US-Iran de-escalation and South Korea’s USD 1.3 trillion spending plan

Summary

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Moving Markets – June 29, 2026

Episode Theme:
US-Iran De-escalation and South Korea’s USD 1.3 Trillion Spending Plan

In this episode, host Helen Freer is joined by colleagues Jan Bopp (Market News), Markus Wachter (Technical Analysis), and Richard Tang (Asian Equity Markets) to unpack:

• The market impact of US-Iran de-escalation
• South Korea’s massive semiconductor investment plans
• Broad equity market moves, sector shifts, and technical outlooks across regions
• Geopolitical influences, currency dynamics, and what to watch this crucial week

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Episode Overview

The main theme revolves around fast-moving global market dynamics heading into the final days of June 2026, highlighted by a temporary easing in Middle East tensions, a significant investment announcement from South Korea’s tech giants, shifting equity flows, and key risks and opportunities for the week ahead. The show offers a succinct yet nuanced look at how headlines—from geopolitics to chip stocks—are influencing markets and investor behavior.

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Key Discussion Points & Insights

1. Global Equity Markets: Tech-Led Retreat, Sector Rotation

With Jan Bopp (Market News) – [01:09–06:38]

• Recent Sell-off in Tech:
  Tech stocks, particularly chip makers, led a 2% slide in global equities last week, attributed to both stretched positioning and near-term fears about waning demand.

  • "What really stands out is the flow reversal…tech funds saw outflows of more than US$9 billion just one week after record inflows." – Jan Bopp [01:59]
  • Contributing factors: Price hikes from Apple and Microsoft spurring consumer pull-through concerns; news that OpenAI may delay IPO plans until 2027, heightening sector uncertainty.

• Europe Under Pressure, Autos in the Spotlight:
  The European market mirrored global weakness, with added woes in the auto sector.

  • Volkswagen reportedly considering cutting up to 100,000 jobs and closing some factories:
    "That's a dramatic signal…it reflects mounting pressure from cheaper Chinese EVs, softer demand overall and trade tensions." – Jan Bopp [02:45]

2. Geopolitics and the Middle East: US-Iran De-escalation

With Jan Bopp – [03:10–03:55]

• Middle East Risk Premium Fades:
  After a spike in US-Iran tensions and military strikes, markets interpreted the recent pause as de-escalation.
  • "The key point for markets is that shipping has continued…and with both sides stepping back and resuming talks, investors see this more as a temporary flare up than a lasting crisis." – Jan Bopp [03:34]
• Resulted in stabilizing sentiment: US futures and European stocks pointed higher.

3. Asia Focus: South Korea’s USD 1.3 Trillion Investment Announcement

With Jan Bopp – [03:55–04:46]

• Market Reaction Muted Despite Historic Figure:
  Samsung and SK Group’s decade-long semiconductor investment plan underscores the industry’s importance, but timing keeps near-term market enthusiasm subdued.
  • "These investments stretch over a decade while investors are focused on near-term demand…shares of Samsung and SK Hynix are under pressure." – Jan Bopp [04:27]

4. Commodities and Currencies

With Jan Bopp – [04:46–05:46]

• Oil Stable Despite Geo-Tensions:
  Oil prices dropped below $73/barrel since shipping through the Strait of Hormuz continued uninterrupted.
• Stronger Dollar, Weaker Gold:
  The dollar firmed on US economic resilience and shifting rate expectations; gold dropped to its lowest ETF holdings since September last year.
  • "Central banks are still supportive but that's acting more as a floor than a driver." – Jan Bopp [05:39]

5. Preview: Key Events for the Week Ahead

With Jan Bopp – [05:46–06:38]

• Focus on US jobs data (employment report due Thursday), Eurozone inflation, China PMIs, and the ECB forum in Sintra.
  • "So another busy week ahead…" – Jan Bopp [06:35]

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6. Technical Analysis Insights

With Markus Wachter – [06:47–09:13]

• US Dollar Upgraded to Neutral:
  Technicals show stabilization, especially versus low-yielders (EUR, CHF, JPY).

