Geopolitical tensions escalated as U.S. forces launched strikes against Iran following missile attacks, sending oil prices higher. Meanwhile, the U.S. Federal Reserve held interest rates steady amidst internal debate, causing fluctuations in Treasury yields.
In the tech sector, Samsung Electronics reported record profits driven by AI demand, while Chinese AI supplier Zhongji Innolight saw a subdued market debut.
Hello, this is Hui Jie writing to you from Singapore, filling in for Leonie.
Tensions in the Middle East are heating up again. U.S. forces hit Iran late Wednesday stateside, after President Donald Trump's threat to give Tehran a "beating."
The Fed is witnessing a "fight" of its own after keeping rates steady, while Asian investors are assessing a results beat by Samsung Electronics.
What you need to know today
The geopolitical temperature is on the rise, and not because of the heatwaves that are sweeping Europe.
U.S. forces completed a "heavy wave" of strikes against Iran at 10 p.m. Wednesday ET, in retaliation against Iranian missile attacks on American forces in the region. This comes after President Donald Trump — with some very colourful language on Fox News — threatened to give Iran a "beating" for its attacks.
Oil markets were definitely showing some signs of fear, with Brent climbing 2.09% Thursday to $92.64 a barrel and U.S. West Texas Intermediate up 1.46% to 85.66.
Elsewhere, the Fed had a "family fight" as it opted to hold rates steady at 3.5%-3.75% in a 9-3 split decision, with Fed chairman Kevin Warsh saying: "I asked for a good family fight, and I got one. That's the purpose. That's the design feature."
After the press conference, the yield on the 30-year Treasury hit its highest level since 2007, while the yield on the 2-year Treasury fell. The chances that the Fed would leave interest rates unchanged at its next meeting jumped by 20 percentage points to 45%, according to CME FedWatch.
Analysts said that Warsh's lack of reasoning as to why he and 8 other board members opted to keep rates where they are in the face of rising inflation could risk his credibility.
AI prospects
Over in Asia, investors kept an eye on chip heavyweight Samsung Electronics. The company delivered another quarter of record operating profits, as robust AI demand continues to drive growth in its memory chip business.
The company cited AI server demand as the key driver for its record-breaking memory earnings, which helped it achieve all-time high DRAM and NAND sales.
In Hong Kong, Chinese AI supplier Zhongji Innolight made its market debut, but investor reception was lukewarm, with shares falling 2.3%.
The company raised HK$53.4 billion ($6.8 billion) after pricing its initial public offering at HK$980 per share, below the maximum indicated price of HK$1,010.
The deal was Asia's second-largest listing this year, behind Chinese memory-chip maker CXMT's $8.6 billion Shanghai listing.
And finally...
Here’s why Europe’s hot summers are becoming an expensive challenge
Europe's increasingly extreme summers are becoming an economic problem, with more frequent heatwaves driving up costs, disrupting businesses and weighing on growth.
Huge wildfires have been raging in France and Spain, burning 300,000 acres and forcing the evacuation of 300,000 people. The scenes echo last year's Los Angeles wildfires, when blazes overwhelmed firefighting resources, triggered mass evacuations and destroyed thousands of homes.
A World Meteorological Organization (WMO) report looking at Europe in 2025 noted the continent had "seen increased wildfire potential ... with a growing number of larger fires and an extended fire season. Western Europe recorded its hottest June ever this year, per the WMO.
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