Technology selling keeps pressure on equities
The sell-off in equity markets continues, with technology stocks, and semiconductor names in particular, remaining under sustained pressure. Investors are increasingly confronted with a difficult combination of geopolitical uncertainty surrounding the escalating conflict with Iran and the prospect of higher interest rates, prompting a further reduction in equity exposure.
A still-resilient US economy, coupled with the inflationary risks arising from higher oil prices, could force central banks to adopt a more restrictive monetary policy stance sooner than markets had previously anticipated. This growing uncertainty has created an increasingly fragile backdrop for global equities.
Semiconductor valuations remain vulnerable
Given the elevated valuations across the semiconductor sector, investor sentiment has become particularly sensitive. At the same time, the ongoing US earnings season continues to present downside risks.
Even strong results from technology companies are increasingly proving insufficient to satisfy lofty market expectations, often triggering follow-on selling across the sector. In the seasonally thin summer trading environment, this has amplified downside momentum.
US macro data moves into focus
Today's session will once again be driven by a combination of corporate earnings and key US macroeconomic releases. Investors will closely monitor housing starts and industrial production, particularly after recent housing market data pointed to growing strains within the US real estate sector.