  • "We look at the dollar versus low yielders…our upgrade is mainly versus the low yielders…we see the dollar index showing more strength there." – Markus Wachter [07:09]

• S&P 500 Remains Bullish:
  Minor consolidation, but uptrend remains intact.

  • "Basically, the S&P 500 looks quite good…the technical picture stays bullish." – Markus Wachter [07:49]

• Precious Metals Downgraded:
  Gold and silver have lost momentum and may fall further; model portfolios reduced gold mining equity exposure.

  • "We have been downgrading the precious metals…we rather go neutral on the sidelines and see what's happening next." – Markus Wachter [08:34]

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7. Asian Equity Markets Deep Dive

With Richard Tang – [09:22–15:36]

• Volatility Rooted in Tech Exposure:
  Korea, Taiwan, and Japan closely track the tech cycle, with leveraged ETFs amplifying swings.

  • "Chip makers are a very important part of this market move…chip makers are very, very crowded." – Richard Tang [09:51]
  • Despite index fluctuations, earnings revisions remain positive: "We're still constructive on the earnings outlook, and that's why we think the primary trend is still positive." – Richard Tang [10:14]

• Japan: Upgraded Target for Nikkei 225 Index:
  Leveraging its central role in the AI and semiconductor ecosystem, and benefiting from governance, dividends, and buybacks.

  • "Japan is a key beneficiary of AI and semiconductor trade globally…and we're happy once again to raise the target." – Richard Tang [11:22]

• Rates and Regional Impact:
  BoJ tightening is not yet a clear headwind; US rate hikes more negative for South Asia than North Asia.

  • "The north may be less vulnerable than the south…South Asian markets would actually hurt more." – Richard Tang [12:59]

• China: K-Shaped Recovery Drives Market Divergence:
  Weak domestic demand holds back "old economy" and tech stocks (Hong Kong, Hang Seng Tech Index down ~20% YTD), while AI/“new tech” A-shares surge (STAR 50 +45% YTD).

  • "K shaped economy in China is driving K shaped market. …the divergence is extremely large." – Richard Tang [14:03]
  • "If we have to see a rebound in the Hang Seng Tech or the Hong Kong market, we have to expect that gap between old and new tech to narrow…probably in Q4 or end of this year." – Richard Tang [15:16]

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Notable Quotes & Memorable Moments

• Jan Bopp [01:59]:
  "Tech funds saw outflows of more than US$9 billion just one week after record inflows. That kind of swing suggests positioning had become stretched."

• Jan Bopp [03:34]:
  "With both sides stepping back and resuming talks, investors see this more as a temporary flare up than a lasting crisis—and that's helping sentiment stabilize."

• Markus Wachter [07:49]:
  "The S&P 500 looks quite good...there is only minor short-term consolidations. The uptrend remains intact."

• Richard Tang [14:03]:
  "The K shaped economy in China is driving K shaped market...the divergence is extremely large."

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Timestamps for Key Segments

• Market News and Sector Overview: 01:09–06:38
• Technical Analysis: 06:47–09:13
• Asia/Equities Deep Dive: 09:22–15:36

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Takeaways

• Investor Sentiment Retracing:
  Short-term caution is back, particularly in technology, but underlying fundamentals in some regions and sectors remain robust (notably in North Asia).
• Geopolitics as a Wildcard:
  The market’s ability to quickly shrug off Middle East tensions demonstrates underlying resilience, though risks remain.
• Asia at the Crossroads:
  Major capital commitments and market divergences reflect long-term faith in tech, but prompt caution amid crowded trades and weak Chinese consumption.
• Technical and Regional Views:
  The US dollar and S&P 500 retain uptrend characteristics, while gold and silver lose their shine. Japan stands out for upside in Asia.
• Packed Data Calendar:
  Investors should focus on key economic data and central bank signals in the shortened US holiday week.

