Market Pulse — Thursday, 2 July 2026

Global Cross-Asset Daily

Meta turned spare capacity into a business. A report that Meta will sell its excess artificial-intelligence computing power as a cloud service — recovering capital spending and taking on the big cloud providers — sent the stock sharply higher and lifted Communication Services 2.44%. For the chipmakers it cut two ways: spare capacity points to slower incremental orders, monetisation argues for more, and unable to price the direction, investors trimmed the year’s most crowded trade, sending Technology down 2.57%. That was enough to pull the S&P 500 down 0.19% and the Nasdaq 0.66% even as seven of eleven sectors rose. Money rotated into Financials (+2.17%) and cyclicals, the Dow touched a fresh intraday record, yields backed up, and Bitcoin bounced 2.29% off a new low. We read a rotation within a maturing AI trade, not a retreat from it.

§ 01 — Equities · United States

A split inside technology, not a broad retreat. The S&P 500 fell 0.19% and the Nasdaq 0.66% as the chip names dropped, while the Dow was flat, off 0.03%, and the Russell 2000 eased 0.39%. The weakness was narrow: Meta jumped on its cloud plan while the semiconductors, the year’s most crowded trade, were sold on an ambiguous read-through, and because both carry heavy index weight the cap-weighted averages slipped even as most stocks rose. The trend underneath is intact — every US index is higher on the week, led by the Nasdaq at +3.72%, and on the year the Russell leads at +21.38% ahead of the Nasdaq’s +12.04% and the S&P’s +9.34%. We read a rotation within the leaders, not a de-risking.

§ 02 — S&P 500 Sector Map

Wednesday 1 Jul · sorted best to worst (1D)

Communications led, chips lagged, the rest rose. Seven of the eleven sectors advanced on Wednesday, led by Communication Services (+2.44%), which carries Meta, and Financials (+2.17%), with Consumer Discretionary up 0.69%; only four fell, headed by Technology (-2.57%), home to the semiconductors, with Utilities (-1.26%), Industrials (-1.01%) and Energy (-0.56%). The index closed lower only because the loss sat in its heaviest weight. On the year Technology still leads at +28.93%, ahead of Industrials (+18.21%) and Energy (+18.12%), while Communication Services (-6.78%) and Consumer Discretionary (-1.11%) remain the only sectors in the red. We read the day as a rotation within growth and toward value, not a top.

Full table · sorted by YTD

§ 03 — Equities · Global

European indices reference the Wednesday 1 July close via the FMP end-of-day series. Asian indices use FMP end-of-day closes for Wednesday 1 July, because at the 08:00 SGT run those markets have reopened for Thursday and the live series is intraday-contaminated. Hong Kong was closed Wednesday for the SAR Establishment Day holiday, so the Hang Seng references its Tuesday 30 June close. One-week moves compare with the close five sessions earlier; year-to-date uses each market’s last 2025 close.

Asia’s chip split will meet a US chip wobble. Taiwan’s TAIEX rose 1.94% on Wednesday and Korea’s KOSPI fell 2.04%, the semiconductor trade already diverging across the strait before the US signal landed; both still lead the world for the year, the KOSPI up 97.04% and the TAIEX 62.34%. Japan’s Nikkei added 0.59% on a softer yen and is up 40.00%. Europe was mixed and quiet, the DAX up 0.17% while the STOXX 600 slipped 0.38%; Hong Kong was closed for a holiday. Because Korea and Taiwan are the purest read on artificial-intelligence hardware, we expect them to register Wednesday’s pullback in US chipmakers when they reopen, and to stay the sharpest gauge of whether the hyperscalers’ drive for efficiency trims merchant chip demand.

§ 04 — US Treasuries

3.5% 4.0% 4.5% 5.0% 6M 2Y 5Y 10Y 20Y 30Y

Yields rose, and the curve steepened as they did. Treasuries sold off on Wednesday, the 30-year up 6 basis points to 4.97% and the 10-year 4 to 4.48%, against a 3 basis point rise at the 2-year — a bear steepening that left the gap between 2s and 10s at 31 basis points. The week showed the same shape, the 30-year up 11 basis points and the 2-year 6. On the year the front end still leads, the 2-year up 70 basis points against 13 at the 30-year, a hawkish repricing that has flattened the curve since January. The steeper day-to-day curve and higher long yields are part of why banks caught a bid as chips fell. We read Thursday’s payrolls as the test of whether the front end climbs again.

§ 05 — Credit Spreads

The top of the credit stack shrugged; the bottom did not. Investment grade and BBB spreads were unchanged at 76 and 95 basis points and high yield tightened 5 to 275, so the broad credit market took the equity rotation in stride. The exception sits at the riskiest tier: CCC and lower widened 3 basis points on the day and 14 on the week, to 970, and is 85 wider on the year while every other tier is flat to tighter. That divergence — a calm index against a slow bleed in the lowest-quality debt — is the kind of signal that tends to lead. We keep it on the watch list as the clearest sign that risk appetite is thinning at the edges.

Credit spreads are FRED ICE BofA option-adjusted spreads (IG BAMLC0A0CM, BBB BAMLC0A4CBBB, HY BAMLH0A0HYM2, CCC & Lower BAMLH0A3HYC) as of the 30 June close, one session behind the equity data. Widening (positive bp) reads as stress.

