Tech sell-off hits US stock market

Good morning. Today we’re covering:

• A ‘new phase’ in the Middle East

• Evan Gershkovich released from Russia

• Can athletics can win fans outside the Olympics?

We start in the US where Wall Street stocks declined dramatically and Treasury bonds rallied as weak economic data and a slowdown evident in corporate earnings spurred fears about a decelerating US economy.

The tech-heavy Nasdaq Composite closed down 2.3 per cent, having slid more than 3 per cent earlier. Every Magnificent Seven stock except Meta ended lower.

The moves follow modest outlooks from chip designers Qualcomm and Arm earlier this week, even as their profits mostly met consensus expectations.

“The bar has been set so high for these companies that it’s almost impossible for them to jump over it,” said Steve Sosnick, chief strategist at Interactive Brokers. “If you’re good, but your price is spectacular, that’s a disappointment.” Catch up with our markets-wrap.

The latest from Big Tech:

Here’s what else I’m keeping tabs on today:

• South Korea inflation: July consumer price index inflation rate data will be released today.

• Corporate results: Japan’s Nintendo reports earnings and Uniqlo owner Fast Retailing reports July sales.

• Edinburgh Festival Fringe: The internationally acclaimed arts festival featuring theatre, cabaret, comedy and music shows, starts in the Scottish capital today.

Five more top stories

1. Hizbollah leader Hassan Nasrallah said the battle between his militant group and Israel had “entered a new phase” with the killing of a senior commander in Beirut, adding that Israel had breached limits and should expect a “certain” response. Read more from Nasrallah’s remarks, given as diplomats held urgent talks to avoid all-out war.

2. Russia has released Wall Street Journal reporter Evan Gershkovich as part of the largest prisoner swap of its kind since the cold war. The exchange in Ankara, which involved 26 prisoners and seven countries, was the culmination of months of painstaking diplomacy. Here’s the full story.

3. Nissan and Honda will aim to roll out a new electric vehicle before the end of the decade as the two Japanese carmakers outlined a sweeping alliance to compete against Tesla and Chinese rivals.

4. The UK Serious Fraud Office charged Glencore’s ex-head of oil and four other former executives with conspiring to make corrupt payments after a long-running investigation into allegations of bribery by the UK-listed commodity trader. Learn about the investigation.

5. Shares in Toyota, Panasonic and Japan’s biggest banks were among the biggest victims of a huge rout of Tokyo stocks yesterday, as investors absorbed an unexpected interest rate increase by the Bank of Japan and a renewed surge in the yen. More on the impact of the BoJ rate increase.

How well did you keep up with the news this week? Take our quiz.

The Big Read

Athletics has officially begun at the Paris Olympics. Storied athletes, from Jamaica’s Usain Bolt and Shelly-Ann Fraser-Pryce (pictured), to the US’s Allyson Felix, have given performances that have redefined the limits of human achievement over the years. But most people pay little attention to the sport when the Games are over. Read about the projects trying to change that.

We’re also reading and watching . . . 

Chart of the day

Commodities from copper to corn have been tumbling as plentiful supplies and flagging Chinese demand prompt fund managers to cut around $41bn of bullish bets on natural resources. Meanwhile, concerns about slowing Chinese demand are already playing out in copper, a bellwether of the global economy. The country’s net imports of the metal were at 13-year lows in June due in part to record exports of 157,000 tonnes.

Take a break from the news

Henry Steiner — the graphic designer behind “brand Hong Kong” sits down with the FT’s architecture and design critic Edwin Heathcote to talk about living in the city — and how it inspired visuals for some of its top companies.

Additional contributions from Harvey Nriapia and Irwin Cruz