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This episode delivers a broad, clear, and actionable snapshot of what’s “moving markets” globally as Q2 comes to a close.

Transcript

[A]

Good morning everyone and welcome to Julia Spare's Moving Markets Podcast. It's Monday 29th June, and my name is Helen Freer. First of all, I'd like to just quickly mention our latest View beyond podcast, which was published over the weekend where our chief economist David Cole and our head of client coverage and advisory Eve Klenk talk about their take on Julius Baer's mid Year market outlook. So check it out. It's available as usual on this channel, Moving Markets, and it's called the View An Investor's Perspective of the mid year outlook 2026. But back to today, and I'll be talking first of all this morning to my colleague Jan Bopp about the latest market news and what's coming up this week. Then I'll be speaking to Markus Wachter from our technical analysis team to get his latest thoughts from the technical side. And finally, I'm delighted to also have Richard Tang on the podcast this morning and I'll be getting an update from him on equity markets in as so that's coming up in a few minutes, but let's get started with a wrap up of the market news first.

[B]

Good morning, Jan. Good morning, Helen.

[A]

And let's start with equities, because the tone clearly shifted. Late last week we saw global stocks retreat, led by technology, alongside signs of investors rotating into other sectors. What's driving this move and does it feel like this is temporary or more structural?

[B]

That's a great question, Alan. I think the jury is still out on this one. Global stocks fell more than 2% last week, and as you said, technology, especially chip makers, were at the center of the decline. Why? Well, because there's growing doubt about how strong demand will remain, particularly after price increases from companies like Apple and Microsoft raised concerns about consumer pull through a New York times report that OpenAI could delay its initial public offering until 2027. Also brought into focus how volatility could affect the sector. What really stands out is the flow reversal. So where investors put money at work, tech funds saw outflows of more than US$9 billion just one week after record inflows. That kind of swing suggests positioning had become stretched. And some of this is simply investors taking a step back. Some of it is probably also due to rebalancing now that we are approaching the end of Q2.

[A]

And Europe followed a similar pattern, but with its own challenges layered on top, especially in the auto sector.

[B]

Yes, exactly. Volkswagen made headlines. Reports suggest it could cut up to 100,000 shops and potentially close several factories. That's a dramatic signal. I mean, the carmaker employs more than 650,000 people. Not all of them, of course, in Germany, but it's substantial for the country's economy. And it reflects mounting pressure from cheaper Chinese electric vehicles, softer demand overall and trade tensions. The stock was down nearly 4% on Friday.

[A]

Let's turn to geopolitics now because over the weekend the focus shifted quite dramatically to the Middle East. After several days of escalation between the US And Iran with tit for tat strikes, we now have a pause. How are markets reacting coming into the new week?

[B]

Yeah, also good question. Markets are treating it as a de escalation. For now. The Strait of Hormuz is critical. Yes. So any disruption matters immediately, of course. But the key point for markets is that shipping has continued. And with both sides stepping back and resuming talks, investors see this more as a temporary flare up than a lasting crisis. And that's helping sentiment stabilize.

[A]

And that's reflected in markets with US Futures and European stocks pointing higher this morning. Now let's bring in Asia. The headlines from South Korea are striking. With potentially over $1.3 trillion in investment from Samsung and SK Group, the Kospi is trading between gains and losses this morning. Why didn't markets react more positively?

[B]

I think it's because of timing. It's an enormous figure highlighting how important semiconductors remain globally. But these investments stretch over a decade while investors are focused on near term demand for now. And sentiment recently isn't great. So despite the long term story, shares of Samsung and SK Hynix are under pressure this morning. And given the size of the two companies in the kospi, it's weighing on the overall index, but it's already well off its intraday lows. Helen.

[A]

And turning to commodities, oil prices are lower than we might expect given the geopolitical backdrop. Why is that?

