AI stocks lift Wall Street

Summary

Moving Markets – AI Stocks Lift Wall Street (July 7, 2026)

Episode Overview

This episode of Julius Baer’s “Moving Markets” podcast provides a succinct yet detailed update on the latest global market movements, with a particular focus on the recent surge in AI stocks that lifted Wall Street to new highs. Hosts Bernadette and Dareko are joined by Helen Freer for the market roundup, before turning to Carsten Menke, Head of Next Generation Research, for a thematic deep dive on El Niño’s economic impact, climate change, and food inflation.

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Key Discussion Points & Insights

1. U.S. Markets: Strong Start Driven by AI (00:35–02:14)

• Record Highs and AI Comeback
  • Major US indices opened the week on a high note; Dow Jones closed above 53,000 for the first time (00:40).
  • "Confidence was driven largely by AI related stocks which bounced back after last week's pull pullback." – Helen Freer (00:43)
  • Western Digital, Advanced Micro Devices, and Qualcomm each rose 6–7%. Six of the "Magnificent Seven" tech giants moved higher, with Tesla up almost 7%. Microsoft was the exception, down 1% following restructuring news (00:53).
• Microsoft Job Cuts
  • Microsoft is cutting ~4,800 positions as it reallocates resources toward AI infrastructure (01:22).
  • "Microsoft Shares lost around 1% yesterday." – Helen Freer (01:41)
• Broadcom & Apple Partnership
  • Extension of the Apple–Broadcom partnership pleased investors, dispelling fears of Apple reducing business with Broadcom.
  • "Broadcom shares finished the day up 3.7%." – Helen Freer (01:49)
• US Economic Data
  • June US ISM Services Index dipped to 54.0 but remains in expansion, with business activity and new orders moderating but still showing solid demand (02:14).

2. European Markets: Pullback After Record Highs (02:33–03:34)

• Broad-based declines with the Stoxx 600 slipping after a record-breaking streak; profit taking evident across utilities, healthcare, and food/beverage sectors (02:38).
• Exception: Germany’s DAX rose 0.15% and notched a record close, thanks to robust industrial orders (02:56).
• EasyJet Takeover
  • "Shares in EasyJet soared, ending the day up over 9% after the company agreed to a proposed takeover by the US Private equity firm Castle Lake." – Helen Freer (03:20)
  • Deal values the airline at up to £5.5bn.

3. Asia: Market Turmoil, Especially in Korea (03:34–04:14)

• Broad losses across Asia, with the exception of Indian stocks (03:38).
• South Korea’s Kospi plunged up to 8% intraday, prompting a trading halt. Big drop in Samsung Electronics (down nearly 10% despite strong profit guidance) and SK Hynix (down >10% ahead of US listing).
• "Two of the big fallers in Asia today are Samsung Electronics... and SK Hynix..." – Helen Freer (03:52)

4. Commodities: Oil Prices Stable Amid Geopolitics (04:14–04:51)

• Despite Middle East tensions, oil prices held steady.
  • "Several factors are at play with Saudi Arabia lowering its official selling prices, OPEC approving another production increase over the weekend, and exports through the Strait of Hormuz have increased." – Helen Freer (04:25)
• An oil tanker was hit near the Strait; prices up slightly in early US trade.

5. What’s Ahead: Market Catalysts & Key Events (04:51–05:54)

• Fed Minutes: Release of June FOMC minutes (first under Chair Kevin Walsh) expected to be closely watched, though not much policy guidance anticipated (04:59).
• NATO Summit: President Trump attending.
• Q2 Earnings Season: Kicks off later this week.
• Data Drops: German industrial production/BoE financial stability report.
• Futures: US and European futures in the red; SpaceX down 1% ahead of NASDAQ 100 inclusion.

