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Wall Street Watches Whether Pullback in AI, Chip Stocks Has Further to Run: Weekly Outlook for New York, Shanghai
Summary
- Wall Street is focused on the pullback in artificial intelligence (AI) and semiconductor-related stocks, as well as whether the Philadelphia Semiconductor Index will extend its sharp decline.
- Depending on the June nonfarm payrolls report, the case for another interest-rate increase by the Federal Reserve could strengthen.
- Shanghai stocks may remain in a wait-and-see mode as investors weigh the Purchasing Managers’ Index (PMI) release, half-year-end liquidity factors and slower global fund flows.
Forecast Trend Report by Period
Shanghai Stocks Look to PMI for Clues on the Second-Half Economy
New York investors this week, from June 29 to July 2, will be watching whether the pullback in artificial intelligence and semiconductor stocks has further to run. The June nonfarm payrolls report is also a key market focus.
AI and chip shares fell sharply after negative headlines involving Apple and OpenAI. The Philadelphia Semiconductor Index sank 7.94% last week, while the tech-heavy Nasdaq Composite dropped 4.60%. Micron Technology posted earnings far above expectations last week, but its shares still fell after news that Apple would raise product prices. A report that OpenAI could delay its initial public offering until next year added to selling pressure.
Investors are also closely tracking this week’s employment report. Wall Street has already read the Federal Reserve’s statement from its June Federal Open Market Committee meeting as hawkish. If the labor data comes in hotter than expected, bets on another rate increase this year could strengthen. US markets will be closed on July 4 for the Independence Day holiday.
Shanghai stocks this week are poised for cautious trading as key end-of-June economic data coincides with half-year-end liquidity factors. The market’s main test will come on June 30, when the National Bureau of Statistics releases China’s official June Purchasing Managers’ Index. Whether the reading climbs back above 50, the line separating expansion from contraction, will serve as a gauge of the economy’s recovery momentum in the second half. On July 1, the Caixin manufacturing PMI, which tracks mainly private small and medium-sized companies, will provide another check on broader economic conditions.
Global fund flows may also slow ahead of the July 4 US market holiday. With markets entering the summer lull, when foreign buying often softens, investors may remain on the sidelines rather than look for a clear upside catalyst.
New York - Park Shin-young, Hankyung.com correspondent, nyusos@hankyung.com
Korea Economic Daily
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