[B]

Because traffic continued to flow through the Strait of Hormuz and that is what investors are focusing on. Oil fell on Friday below $73 per barrel already and it remained there this morning.

[A]

And let's briefly touch on currencies and gold. The dollar has strengthened, but gold seems to have lost momentum. What's behind this shift?

[B]

Yeah, I mean, the stronger dollar reflects shifting rate expectations recently and relative US resilience. The euro has slipped below 1.14 against the dollar. That's around a one year low. And gold, I mean gold, meanwhile, is facing weaker investment demand. ETF outflows have increased, pushing holdings to their lowest level since last September. Central banks are still supportive but that's acting more as a flaw than a driver.

[A]

All right, finally then, looking ahead, it's a shorter week in the US but an important one. What should investors be focusing on this week?

[B]

Yes, this week the US heads into its 250th birthday week. The key event is the US employment report on Thursday brought forward by the Independence Day holiday. Alongside that we'll see data on job openings, manufacturing and consumer confidence. Data on European inflation. China's PMIs and UK GDP will provide further macroeconomic color. Corporate news will be live this week with Nike, the main earnings highlight. Oh yes, and the ECB forum in Sintra, or how some call it the central bankers holiday camp, will also be important for central bank signals. So another busy week ahead, Helen. And with that, back to you.

[A]

Okay, thank you very much, Jan, for the detailed roundup to start the week.

[B]

Thank you for having me.

[A]

And now over to you, Marcus. Good morning.

[C]

Good morning, Helen.

[A]

Let's start with the US Dollar today because I know that the technical analysis team recently upgraded the dollar. Could you talk a little bit about this and your reasons for the Upgrade?

[C]

Yeah. The U.S. dollar has been stabilizing and basically we have been up trading it to neutral and that has been particularly we look at the dollar versus low yielders versus emerging markets and versus cyclical and commodity currencies and our upgrade is mainly versus the low yielders, the euro, Swiss franc, Japanese yen and we see the dollar index showing more strength there. The downtrend persists versus the emerging market currencies.

[A]

Does this have any implications on the uptrend in The S&P 500?

[C]

Basically the S&P 500 looks quite good. The uptrend remains intact there and we see in the current price action there is only minor short term consolidations. We still see the semiconductors in the lead and we don't expect any strong medium term correction there. So overall the technical picture stays bullish.

[A]

Just lastly then, a few people have talked about precious metals on the podcast recently because they've been trading downwards since the highs we saw at the beginning of the year. What is the technical picture here, Marcus?

[C]

Yeah, after. Well, yeah, massively strong performance at the very start of the year, they have been going downwards and basically now we have seen a lack of momentum and risk of further breakdown below the Q1, 2024 lows. So therefore we have been downgrading the precious metals, especially gold and silver. We no longer see the same bullishness in the market and we rather go neutral on the sidelines and see what's happening next. Similarly, we have been also selling the gold mining equities in our model portfolios.

[A]

All right, thank you very much, Marcus. Great to speak to you again this morning.

[C]

Pleasure, Helen, have a nice and sunny day.

[A]

Now, let's move on to you. Richard, welcome back to the podcast.

[D]

Good morning, Helen.

[A]

We've seen quite a lot of volatility in Asia recently, particularly in South Korea. This has had a lot to do with the tech sell off, right? With Asian indices having quite a heavy exposure to chip makers.

[D]

Yes, indeed, it's mostly driven by technology. So over the past few weeks, you can see a clear pattern when tech stocks were up, whether that's from the US or regionally. You see Korea, Taiwan and Japan markets are up and when tax stocks were down, these markets were down. So yes, chip makers are a very important part of this market move. I think one thing that we would definitely mention, whether that's in the US or in the part that we monitoring Asia, the chip makers are very, very crowded. Not to mention the fact that we have a lot of leveraged ETF for Korean stocks that exacerbate both the way up and down. And that's why for any incrementally negative news, just like the one that Yang mentioned, it could trigger quite a lot of reaction from the market. But one thing that we would mention is earnings revisions are still upward. We're still constructive on the earnings outlook, and that's why we think the primary trend is still positive. One thing that we would admit is that that definitely makes a rally very, very concentrated. One example is that if you look at the emerging markets, excluding the three major chip makers in Taiwan, Korea, that emerging market is actually down this year. So definitely tech has a lot to do with it.

