US credit markets are the most hawkish they’ve been in the last 2 years, pricing in one and probably two 0.25% rate hikes by Christmas - not that long since their last rate cut by 0.25% in Dec’25, the final move in an aggressive 1.75% easing cycle. Markets have increased rate hike expectations this month following hawkish Fed signals, renewed inflation concerns from higher oil prices, and rising long-term bond yields as heavy government borrowing increased. A cooler-than-anticipated inflation print (CPI) earlier in the month helped, but the oil price quickly became the overriding factor.
The week's most-watched ETFs tell a consistent story, the AI and semiconductor trade is cracking at the edges, inverse and bear products are seeing genuine retail interest for the first time in months, and international equity ETFs are absorbing record inflows as the broadening rotation away from US exceptionalism accelerates. However, funds continue to flow into stocks, with fund flows into active primary equity ETFs totalling more than US$17.5 billion for the week ending July 24, 2026.
US stocks rose on Tuesday, led by semiconductor stocks, as investors looked through the latest developments in the Iran conflict and shifted their focus to a solid start to the US earnings season. Industrial giant 3M jumped more than 7% after delivering a stronger-than-expected second-quarter result, while General Motors gained nearly 5% after beating earnings and revenue forecasts. The reporting season has begun strongly, with almost 88% of the 66 S&P 500 companies that have reported so far beating earnings expectations. Attention now turns to results from Alphabet, IBM and Tesla later this week.
The lithium trade has lost its mojo in the last few months, but we believe the demand side of the equation remains healthy for lithium as battery energy storage emerges as a 2nd pillar of lithium demand alongside EVs, driven by AI data centres and rising global investment in storage.
As we flagged in June, lithium supply is continuing to grow, with analysts divided on when the market will return to deficit—some expect 2026–27, while others don't see it until 2030. At MM, we remain bullish on the long-term structural drivers supporting spodumene and believe prices can ultimately move well above their 2026 highs. However, after the sector's strong gains over the past 12 months, this current pullback is understandable.
Equities have been volatile through 2025–26, unsettled by both the Liberation Day tariff shock and the US-Iran conflict, yet despite the relentless headlines, the ASX 200 has gained less than 1% since the start of 2025. However, on the stock and sector level in particular, volatility has been even more pronounced due to the combination of increased leverage and crowded positioning:
July has seen a tale of two halves for ETF flows: The month began with a sharp risk-off rotation as investors cut exposure to technology and AI, with the Nasdaq tracking QQQ losing ~US$11.5bn over four consecutive sessions, the S&P 500 tracking IVV shedding ~US$1.7bn, and software ETFs also suffering heavy redemptions. The standout exception was semiconductors, where SOXX attracted a record US$3.4bn in the week to 10 July, while US-listed ETFs remain on track for a record US$2tn of inflows in 2026.
The ASX 200 has now rallied from early losses to close near its highs for five consecutive sessions, after recovering an early 50-point deficit on Tuesday to end the session flat. The miners bounced strongly to close higher despite crude oil trading ~5% higher, with Evolution Mining (+3.2%), South32 (+2%), Regis Resources (+2%), Sandfire (+1.5%), and BHP Group (+0.6%) catching our eye as a slow but steady bid tone surfaced across the gold and copper names. These miners were helped by a recovery in gold (+0.5%) and copper (+1.5%) during our trading session as the $US edged lower ahead of the important US CPI inflation data.
The ASX 200 has now rallied from early losses to close near its highs for four straight sessions, a classic hallmark of a market with strong underlying buying support. The banks helped the market close higher on Monday, despite 60% of the main board closing lower, but overall it was a fairly lacklustre session considering the fresh US-Iran fighting, which sent US stock and bond futures lower as oil pushed back towards US$80/barrel. Again, we ignored sharp losses across the semiconductor space in Asia, but that’s no major surprise, given the dearth of major AI stocks on the ASX. Unfortunately, news out of the Middle East continued to deteriorate overnight:
The week's most-watched ETFs tell a consistent story, the AI and semiconductor trade is cracking at the edges, inverse and bear products are seeing genuine retail interest for the first time in months, and international equity ETFs are absorbing record inflows as the broadening rotation away from US exceptionalism accelerates. However, funds continue to flow into stocks, with fund flows into active primary equity ETFs totalling more than US$17.5 billion for the week ending July 24, 2026.
US stocks rose on Tuesday, led by semiconductor stocks, as investors looked through the latest developments in the Iran conflict and shifted their focus to a solid start to the US earnings season. Industrial giant 3M jumped more than 7% after delivering a stronger-than-expected second-quarter result, while General Motors gained nearly 5% after beating earnings and revenue forecasts. The reporting season has begun strongly, with almost 88% of the 66 S&P 500 companies that have reported so far beating earnings expectations. Attention now turns to results from Alphabet, IBM and Tesla later this week.
The lithium trade has lost its mojo in the last few months, but we believe the demand side of the equation remains healthy for lithium as battery energy storage emerges as a 2nd pillar of lithium demand alongside EVs, driven by AI data centres and rising global investment in storage.
As we flagged in June, lithium supply is continuing to grow, with analysts divided on when the market will return to deficit—some expect 2026–27, while others don't see it until 2030. At MM, we remain bullish on the long-term structural drivers supporting spodumene and believe prices can ultimately move well above their 2026 highs. However, after the sector's strong gains over the past 12 months, this current pullback is understandable.
Equities have been volatile through 2025–26, unsettled by both the Liberation Day tariff shock and the US-Iran conflict, yet despite the relentless headlines, the ASX 200 has gained less than 1% since the start of 2025. However, on the stock and sector level in particular, volatility has been even more pronounced due to the combination of increased leverage and crowded positioning:
July has seen a tale of two halves for ETF flows: The month began with a sharp risk-off rotation as investors cut exposure to technology and AI, with the Nasdaq tracking QQQ losing ~US$11.5bn over four consecutive sessions, the S&P 500 tracking IVV shedding ~US$1.7bn, and software ETFs also suffering heavy redemptions. The standout exception was semiconductors, where SOXX attracted a record US$3.4bn in the week to 10 July, while US-listed ETFs remain on track for a record US$2tn of inflows in 2026.
The ASX 200 has now rallied from early losses to close near its highs for five consecutive sessions, after recovering an early 50-point deficit on Tuesday to end the session flat. The miners bounced strongly to close higher despite crude oil trading ~5% higher, with Evolution Mining (+3.2%), South32 (+2%), Regis Resources (+2%), Sandfire (+1.5%), and BHP Group (+0.6%) catching our eye as a slow but steady bid tone surfaced across the gold and copper names. These miners were helped by a recovery in gold (+0.5%) and copper (+1.5%) during our trading session as the $US edged lower ahead of the important US CPI inflation data.
The ASX 200 has now rallied from early losses to close near its highs for four straight sessions, a classic hallmark of a market with strong underlying buying support. The banks helped the market close higher on Monday, despite 60% of the main board closing lower, but overall it was a fairly lacklustre session considering the fresh US-Iran fighting, which sent US stock and bond futures lower as oil pushed back towards US$80/barrel. Again, we ignored sharp losses across the semiconductor space in Asia, but that’s no major surprise, given the dearth of major AI stocks on the ASX. Unfortunately, news out of the Middle East continued to deteriorate overnight:
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