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Special Segment: El Niño, Climate Change & Food Inflation (06:11–09:51)

Explainer: What is El Niño? (06:15–07:20)

• Carsten Menke recaps that El Niño is a major climate phenomenon characterized by weakened Pacific trade winds and warmer seas off South America (06:29). It triggers global disruptions:
  • Drier conditions in Australia, southern Asia, northern Latin America, and southern Africa
  • Wetter weather in western Africa, northeast Asia, and the southern US
  • "El Nino is impacting the weather globally, and it is generally associated with warmer than average temperatures." – Carsten Menke (06:35)
  • Fewer hurricanes, but more blizzards possible

Food Inflation Insights (07:20–08:56)

• Evidence is mixed regarding El Niño’s direct impact on global food prices.
• Only the 1982 event correlated with rapid food price rises; often, droughts not linked to El Niño or energy prices have played a larger role in food inflation (07:34).
  • "There is no clear evidence of El Nino structurally pushing up food prices." – Carsten Menke (07:36)
• Bulk Agriculture Markets (corn/soy/wheat):
  • "El Niño typically does not significantly impact bulk agriculture markets... There is one notable exception. That's rice." (08:24)
  • Rice is more volatile due to protectionism, but overall food inflation is driven by larger markets.
• Bulk markets are feeling the real bite from broader climate change, not necessarily El Niño specifically.

The Bigger Picture: Climate Change & ‘Climateflation’ (08:56–09:44)

• Extreme weather events from climate change risk making food and energy prices more volatile, though it’s unclear if this means structurally higher prices long-term (09:15).
• "I think with extreme weather risks on the rise due to climate change, climateflation could become more prominent. But the jury is still out if this just means more volatile or lastingly higher food prices." – Carsten Menke (09:15)
• Climateflation is wider than food. It affects energy, infrastructure costs, and more.

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Notable Quotes & Memorable Moments

• On AI-powered market rallies:
  "Confidence was driven largely by AI related stocks which bounced back after last week's pull pullback."
  — Helen Freer (00:43)
• On Microsoft pivoting to AI:
  "Like many tech giants, they're shifting resources towards artificial intelligence infrastructure..."
  — Helen Freer (01:27)
• On food inflation myths:
  "There is no clear evidence of El Nino structurally pushing up food prices."
  — Carsten Menke (07:36)
• On climate change and volatility:
  "Climateflation is not only about food, but it is much broader also, including temporarily rising power prices or the costs to adapt our cities to rising temperatures."
  — Carsten Menke (09:32)

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Important Timestamps

• 00:35 – Start of market update with Helen Freer
• 01:22 – Microsoft’s restructuring and the market reaction
• 01:49 – Broadcom and Apple’s partnership extension impact
• 02:14 – US ISM Services data
• 02:38 – European market wrap and EasyJet deal
• 03:38 – Asia market declines: Kospi, Samsung, SK Hynix
• 04:23 – Oil market update amid geopolitical tension
• 04:59 – Upcoming events: Fed minutes, NATO summit, earnings
• 06:15 – Carsten Menke introduces El Niño
• 07:34 – El Niño’s historical connection to food inflation
• 08:24 – Rice as a notable exception in El Niño’s impact
• 09:15 – Climate change and the future of ‘climateflation’

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Tone & Language

The episode maintains Julius Baer’s professional, informative, and analytical tone, blending concise reporting with nuanced economic viewpoints. Speakers attribute opinions clearly, avoid investment advice, and spotlight caution on interpreting data patterns.

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Conclusion

This episode is packed with actionable market insight—especially around the dynamic forces behind the Wall Street AI rally and how global weather events could (or might not) sway food inflation and broader ‘climateflation’. Helen Freer’s and Carsten Menke’s commentary strikes a balance between real-time market color and big-picture perspective, making this recap essential for anyone tracking investment themes in 2026.

Transcript

[A]

Welcome to Julius Baer's Moving Markets podcast on Tuesday 7th July with me, Bernadette and Dareko. I'm looking forward to catching up on the latest financial markets news with my colleague Helen Freer this morning. And then we're going to be joined by our head of Next Generation Research, Carsten Menke, to discuss El Nino and its impact, climate change and food inflation in scope there. So stay tuned for that. Now though, let's catch up with what's been going on in markets in the last 24 hours. Good morning to you, Helen.

[B]

Good morning, Bernadette.

[A]

Why don't we begin with the U.S. overall, it was a positive start to the week for US Markets, wasn't it?

