Today’s Outlook :
• US MARKET : Wall Street closed lower on Tuesday due to a sharp sell-off in the technology sector. A major decline in the South Korean stock market, triggered by weakness in tech, spilled over into global markets, weighing on U.S. chip stocks and artificial intelligence (AI) trading.
The S&P 500 index fell 1.4% to 7,365.67 points, while the tech-heavy Nasdaq Composite dropped 2.2% to 25,587.04 points. The Dow Jones Industrial Average was volatile but eventually closed slightly lower by 0.1% at 51,665.43 points.
A major AI stock rally had previously been one of the key drivers of Wall Street’s rebound in April–May, helping markets ignore concerns over the Middle East conflict and inflation spikes caused by rising oil prices. However, after the temporary U.S.–Iran peace agreement and oil prices falling back near pre-war levels, geopolitical risk has eased and markets have shifted focus back to the technology sector.
After a long period of euphoria, questions are now emerging over whether extremely high valuations can still be justified without tangible results from massive corporate spending on AI. Investors are now demanding proof that large investments in data centers, chips, and infrastructure can actually translate into earnings growth.
Aside from the tech sell-off, markets are also awaiting the economic calendar and quarterly earnings reports from major companies such as FedEx and Micron.
S&P Global reported that the U.S. flash PMI for June rose to 52.2 from 51.5 in May, a five-month high. The services PMI rose to 51.3, while manufacturing output reached 57.7, the fastest pace since July 2021.
Upcoming data such as revised first-quarter GDP and the PCE inflation index will be released on Wednesday and will be closely watched, as the PCE is the Federal Reserve’s preferred inflation gauge.
• EUROPEAN MARKET : European stocks fell to a one-week low on Tuesday, tracking a global tech sell-off and concerns that the Federal Reserve’s “higher-for-longer” interest rate stance could continue to weigh on risk assets.
The pan-European STOXX 600 index fell 0.7%, while Germany’s DAX dropped 0.8%. France’s CAC 40 fell 0.7%, Italy’s FTSE MIB fell 1.5%, while the UK’s FTSE 100 closed flat. Markets are also still digesting the political impact of PM Keir Starmer’s resignation, although the muted reaction suggests investors are already accepting frontrunner Andy Burnham. The biggest pressure came from the technology sector, with major stocks such as ASML falling more than 5%, dragged down by sell-offs in Asia and Wall Street.
• ASIAN MARKET : Most Asian stocks fell sharply on Tuesday, led by a near 10% plunge in South Korea’s KOSPI as investors rushed to unwind positions in technology after a strong earlier rally.
The decline triggered a circuit breaker on the Korea Exchange, temporarily halting trading for the second time that day. The KOSPI last fell 8.1% to 8,375.31, sharply reversing gains from an AI-driven rally that had made it one of the world’s best-performing markets this year.
Semiconductor stocks were the main drag, with SK Hynix and Samsung Electronics each falling around 12%. SK Hynix’s decline was also driven by reports that the company is slowing its HBM4 expansion and shifting focus to DRAM production, which currently offers higher margins.
In Japan, the Nikkei 225 fell 3.5% and the TOPIX dropped 2.6%, led by chip and export stocks correcting from recent record highs. Japan’s PMI data showed manufacturing and services activity improved in June, but input costs rose sharply due to disruptions from the Iran conflict, which could push the Bank of Japan toward tighter policy after last week’s rate hike
Chinese markets also declined: the CSI 300 fell 2.8% and the Shanghai Composite dropped 1.4% due to continued pressure in the tech sector Meanwhile, Hong Kong’s Hang Seng fell 1.8%, pressured by weakness in major tech and electric vehicle stocks.
• COMMODITIES :Oil prices were broadly steady on Tuesday, slipping about 1% as investors closely monitored crude flows through the Strait of Hormuz amid signs of progress in U.S.–Iran peace talks. Brent crude fell 87 cents, or 1.1%, to USD 77.03 per barrel, while West Texas Intermediate (WTI) fell 73 cents, or 1%, to USD 73.13 per barrel at 12:05 p.m. ET (16:06 GMT). Earlier, WTI hit a near four-month low of USD 72.48. Oman and Iran also agreed to continue discussions on managing navigation in the Strait of Hormuz, including maritime services in the strategic waterway and related costs.
• INDONESIA : The JCI closed down 0.25% at 6,101.33 on Tuesday, as investors adopted a wait-and-see stance ahead of clarity on Indonesia’s MSCI market classification.
On Wednesday morning, MSCI officially confirmed that Indonesia will retain its status as an Emerging Market. However, MSCI noted that several issues still need improvement, particularly regarding consistent implementation of capital market reforms.
MSCI appreciated various reforms introduced by the Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX), and the Indonesian Central Securities Depository (KSEI). These include improved transparency of share ownership above 1%, more comprehensive investor classification, implementation of a High Shareholding Concentration (HSC) framework, and a roadmap to raise the minimum free float threshold to 15%.
Going forward, MSCI will continue monitoring the scope, consistency, and effectiveness of these reforms, particularly those related to free float methodology and improving market accessibility and investability. The evaluation will be a key factor in the MSCI Index Review in November 2026. If progress is deemed insufficient, MSCI may consider initiating consultations on a possible downgrade of Indonesia from Emerging Market to Frontier Market.
From a technical perspective, IHSG remains constructive. As long as it holds above 6,250, there is potential for further upside toward 6,375–6,400 before testing 6,640. In the medium term, the next target range is 6,900–7,000. However, failure to break resistance could trigger renewed selling pressure and a retest of the psychological level at 6,000.
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