TradingKey - Donald Trump announced that the U.S. will take control of the Strait of Hormuz and charge a "toll," which, compounded by a crash in the South Korean stock market, dampened market sentiment. The three major indexes fell across the board, SpaceX and SK Hynix ADRs dropped close to their offering prices, memory chip stocks slumped, and the Philadelphia Semiconductor Index fell over 5%.
At the close, the Dow Jones Industrial Average fell 0.26% to 52,498.64; the Nasdaq Composite Index fell 1.55% to 25,873.18; and the S&P 500 Index fell 0.79% to 7,515.34.
Tech Stock Performance
SK Hynix (SKHY) fell 9.32% to $152.35.
Korea Investment & Securities' (KIS) adjustment to SK Hynix's earnings model is prompting the market to reassess the pricing foundation of AI memory trades. According to South Korean media on July 13 citing the KIS report, SK Hynix may miss second-quarter profit consensus, with the reasons pointing to long-term pricing and supply agreements rather than weakening AI demand. In addition, SK Hynix's US ADRs trade at a premium of approximately 23.41% over its Korean shares; conversely, the Korean shares trade at a discount of approximately 18.97% compared to the US ADRs.
SpaceX (SPCX) hit a post-listing low, falling $4.24 to $139.14.
Hedge fund manager George Noble stated that SpaceX's pre-IPO scarcity in the private market was the core factor supporting its high valuation. Following the IPO, this scarcity vanished, and the previously artificially created "short squeeze" was subsequently reversed. Noble noted that Starlink is SpaceX's only consistently profitable business, but this business alone is insufficient to support the company's current market value. He estimates SpaceX's fair value to be around $30 per share and called the company "the most egregious large-cap valuation bubble I've ever seen."
Among mega-cap tech stocks, Microsoft (MSFT) rose 1.53%, Amazon (AMZN) gained 0.80%, and Apple (AAPL) ticked up 0.63%. In terms of decliners, SpaceX fell 4.24%, Broadcom (AVGO) fell 3.98%, Nvidia (NVDA) fell 3.52%, Tesla (TSLA) fell 3.19%, TSMC (TSM) fell 2.89%, Meta Platforms (META) fell 1.86%, and Google (GOOGL) fell 1.31%.
[Source: FutuBull]
The Philadelphia Semiconductor Index fell 4.78% to 12,347.78 points, with all 30 of its constituents closing lower.
Memory stocks plummeted, with SanDisk (SNDK) plunging 12.63%, SK Hynix falling 9.32%, Seagate Technology (STX) dropping 5.46%, Western Digital (WDC) losing 4.64%, and Micron Technology (MU) down 4.32%.
Chinese concept stocks mostly declined, with Hesai (HSAI) down 6.37%, Kingsoft Cloud (KC) falling 4.77%, Baidu (BIDU) dropping 3.52%, and MINISO (MNSO) sliding 3.18%.
Corporate News
Intel Plans to Invest €5 Billion to Expand Irish Wafer Fab
Intel announced an additional €5 billion investment in Ireland, focusing on expanding chip production capacity related to AI infrastructure and further advancing its foundry business layout. It is reported that this investment will be used to upgrade its manufacturing campus in Leixlip, Ireland, with a primary focus on expanding Xeon server processor capacity and strengthening R&D capabilities.
12 U.S. States Jointly File Antitrust Lawsuit, Posing Major Obstacle to Paramount's Acquisition of Warner Bros.
Attorneys general from 12 U.S. states, including California, formally filed a lawsuit in federal court on Monday, seeking to block Skydance-Paramount's acquisition of Warner Bros. Discovery on antitrust grounds. Paramount responded by directly asserting that the lawsuit 'distorts the real competitive landscape of the current entertainment industry,' stating that it will vigorously defend itself to prove that the allegation neither aligns with competition policy principles nor reflects the reality of the media market. The plaintiffs' core argument centers on market concentration: the merged company would control nearly one-third of movie content and one-third of basic cable programming in the U.S., resulting in excessive market power. The states have requested that the parties refrain from closing the deal before the judicial proceedings conclude, warning that they will otherwise apply for a temporary restraining order to force a halt.