[B]

Yes. Stocks got the week off to a strong start with major US Indices finishing higher. And the Dow Jones actually hit a fresh record high Yesterday, closing above 53,000 for the first time. Confidence was driven largely by AI related stocks which bounced back after last week's pull pullback. Western Digital, Advanced Micro Devices and Qualcomm all posted Strong gains between 6 and 7%. Six of the Magnificent Seven stocks moved higher with Tesla leading the way. That climbed nearly 7%. The one exception in the Magnificent Seven was Microsoft.

[A]

Yes, and that's because they announced substantial job cuts. Right. So what was behind this decision, Helen?

[B]

Yes, Microsoft is restructuring, reducing its workforce by around 4800 positions according to the announcement yesterday. Like many tech giants, they're shifting resources towards artificial intelligence infrastructure. And the market reacted negatively. Microsoft Shares lost around 1% yesterday.

[A]

And there was some other news, wasn't there, from Broadcom and Apple. They announced an extension to their partnership. How did the market react to this?

[B]

Very positively. Broadcom's shares jumped after the announcement. I mean, this does alleviate some concerns around Apple diversifying away from the chip maker and ensures quite a stable revenue stream for Broadcom Broadcom in the years to come. And this kind of certainty is always welcomed by investors. So Broadcom shares finished the day up 3.7%.

[A]

All right, we also got some data in the U.S. yesterday, right?

[B]

Yes, we did. The U.S. iSM Services Index fell by 0.5 points to 54.0 in June. But that's still very much in expansion territory. Measures of business activity and new orders moderated, but continued to show a solid level of demand.

[A]

All right, let's talk about European markets now, where there was a bit of a different picture yesterday, wasn't there?

[B]

That's right, there was. Unlike in the US most major European indices closed lower yesterday. The Stoxx 600 saw a slight pullback after reaching a record high earlier in the day. Some profit taking was clearly happening after a strong week last week, in terms of sectors, it was utilities, healthcare, and food and beverages that weighed heavily on the index. Interestingly, Germany's DAX index managed buck the Trend, closing up 0.15%, hitting a record high. And this was driven in part by unexpectedly strong industrial order numbers.

[A]

Yeah, and I saw that EasyJet was one of the best performing stocks yesterday. What's the story there, Helen?

[B]

Exactly. Shares in EasyJet soared, ending the day up over 9% after the company agreed to a proposed takeover by the US Private equity firm Castle Lake. The deal values the airline at up to 5.5 billion pounds.

[A]

Okay, let's turn to Asia. What's happening there this morning?

[B]

Well, with the exception of Indian equities, it's a sea of red in Asian markets this morning. South Korea's Kospi is leading the declines. When I last looked, the Kospi was down around 5%, but earlier in the day, it was down more than 8%, which triggered a trading halt in the index. In terms of stocks, two of the big fallers in Asia today are Samsung Electronics, which lost nearly 10% despite forecasting record second second quarter operating profit, and SK Hynix, which lost more than 10% as it prepares for its US listing later this week.

[A]

Okay, let's talk about commodities now, especially oil, because oil prices remained relatively stable despite geopolitical tensions. Why is that?

[B]

Yes, so despite the ongoing concerns in the Middle east, oil prices didn't see a dramatic spike yesterday. Several factors are at play with Saudi Arabia lowering its official selling prices, OPEC approving another production increase over the weekend, and exports through the Strait of Hormuz have increased. Prices are up a bit in early trading today, though, amid concerns over renewed tensions in the Middle east after an oil tanker was hit near the Strait of Hormuz.

[A]

Okay, we'll have to watch out for more news on that story. But looking ahead then, Helen, what key events are on the horizon that investors need to be aware of?

