Overview:

Global markets showed mixed signals Thursday amid shifting monetary policy expectations and geopolitical tensions. Taiwan Semiconductor Manufacturing Company delivered exceptional second-quarter earnings growth, while energy prices climbed on supply concerns and Middle East escalation fears. Saudi Arabia's inflation remained stable at 1.8 percent in June, though wholesale prices rose 4.8 percent annually. Markets across Asia retreated, with Japan's Nikkei 225 index declining 3.1 percent.

Details:

Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, reported net profit surging 77 percent in the second quarter, fueled by robust demand for artificial intelligence semiconductors. The company has become a critical beneficiary of the global AI expansion, as major technology firms increase chip orders for artificial intelligence applications.

Oil prices continued their upward trajectory for the fourth consecutive day, with Brent crude advancing to 85.95 dollars per barrel on supply disruption concerns. Geopolitical tensions in the Middle East and reports of maritime confrontations between major powers supported energy prices. Conversely, gold prices weakened, falling 0.6 percent to 4,034.42 dollars per ounce amid reduced safe-haven demand.

The U.S. dollar approached its weakest levels in approximately one month as weak inflation data reinforced expectations that the Federal Reserve may pause interest rate increases. The Federal Reserve Bank of New York chairman indicated that inflation likely peaked this year, suggesting the current monetary policy stance remains appropriately calibrated. Meanwhile, South Korea's central bank raised its base interest rate to 2.75 percent, tightening regional monetary conditions. Saudi Arabia's holdings of U.S. Treasury securities increased by 181 million dollars in May 2026, reaching 140.3 billion dollars.

Outlook:

Investors are closely monitoring U.S. inflation data releases and Federal Reserve policy signals. Deteriorating geopolitical conditions and supply chain vulnerabilities pose significant risks to oil markets and broader economic stability. The divergence between semiconductor sector strength and industrial sector weakness in developed economies warrants continued attention.