SG Morning Brief | Three-Day Selloff Deepens but Chips and China Tech Buck the Trend

US Overnight

The S&P 500 fell 0.19% to 7,443.28, the Nasdaq dipped 0.05% to 25,508.07, and the Dow dropped 307.16 points (-0.59%) to 51,839.26 — all three posting a third consecutive decline and closing at their lowest levels in at least three weeks. The losses came as the US completed its ninth consecutive day of strikes on Iran, though Iranian Foreign Ministry spokesman Esmaeil Baghaei lifted hopes by telling reporters that intermediaries had continued exchanging messages and negotiations "could be pursued." Apple fell over 2%, the biggest drag on the S&P 500, while Microsoft rose over 2% — the biggest boost. Intel announced over 5,000 US layoffs as part of a broader restructuring. Despite the index-level weakness, the session featured a notable split: chips and Chinese ADRs rallied against the trend while defensive sectors lagged.

Key Movers

Chips snapped 3-day losing streak — The SOX reversed its three-session slide as dip-buyers returned following last week's bear market entry. SanDisk gained nearly 3%, Micron and Broadcom each rose roughly 2%, and Nvidia rebounded. The semiconductor rally was insufficient to pull the Nasdaq into the green but signals that the 20%+ correction may be finding a floor ahead of ASML's earnings tomorrow.

Alibaba (BABA) +5% — Alibaba surged nearly 5%, leading the Nasdaq Golden Dragon China Index up 0.9%. GDS Holdings gained over 3%. The China tech rally reflects continued optimism around the Apple-Alibaba AI partnership in China and the broader repricing of Chinese cloud infrastructure names as US-China tensions take a backseat to the Iran conflict. Chinese ADRs have now posted gains in four of the last five sessions.

Apple (AAPL) -2% / Tesla (TSLA) -3% — The Magnificent Seven was split three ways: Apple fell over 2% and Tesla dropped nearly 3%, dragging the Dow lower. Microsoft gained over 2% and Alphabet rose 1.5%, with Nvidia also rebounding. The divergence reflects stock-specific catalysts — Apple faces margin pressure from memory costs and Tesla is dealing with delivery uncertainty — rather than a blanket tech selloff.

SGX Preview

The STI was near 5,070. DBS near S$62.18, UOB near S$37.91. The chip rebound is constructive for Venture Corp after last week's SOX bear market entry. Alibaba's continued strength supports Singapore investors with China exposure. The Dow's 307-point drop on oil-driven geopolitical fears remains a headwind. Tomorrow's ASML earnings are the single most important catalyst for the semiconductor trade this week — a strong report could confirm the SOX correction is over.

Asia Pre-Market

Oil remains elevated on the US-Iran conflict (ninth straight day of strikes). The Iranian FM's comments about continued negotiations provide a modest positive signal, but no ceasefire is imminent. The Nasdaq's minimal 0.05% decline — versus the Dow's 0.59% loss — shows tech held up relatively well despite the headline fear.

Today's US Earnings and Economic Calendar

Earnings Spotlight: ASML (Tomorrow) — ASML raised its 2026 guidance two weeks ago, citing strengthening demand for EUV lithography tools. But the stock has fallen since amid the broader semiconductor rout. If ASML reports strong order intake and reaffirms guidance, it could mark the turning point for the chip correction — equipment orders are the most forward-looking indicator of AI capex. If ASML flags any softening, particularly in the context of Reuters' report that TSMC asked suppliers to delay shipments, the bear market extends.

One More Thing

The Nasdaq fell 0.05% on a day the US bombed Iran for the ninth time. That is remarkable resilience. Six months ago, a single Hormuz headline could move the index 3%. Today, nine consecutive days of strikes produce a rounding error. The market has desensitized to the conflict — it is now a background variable rather than a catalyst. What moves stocks now is earnings, not geopolitics. ASML tomorrow, Tesla Thursday, Alphabet next Tuesday. The chip bear market will end when one of these names delivers guidance strong enough to break the sell-the-beat pattern that has punished Samsung, TSMC, and SK Hynix. Until then, the SOX trades on positioning, and the broad market trades on hope that the Iran strikes eventually lead to talks rather than escalation.

This briefing is for informational purposes only and does not constitute investment advice.