SG Morning Brief | Mag 7 Loses $800B as Oil Hits $100 and AI Capex Fears Collide; Intel Surges After Hours

US Overnight

The S&P 500 plunged 1.21% to 7,408.30 — its worst day in a month — the Nasdaq tumbled 2.15% to 25,137.69, briefly breaking below 25,000 for the first time since May, and the Dow fell 506.93 points (-0.97%) to 51,711.65. Two forces collided: Brent crude crossed above $100 per barrel for the first time since May after Houthi militants attacked two Saudi tankers in the Red Sea, and Alphabet's decision to raise its 2026 capex forecast to $195-205 billion reignited fears that hyperscaler AI spending may never generate proportional returns. The 10-year yield surged to 4.67%, the highest in a year and a half, on renewed inflation concerns. The Magnificent Seven collectively lost approximately $800 billion in market value — their worst day since the April 2025 tariff meltdown. Both Alphabet and Tesla reported negative free cash flow for Q2. US manufacturing PMI fell to 49.5, dropping below 50 for the first time since December 2023, signaling contraction. Services PMI bucked the trend at 56.0, beating estimates.

Key Movers

Tesla (TSLA) -14% — Tesla cratered 14% after reporting a significant Q2 earnings miss with negative free cash flow. Operating expenses rose faster than revenue. CEO Musk called 2026 a "massive capex year" focused on Optimus robots, robotaxis, and data centers rather than car production. The stock fell toward its lowest level in a year.

Alphabet (GOOGL) -7% — Alphabet fell over 7% despite posting strong Q2 results and a cloud backlog topping $500 billion. The culprit: a raised capex forecast of $195-205 billion, up from $180-190 billion previously. Amazon fell over 4% and Oracle hit a 52-week low as the AI capex backlash spread across the entire hyperscaler complex.

Chips mixed: Micron +3% / Texas Instruments -3% — The SOX dipped just 0.54% as the chip sector diverged sharply from the mega-cap rout. Micron gained over 3% and Applied Materials rose over 1%, while Texas Instruments fell over 3% and Qualcomm dropped over 2%. Memory names continue to rally on pricing power while analog/legacy chipmakers fade.

After hours, Intel (INTC) +10% — Intel surged over 10% in after-hours trading following its Q2 earnings report. The result suggests CEO Lip-Bu Tan's restructuring and foundry strategy is gaining traction with investors.

SGX Preview

The STI was near 5,070. DBS near S$62.18, UOB near S$37.91. Brent at $100 is a severe headwind for Singapore — import costs will spike, inflation expectations reverse, and MAS easing hopes evaporate. The $800 billion Mag 7 wipeout will pressure Asian tech at the open. However, Intel's 10% after-hours surge and the memory sector's resilience provide a partial offset for semiconductor names.

Asia Pre-Market

Brent briefly crossed $100 during the US session — by Asian morning it may have pulled back, but the psychological damage is done. The 10-year at 4.67% and manufacturing PMI below 50 create a stagflationary signal: prices rising while the economy contracts. Nasdaq futures are down around 0.5% on the Intel surge partially offsetting the Alphabet/Tesla damage.

Today's US Earnings and Economic Calendar

No major SG-relevant earnings today.

Next week: Microsoft (Tue Jul 28), Meta (Wed Jul 29), Amazon + Apple (Thu Jul 30). Nvidia reports Aug 28.

Week Ahead Spotlight: Microsoft, Meta, Amazon, Apple — After Alphabet's capex shock and Tesla's margin collapse, next week's four Mag 7 reports carry enormous weight. Amazon's AWS revenue and capex trajectory will confirm or deny the AI spending backlash. Meta's AI agent monetization and cost profile are key. If multiple hyperscalers raise capex like Alphabet, the market prices in a full capex bubble. If any show AI spending translating into margin expansion, the selloff stabilizes.

One More Thing

Brent at $100 and manufacturing PMI at 49.5 on the same day is the definition of stagflation. Prices are rising while the real economy contracts. The June CPI relief at 3.5% is already history — July will re-accelerate with $100 oil. The Fed hike debate, which seemed settled two weeks ago, is wide open again. And the Mag 7 losing $800 billion in a single session tells you the AI capex cycle has reached the point where investors are no longer willing to fund growth at any price. Alphabet has a $500 billion cloud backlog and the stock still fell 7%. The market is not saying AI is fake. It is saying the returns are too far away and the costs are too high right now. Tonight, Amazon and Meta get to make their case.

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