[B]

Tomorrow, all eyes will be on the release of the Federal Reserve's meeting minutes from June. This was, of course, the first meeting under the new chairman, Kevin Walsh. So investors will be looking for any clues about the future path of US Monetary policy, although as WASH explicitly avoided policy guidance in the statement and press conference. We're not sure how much detail we're going to get in the minutes, but we'll find out tomorrow. Beyond that, the NATO summit is taking place. President Trump will be in attendance. The second quarter earnings season kicks off later this week, and today we'll be getting German industrial production data for May, as well as the bank of England's financial stability Report. And just quickly to finish, U.S. and European futures are currently in the red. And I'll just mention one stock in particular, and that's SpaceX, which is down around 1% ahead of it entering the NASDAQ 100 today. That's it from me. Bernadette, back to you.

[A]

Super Helen. Well, we might be celebrating four years of moving markets being on air, but I can't believe it's been three and a half years since you delivered the news on the podcast. As you've been so busy hosting it, I'd never have known. Well done.

[B]

Thank you, Bernadette. Thanks for having me.

[A]

And now it's time to talk to Carsten. Good morning to you.

[C]

Hello, Bernadette. Good morning.

[A]

So, Carsten, the World Meteorological Organization is warning that the world is about to face a strong El Nino this summer. Before we delve into any potential economic consequences, perhaps you could quickly remind us all what El Nino actually is.

[C]

Sure. So, El Nino is a naturally occurring climate pattern that is caused by a softening of the trade winds in the tropical Pacific. This leads to a slowing of the currents between Southeast Asia and South America, and as a result, water temperatures off the coast of South America rise significantly. El Nino is impacting the weather globally, and it is generally associated with warmer than average temperatures. It causes drier conditions in Australia, Southern Asia, northern Latin America and Southern Africa, threatening harvests and affecting economic activity. At the same time, it causes wetter conditions in Western Africa, Northeast Asia, and across the southern parts of the US Resulting in fewer hurricanes, but more blizzards eventually.

[A]

Okay, you already mentioned it. There'll likely be droughts in some parts of the world impacting agricultural production. And that, of course, brings us to the topic of food inflation. Do we need to fear rising food prices because of El Nino?

[C]

Well, looking back, there is no clear evidence of El Nino structurally pushing up food prices. The strongest occurrences of El nino were in 1982, 1997 and 2015. But only the first one led to a rapid rise in food prices. More important is the mix of factors that impact agricultural production in the world. So non El Nino related droughts pushed prices up between 40% and 90% in 1995, 2010, or 2020, while energy prices, as an input cost, did the same in 1981, 2007, or 2022.

[A]

Okay, so that's an interesting point. What you're saying is that we shouldn't focus on these single El Nino events, but rather the broader impact of climate change on agriculture.

[C]

Exactly. And this is also because El Nino typically does not significantly impact bulk agriculture markets such as corn, soybeans, or wheat. There is one notable exception. That's rice. But rice is a market of its own, also due to very high trade barriers, which often amplifies the effect of rising prices. El Nino primarily impacts smaller markets such as cocoa and coffee, which do not matter when it comes to the topic of food inflation.

[A]

And these bulk markets, they are impacted by climate change, aren't they?

[C]

Yes, of course. So take the US Midwest, take the Black Black Sea region, or take Mato Grosso in Brazil. These major growing regions all experience the impact of climate change.

[A]

Okay then. So what does this mean for food prices?

[C]

Well, I think with extreme weather risks on the rise due to climate change, climateflation could become more prominent. But the jury is still out if this just means more volatile or lastingly higher food prices. And also, very importantly, climateflation is not only about food, but it is much broader also, including temporarily rising power prices due to increased cooling needs or the costs to adapt our cities to rising temperatures, as we discussed last week.

[A]

Indeed, Carlsten, and I'm sure we'll have you on in the future about this, given that we've got more heat waves coming. Meanwhile, thank you very much for joining us today.

[C]

Thanks for having me.

[A]

Well, that's it for today's podcast. Thank you all for listening, and of course, thank you to Helen and Carsten for joining me today. Please tune in again tomorrow when Roman Canciani will be your host, and he'll be talking to more of our experts to bring you up to speed on what's moving markets. So don't miss out on that. Meanwhile, good luck today and goodbye for now.

[B]

The information and opinions expressed in this podcast constitute marketing material and are not the result of independent financial or investment research. Please refer to www.juliusbear.com legal podcasts for further other important legal information.