§ 06 — Digital Assets

An oversold bounce, not a turn. Bitcoin rose 2.29% and Ether 2.23% on Wednesday after Bitcoin printed a fresh low for the year earlier in the session; both remain deeply negative on the year, Bitcoin down 31.55% and Ether 45.91%. Solana led the recovery, up 5.21% on the day and 14.40% on the week. The rebound arrived on a soft session for the Nasdaq, which fits Bitcoin’s loose link to equities — closest to the Nasdaq at about 0.5 and to the Dow at about 0.4 — and looks like short covering rather than fresh demand: spot Bitcoin exchange-traded funds have been redeeming heavily, and until those flows turn, we would treat rallies as suspect and wait for a floor to form.

Bitcoin’s equity correlation reflects the historical daily-return pattern — closest to the Nasdaq at about 0.5 and loosest to the Dow at about 0.4. Spot levels are FMP quote fields at the run-time snapshot; the daily, weekly and year-to-date moves are the FMP price-change series. Crypto trades continuously, so its daily change covers a different window from the equity close. Exchange-traded-fund flow context is from press reporting, not a price figure.

§ 07 — Metals & Energy

Crude surrendered the week; metals stayed soft. Oil slipped again on Wednesday, WTI down 2.43% to $67.86 and Brent 0.88% to $70.99, and both are sharply lower on the week — WTI off 5.08% and Brent 5.34% — as the geopolitical risk premium keeps draining. Even so crude is the year’s leader, WTI up 18.09% and Brent 16.58%. Gold fell 0.83% and is down 6.74% on the year; silver lost 1.46% on the day but holds a 2.77% weekly gain; copper eased 1.57% yet is up 8.34% on the year, the one metal that trades on growth rather than fear. We read softer energy as a modest tailwind for the inflation data ahead.

§ 08 — Economic Calendar

US release times Eastern; overseas releases shown in local-market timing. Consensus and priors are FMP-sourced. The marquee release is Thursday's US June jobs report, where consensus looks for just 110K payrolls after 172K, with unemployment steady at 4.3%.

One print, then a shortened week. June payrolls land Thursday, moved a day earlier by Friday’s Independence Day close, with consensus near 110K after 172K and unemployment steady at 4.3%. Read it carefully: a possible boost from World Cup hiring could flatter the headline, so the unemployment rate and wages may carry more information than the payroll count. A soft report would extend the rotation and support lower front-end yields; a firm one would revive the rate selloff and pressure rate-sensitive sectors. Monday’s ISM services and Wednesday’s Fed minutes round out a thin week where any surprise travels further than usual.

§ 09 — Macro Themes

1 · Meta reframed the capital-spending debate. Selling spare compute rather than leaving it idle suggests the artificial-intelligence build-out can pay for itself — a maturing capital cycle, not a bursting one. The stock jumped and Communication Services led at +2.44%. For the chipmakers it cuts both ways: spare capacity implies slower incremental orders, monetisation implies more spending, and that unresolved tension on a richly valued trade is what prompted the profit-taking.

2 · The rotation, not the dip, is the story. A 0.19% dip in the S&P 500 with seven of eleven sectors higher shows money moving out of the crowded semiconductor trade and into communications, banks and cyclicals rather than leaving the market. A broader advance is a healthier one — provided the chip leaders, up 28.93% on the year, do not break.

3 · Rates and the jobs number are the near-term swing factor. Yields backed up across the curve, the 2-year up 70 basis points on the year, and Wednesday’s steepening helped the banks. Thursday’s payrolls, distorted or not, decides whether the front end resumes its climb and whether the rotation runs.

§ 10 — Analysis & Nuances

Meta made the AI build-out look like a business, and the market could not price which way it cuts. The plan to sell excess computing capacity as a cloud service is the first sign a hyperscaler can turn AI spending into third-party revenue; the market took it as validation, and Meta jumped while Communication Services led at +2.44%. For the chipmakers the signal is genuinely two-sided — spare capacity to rent points to slower incremental orders, yet monetisation improves the payback on the hardware and argues for more — so investors did not re-rate the group, they trimmed the year’s most crowded trade, and Technology fell 2.57%. This is a rotation within the artificial-intelligence trade, not an exit. We expect Thursday’s payrolls to set the near-term tone — a soft print near 110K eases the front end and lets the broadening run, a strong one revives the rate selloff — while the durable question is who captures the economics of AI infrastructure.

Rotate with the market, but lift quality as you do. The broadening on Wednesday is the advance investors have asked for, and it is worth participating in. But two edge signals argue against reaching for the riskiest corners while doing so: CCC and lower credit is 85 basis points wider on the year and 14 on the week, to 970, and Bitcoin is down 31.55% on the year despite a 2.29% bounce, with funds still redeeming. Neither is systemic, yet both tend to move before the broad market does. We would add to the cyclicals and financials that are leading the rotation, keep balance-sheet quality high, and let the jobs report rather than the day’s headlines frame the second half.

FAIRCURVE · MARKET PULSE · 02 JUL 2026 · Data via Financial Modeling Prep MCP (quote / price-change, end-of-day index charts, treasury-rates, economics calendar, news) and FRED (ICE BofA OAS credit spreads). US equities, sectors and European indices reference the Wednesday 1 July 2026 session via the FMP price-change and end-of-day series (1D / five-day / year-to-date); Asian indices use FMP end-of-day closes for Wednesday 1 July, because at the 08:00 SGT run those markets have reopened for Thursday and the live series is intraday-contaminated. Hong Kong was closed Wednesday for a public holiday, so the Hang Seng references its Tuesday 30 June close. One-week changes use the five-session window; year-to-date uses each market’s last 2025 close. UST yields are the FMP treasury-rates series (Wednesday 1 July). Credit spreads are FRED ICE BofA OAS as of the 30 June close, one session behind the equity data. Crypto and commodity levels reflect the run-time snapshot. US calendar times Eastern; overseas releases in local timing. Singapore time zone. Not investment advice; for informational use only.