[A]

In Japan, the Nikkei lost more than 2% last week. But I know that our analysts have actually just raised their target for the Nikkei 225 to 75,000. Maybe you could talk about their reasons here.

[D]

Yes, the key reason is simply that we think Japan is a key beneficiary of AI and semiconductor trade globally. And as long as the hyperscalers are keeping the CAPEX high or revising up their capex, that should benefit most of these AI stocks and semiconductor stocks in the world, including Japan. And I think the key is that in a lot of these AI components within the supply chain, a lot of them were in heavy shortage both this year and next year, and that caused a sharp increase in the prices. And Japan has a lot of stocks that benefit from that. This is in Addition to the continuously improving corporate governance, higher dividend and buyback in Japanese corporates. So we are happy once again to raise the target.

[A]

What about US interest rates and the more hawkish tone coming from the Fed? To what extent is this relevant for Asian markets? Or is it the bank of Japan tightening that matters more for Asia?

[D]

Well, I think the impact of BOJ tightening will be felt largely within Japan Japanese market. But one thing that I would mention is so far the market still sees BoJ tightening as behind the curve and the liquidity within Japan is still largely accommodative. So we actually think this still is neutral to still largely positive for Japan. As for the tighter US financial conditions, yes, traditionally that generally will be a headwind to Asia. But what we will mention is that the north may be less vulnerable than the south within the region because North Asia, for example Korea, Taiwan, Japan, they have technology AI stocks. As we already discussed, South Asian stocks generally don't have AI theme and they have been traditionally quite sensitive to US dollar tightening. So if there is further tightening in the US financial condition, I think the South Asian markets would actually hurt more.

[A]

And what about China specifically? Is the weak domestic demand there going to limit upside in Chinese equities? Where did Chinese equities go from here, do you think, Richard?

[D]

Yes, it's definitely been a disappointment to us. But one thing that I would highlight is that K shaped economy in China is driving K shaped market. And one thing that we would definitely agree is that the domestic demand is still weak. If we look at retail sales numbers over the past two months, for example, we point to very weak consumption consumption and that would be a headwind to both the old tech and old economy stocks because old tech stocks were also quite cyclical and leveraged on the economic cycle. And that basically means the Hong Kong market and the Hang Seng Tech Index in particular to remain weak. And for investors in the China market, they currently have limited choices. And that explains why a lot of money actually rotated towards the AI stocks. A lot of those are listed in A shares to some extent explaining why Asia has been better than H. I think I would tell you a set of numbers which may be scary to hear. The Hang Seng Tang index year to date down roughly 20%. And as I mentioned, those are old technology stocks. On the other hand, if you look at the Chi Nest in Shenzhen is up 32%. The star 50 in Shanghai is up 45%. So you can tell that the divergence is extremely large. I think that is to a large extent because of the K shape economy in China right now. The bottom line is if we have to see a rebound in the Hang Seng Tech or the Hong Kong market, we have to expect that gap between old and new tech to narrow. And we think that the earliest timing this would happen would probably be Q4 or end of this year.

[A]

Really interesting. Thank you so much for joining me this morning. Richard. Great to hear your latest thoughts as always.

[D]

Thank you very much.

[A]

That is all for today. Thank you again to my guests and thank you all for tuning in. Don't forget to subscribe to the show if you haven't already and do join us again tomorrow and I will be back talking to more of our colleagues about what is moving markets. Have a great start to the week everyone and bye for now. 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 forward/legal podcasts for further other important legal information.