Summary
- Wall Street is focused on the pullback in artificial intelligence (AI) and semiconductor-related stocks, including whether the Philadelphia Semiconductor Index's 7.94% plunge will continue.
- Wall Street says the June nonfarm payrolls report and a hawkish reading of the Fed could strengthen the case for a rate increase later this year.
- China's stock market could remain in wait-and-see mode depending on the June purchasing managers' index (PMI), the pace of second-half economic recovery, and the possibility of weaker buying by foreign investors.
Forecast Trend Report by Period
Shanghai Stocks Look to PMI for Clues on Second-Half Growth
Wall Street investors will be watching this week whether the pullback in artificial intelligence and semiconductor shares has further to run. June nonfarm payrolls will also be a key focus.
AI- and chip-related stocks fell sharply after negative headlines involving Apple and OpenAI. The Philadelphia Semiconductor Index sank 7.94% last week, while the tech-heavy Nasdaq Composite slid 4.60%. Micron Technology reported results that far exceeded expectations last week, but its shares fell after news that Apple planned to raise product prices. A report that OpenAI may delay its initial public offering until next year added to the selling.
Investors are also closely watching this week's employment report. Wall Street has already taken the Federal Reserve's statement from its June Federal Open Market Committee meeting as hawkish. If the labor data comes in hotter than expected, expectations for another rate increase this year could strengthen. US markets will be closed on July 4 for Independence Day.
Shanghai stocks are poised for cautious trading this week as late-June economic data coincides with half-year-end liquidity factors. The key event is the National Bureau of Statistics' official June purchasing managers' index, due on June 30. Whether the reading returns above 50, the line between expansion and contraction, will be a key test of growth momentum in the second half. On July 1, the private-sector Caixin manufacturing PMI, which focuses on small and medium-sized companies, will provide another check on broader economic conditions.
Globally, capital flows could slow ahead of the July 4 US market holiday. With the market entering the summer lull, when foreign investor buying typically cools, stocks may remain in a wait-and-see mode rather than find a clear catalyst for gains.
Park Shin-young, New York correspondent, Hankyung.com, nyusos@hankyung.com
Korea Economic Daily
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