the labour market remained stable despite June's soft payrolls print, keeping a December Fed hike in play per CME FedWatch.
PepsiCo fell 3.3% despite beating Q2 revenue estimates, while Costco sank 4.2% to a six-month low after reporting decelerating June comparable sales.

US Treasury yields edge lower after two-session climb to two-month highs

The 10-year yield dipped to 4.56% after rising 10bps over the prior two sessions on surging oil prices from renewed US-Iran strikes.
FOMC minutes showed only a few policymakers favoured a June hike, though officials expressed growing concern about inflationary pressures from the energy shock.
Weekly jobless claims continued to point to a resilient labour market, keeping the case for tighter policy intact.
Markets price at least one Fed hike by year-end, with the probability of a September move at 64%.

US Dollar holds near 101 as markets weigh Iran escalation against divided Fed signals

The dollar index was little changed at 101 as oil price gains eased following two sessions of sharp rises driven by US-Iran exchanges of fire.
FOMC minutes showed policymakers divided on the rate path, with only a few favouring a hike, though markets still price at least one move by year-end with 64% odds of a September increase.
The dollar edged slightly lower against the yen as investors assessed whether Japanese authorities had intervened to support the currency.
The euro gained modestly against the dollar as expectations for another ECB rate hike strengthened.

Oil slides 2% as demand concerns offset supply risks from renewed US-Iran strikes

Brent settled at $76.30/bbl, down 2.2%, and WTI at $72.08, down 2.0%, as rising inflation fears and global growth concerns weighed on the demand outlook.
Iranian forces struck US military infrastructure in Gulf states following US strikes on Iran's southern and eastern provinces, further straining the three-week-old ceasefire.
Goldman Sachs estimated Persian Gulf oil flows retreated to the low-70s% of pre-war levels after recovering above 80% in the first 10 days post-Hormuz reopening.
Qatar condemned attacks on commercial shipping and called for a return to diplomacy, while Turkey and Oman urged de-escalation, with Iran appearing to signal willingness to return to the negotiating table.
FOMC minutes showed mounting inflation concerns, with policymakers generally expecting labour market conditions to remain stable near-term, while New York Fed President Williams said he did not expect a sustained rise in energy prices.
Ukrainian drones hit a dozen more Russian tankers in the Sea of Azov, extending a campaign to disrupt fuel supplies and isolate Crimea.
China's producer price inflation surged to a four-year high in June, adding pressure on manufacturers' margins amid weak domestic demand.
A Ukraine war settlement could lift sanctions on Russia and unlock additional oil supply, with Moscow remaining the world's third-largest crude producer.

Day’s Ledger*

Economic Data

German June CPI Data
US IEA Monthly Report
India Weekly FX Reserves Data
US WASDE Report
India June AMFI MF Industry Monthly data

Corporate Actions

Earnings: Elecon Engineering, Indian Bank, Just Dial, L&T Finance, Bank of Maharashtra
PNB Housing Finance to consider fund raising
Wheels India to consider fund raising

Tickers to Watch

TATA CONSULTANCY SERVICES: Q1 FY27 revenue at 722.75 billion rupees, up 2.2% QoQ from 706.98 billion rupees; results in line with muted street expectations.
MAHINDRA & MAHINDRA: June 2026 total sales up 32.5% YoY to 1.04 lakh units, vs 78,142 units a year ago.
APOLLO MICRO SYSTEMS: Signs SPA with promoter shareholders of Premier Explosives to acquire 41.33% stake for 15.50 billion rupees.
OIL AND NATURAL GAS CORPORATION: Board accords in-principle approval for development of a 1.75 MMT Strategic Petroleum Reserve at Mangalore under Phase-I extension.
DIXON TECHNOLOGIES (INDIA): Signs JV agreement and shareholders' agreement with Vivo Mobile India to incorporate a JV company in India for OEM business of electronic devices, including smartphones.
ANAND RATHI WEALTH: Q1 net profit up 73.6% YoY to ₹1.63 billion (vs 0.94 billion rupees); revenue up 17.5% to 3.22 billion rupees; EBITDA down 15% YoY to 1.09 billion rupees, margin contracts to 33.7% from 46.6%.
TORRENT PHARMACEUTICALS: Initiates voluntary recall of select batches of Semalix injection disposable pens as a precautionary measure, following manufacturer Dr Reddy's product recall notification for technical evaluation.
CONTAINER CORPORATION OF INDIA (CONCOR): Signs long-term agreement with GAIL (India) to set up an LNG dispensing station at its ICD in Khodiyar, Ahmedabad.
POWER GRID CORPORATION OF INDIA: Declared successful bidder under TBCB route for interstate transmission system for "Augmentation at Bhadla-III, Ramgarh PS and Kanpur (PG)" project on BOOT basis.
HAVELLS INDIA: Enters battery energy storage systems (BESS) segment via strategic collaboration with Norway-based Pixii AS.
PACE DIGITEK: Subsidiary Lineage Power signs MoU with Onward Solar Power and Kalpa Power to supply Battery Energy Storage Systems.
GREAT EASTERN SHIPPING COMPANY: Takes delivery of 2015-built LR2 tanker "Jag Laxman" (109,990 dwt), fully financed through internal accruals.
MUTHOOT MICROFIN: Q1 AUM up 18% YoY, driven by strong disbursement growth and improving collection efficiency.
AWL AGRI BUSINESS: To expand regenerative mustard farming programme after demonstration farms show yield improvements of up to 30%.

Must Read

(*Compiled from various media sources)

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