Meta Adds $40 Billion in Investment for Louisiana Data Center
Meta announced that it is increasing its investment in the Hyperion AI data center in Richland Parish, Louisiana, from the previous $10 billion to $50 billion, with the planned total capacity scaled up to 5 gigawatts (GW). The data center will deploy the industry's most cutting-edge computing clusters, making it one of Meta's largest AI training and inference hubs globally. According to the officially disclosed infrastructure plan, the project is expected to first reach 2 GW of computing capacity and begin operations before 2030, with the remaining capacity to be phased in gradually to achieve the final 5 GW expansion.
Industry & Macro News
Fed Governor Waller: May Support Near-Term Rate Hike If Core Inflation Remains Stubbornly High
Fed Governor Waller said that if subsequent economic data shows inflation remains significantly above the 2% policy target, the Federal Reserve may need to raise interest rates further in the near term, noting that monetary policy is currently at a critical "crossroads." He pointed out that the policy direction will be determined by the latest economic data, including the CPI report to be released on Tuesday. He does not advocate raising rates prematurely to avoid triggering a recession; however, he also emphasized that the current labor market is running smoothly and the Fed must avoid repeating the mistakes of several years ago—specifically, reacting too slowly and delaying action as price pressures built up.
Trump: U.S. Will Take Control of Strait of Hormuz, Levy 20% Fee on All Cargo Shipments
U.S. President Donald Trump said that the "blockade of Iran" initiative would be reinstated. From now on, the U.S. will be known as the "Guardian of the Strait of Hormuz," but as guardian, and in the interest of fairness, the U.S. will charge a 20% fee on all cargo shipments to offset all costs required to provide safety and security for this volatile region of the world.
U.S. to Blockade Iranian Ports Starting Today
The U.S. Navy-led Joint Maritime Information Center said the U.S. military will begin enforcing a naval blockade of all Iranian ports and coastal areas starting at 20:00 GMT on July 14. The blockade applies to all vessels, regardless of flag. The blockade covers the entire Iranian coastline, including but not limited to Iranian ports and oil terminals. The blockade will not impede the transit of neutral vessels traveling through the Strait of Hormuz to and from non-Iranian destinations. Shipments of humanitarian aid will be permitted to pass, subject to inspection.
IMF Warns: Europe Risks "Explosive" Danger If Debt Issues Are Left Unaddressed
The International Monetary Fund (IMF) stated that if the European region fails to effectively manage its public finances, its sovereign debt dynamics face a serious risk of spiraling out of control. Economists including Luc Eyraud, Mahika Gandhi, and Andrew Hodge wrote in a report released on Monday that with mounting challenges such as population aging, the energy transition, and rearmament, the "piecemeal" approach adopted by many countries has run its course.
Goldman Sachs: Earnings Growth Remains Driver of U.S. Stocks, But Fed Rate Hikes Would Impact in Three Ways
Goldman Sachs analysts said that earnings growth is likely to remain the primary driver of U.S. equities, even as a more hawkish Fed stance continues to pose a risk to the stock market. Goldman expects the Fed to keep interest rates unchanged this year but puts the probability of a rate hike at 25%. Goldman stated that a resumption of Fed rate hikes could impact the stock market in three ways. First, higher interest rates would weaken economic growth prospects, and history shows that economic growth is typically more important to stock market performance than interest rates themselves. Second, the current AI-led investment cycle is exceptionally capital-intensive, making companies more sensitive to higher borrowing costs. In addition, past Fed tightening cycles have often been accompanied by periods of weak stock market returns. "Whether the Fed raises rates or not, uncertainty surrounding the Fed's policy path will increase the risk of interest rate volatility, which would also act as a headwind for equities," the Goldman analysts said.
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