US Market Pulse: S&P500, NASDAQ, DJIA
The U.S. equity complex drifted lower on Thursday as profit-taking among megacaps weighed on technology names while defensive sectors outperformed. The S&P500 slipped 0.37% to 6,339.39, the NASDAQ Composite edged down 0.03% to 21,122.45, and the DJIA declined 0.74% to 44,130.98. Renewed fears over trade tensions and softer economic data pushed futures lower in Asia—S&P500 futures off 0.19% and NASDAQ 100 futures down 0.30%—even as rate-cut expectations for September climbed toward an 83% probability per the CME FedWatch Tool.
Trading Stance: Hold the S&P500 and NASDAQ, reduce exposure to the DJIA.
Asia-Pacific Sell-Off: HSI, KS11, AXJO
Friday’s Asian session extended the global pullback, with Hong Kong’s HSI down 1.07% to 24,507.81 and mainland China’s CSI 300 off 0.51% at 4,045.93. South Korea’s KS11 plunged 3.88% to 3,119.41, marking its steepest one-day slide in months, while Australia’s AXJO gave back 0.92% to finish at 8,662.00. India’s NIFTY50 lost 0.48% to 24,565.35 and the Sensex fell 0.34% by mid-morning. Weak global PMIs, fresh U.S. tariff threats, and China’s manufacturing contraction fueled a broad retreat in cyclicals and export-reliant sectors.
Trading Stance: Sell the HSI and KS11, hold the AXJO.
Asia Tech Slump: Tokyo Electron, SK Hynix, TSMC
Tech heavyweights bore the brunt of selling: Tokyo Electron plunged 17%, Lasertec fell 4.67%, Advantest dropped 2.51%, and SoftBank Group slipped 2.07%. In Seoul, SK Hynix tumbled 5.12% and Samsung Electronics lost 1.92%. Taiwan’s TSMC declined 1.72%, even as Hon Hai (Foxconn) rose 1.12%. Hong Kong’s Tech index down 0.23% was led lower by China Petroleum & Chemical (–5%), Zhongsheng (–3.02%) and Li Auto (–2.60%). The sell-off reflected concerns over slowing chip demand, supply-chain risks, and the specter of sustained tariffs on technology exports.
Trading Stance: Sell Tokyo Electron and SK Hynix, hold Samsung Electronics and TSMC.
China Factory Pullback: Caixin Manufacturing PMI
China’s private sector Caixin/S&P Global manufacturing PMI slipped into contraction at 49.5 in July (prior 50.4), below the 50.4 consensus. Export orders stalled as U.S. tariff uncertainty prompted producers to scale back output. Firms reported the second drop in production since October 2023, with softened new-order growth and downward pricing pressure amid rising input costs. Domestic stimulus measures have so far offset only a portion of the export slump, leaving broader industrial activity subdued.
Trading Stance: Bearish on mainland-China industrial plays; hold broader CSI 300 exposure.
Currency Swings: Dollar Index, JPY/USD, KRW/USD
The U.S. dollar extended gains, lifting the DXY index 0.11% to 100.73. The Japanese yen held around JPY 150.75/USD, while the Australian dollar was little changed at 0.6427/USD. China’s offshore yuan weakened 0.11% to 7.2083/USD after earlier hitting a two-month low. The Taiwanese dollar fell 0.35% to 30.01/USD, and the South Korean won breached KRW 1,400/USD for the first time in three months, closing at 1,399.50 (–0.53%). Southeast Asian currencies were mixed, with the Singapore dollar unchanged at 1.284/USD, Thai baht down 0.24% to 32.81/USD, Philippine peso off 0.49% to 58.494/USD, and Malaysian ringgit down 0.42% to 4.278/USD.
Trading Stance: Long USD; short KRW/USD; neutral on JPY/USD.
Trump Tariff Update: Reciprocals & Market Impact
President Trump’s new reciprocal tariff order sets rates from 10% to 41% on dozens of trading partners: Canada at 35%; Switzerland at 39%; India at 25%; Taiwan at 20%; EU, South Korea, and Japan at 15%; ASEAN at 19–20%; UK unchanged at 10%. Non-Canadian levies take effect Aug 8 with a seven-day loading window through Oct 5. Mexico’s tariffs are paused for 90 days. While markets initially shrugged off the tariff details, export-dependent sectors from semiconductors to autos are now under renewed pressure.
Trading Stance: Increase hedges on export-driven equities; reduce Korea and Japan export exposure.
Us Labor & Inflation: NFP, Revised Data, Core PCE
July’s nonfarm payrolls rose just 73,000 versus 104,000 forecast, with May and June revisions slashing prior gains to 19,000 and 14,000 (from 144,000 and 147,000) — the largest two-month downgrade since 2020. The unemployment rate climbed to 4.2% (from 4.1%) as participation dipped to 62.2%. Core PCE inflation accelerated 0.3% m/m (2.8% y/y) — above consensus — driven by tariff-inflated goods prices. Real personal spending rose only 0.1% in June and personal income recovered 0.3% after a 0.4% drop.
Trading Stance: Overweight U.S. consumer staples; underweight economically sensitive cyclicals.
Fed & Policy Shifts: FOMC, Kugler Resignation
At the July FOMC, the Fed held rates steady, with two dissenters favoring a cut. Chair Powell cautioned that tariff impacts on inflation are still emerging, while market pricing now sees an 83% chance of a September rate reduction. Fed Governor Adriana Kugler will resign effective Aug 8, potentially opening a White House appointment before next May’s chair selection, raising questions on policy independence.
Trading Stance: Tactical long on short-dated Fed funds futures; neutral on long-term Treasuries.
