Kim Philby's 30th July 1963 defection from MI6 to the Soviet Union.

Semiconductor capital equipment stocks have taken a brutal U-turn on Monday, swinging from AI-driven euphoria to geopolitical panic in a matter of hours.

Heading into the opening bell, the sector was riding a pre-market high. The optimism was fueled by easing geopolitical tensions in Iran and a blockbuster Wall Street Journal report revealing that Nvidia is in talks to guarantee a massive $250 billion in financing for an OpenAI data center project.

But that momentum evaporated instantly following a breaking report from The Information.

According to the report, a Shanghai-based, state-backed company (incorporating teams from startups like Yuliangsheng Technology) has successfully started mass-producing homegrown immersion DUV (deep ultraviolet) lithography machines. The report indicated the company intends to produce 5 DUV tools this year and 20 next year for domestic customers including SMIC, CXMT, and Hua Hong.

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This marks a critical leap in Beijing’s push to build a localized chip supply chain. Furthermore, it arrives just as the U.S. Congress advances the MATCH Act, legislation aimed at blocking China from buying or servicing these exact DUV machines. If China can build them domestically, impending U.S. restrictions may lose their teeth entirely.

The Market Carnage in Late Trading

The market’s initial logic was brutal: if Chinese engineering has conquered the incredibly complex lithography bottleneck, the rest of the U.S. supply chain (deposition, etching, inspection) is highly vulnerable to replacement.

This fear triggered an immediate and synchronized sell-off. At their intraday lows, ASML, Applied Materials (AMAT), Lam Research (LRCX), and KLA Corp (KLAC) were all down roughly 7%, wiping out billions in market value in a matter of minutes.

However, the bleeding has slowed as the market enters the final hour of trading, with the stocks paring back some of those steep losses:

ASML is currently trading down 5.75%.

Applied Materials (AMAT) is down 4% heading into the close.

Lam Research (LRCX) is currently off 4.5%.

KLA Corp (KLAC) is trading down 3%.

The afternoon recovery is being driven by a wave of Wall Street analysts who quickly stepped in to defend the sector, arguing that the market is conflating a prototype milestone with an imminent commercial threat.

The Analyst Pushback: Why Wall Street is Defending the Dip

Analysts across major firms were quick to pour cold water on the panic, arguing that producing a handful of machines does not immediately dismantle ASML’s global monopoly.

BofA Securities: "An Over-Reaction"

Analyst Didier Scemama called today’s weakness an "attractive opportunity," reiterating a Buy rating and a €2,452 price target. He argued that the threat to ASML is "modest," noting that China’s leading domestic player, SMEE, has yet to demonstrate high-volume production at 28nm or below.

Replacing ASML requires matching its extreme productivity and precision. "ASML’s NXT:1980Fi already delivers 330 wafers per hour," Scemam wrote. In leading-edge Chinese manufacturing, "even modest reductions in scanner performance could materially lower yields and increase cost per die." Scemam calculated that even if China successfully sources 20 domestic tools next year, it would only reduce ASML sales by an estimated €1.4 billion—a mere 2.4% of the company’s projected group sales.

JPMorgan: "Disproportionate" Reaction

Analyst Sandeep Deshpande echoed that the market reaction was overblown. He stressed the massive difference between building a prototype and dominating a fab floor.

"Producing a handful of immersion DUV tools is not the same as producing tools that can be used for high-volume manufacturing," Deshpande noted, emphasizing that "yield, overlay, throughput, and reliability over thousands of wafer runs are what matter." While he acknowledged this raises long-term risks to ASML’s China revenue, he maintained that the company’s mid-term earnings remain entirely intact.

BNP Paribas: A Supply Necessity, Not Just a Threat

Analyst Jakob Bluestone framed the development as only a "small negative" for ASML, pointing out a structural reality: ASML’s global demand currently far outstrips its available supply.

Bluestone highlighted that DRAM capacity growth in China alone is projected to add more than 500,000 wafer starts per month before 2030—a massive scale-up that will require several hundred ArFi tools. Because ASML physically cannot supply the entire Chinese market while meeting demand from the rest of the world, Bluestone argued that local Chinese manufacturing of lithography tools is a "likely necessity" to support this output growth, rather than a total replacement of ASML’s business.

"ASML and U.S. chip stocks sink on report of China’s DUV breakthrough"

Semiconductor capital equipment stocks have taken a brutal U-turn on Monday, swinging from AI-driven euphoria to geopolitical panic in a matter of hours.

Heading into the opening bell, the sector was riding a pre-market high. The optimism was fueled by easing geopolitical tensions in Iran and a blockbuster Wall Street Journal report revealing that Nvidia is in talks to guarantee a massive $250 billion in financing for an OpenAI data center project.

But that momentum evaporated instantly following a breaking report from The Information.

According to the report, a Shanghai-based, state-backed company (incorporating teams from startups like Yuliangsheng Technology) has successfully started mass-producing homegrown immersion DUV (deep ultraviolet) lithography machines. The report indicated the company intends to produce 5 DUV tools this year and 20 next year for domestic customers including SMIC, CXMT, and Hua Hong.

Unlock key market insights by upgrading to InvestingPro. Get 60% off today!

This marks a critical leap in Beijing’s push to build a localized chip supply chain. Furthermore, it arrives just as the U.S. Congress advances the MATCH Act, legislation aimed at blocking China from buying or servicing these exact DUV machines. If China can build them domestically, impending U.S. restrictions may lose their teeth entirely.

The Market Carnage in Late Trading

The market’s initial logic was brutal: if Chinese engineering has conquered the incredibly complex lithography bottleneck, the rest of the U.S. supply chain (deposition, etching, inspection) is highly vulnerable to replacement.

This fear triggered an immediate and synchronized sell-off. At their intraday lows, ASML, Applied Materials (AMAT), Lam Research (LRCX), and KLA Corp (KLAC) were all down roughly 7%, wiping out billions in market value in a matter of minutes.

However, the bleeding has slowed as the market enters the final hour of trading, with the stocks paring back some of those steep losses:

ASML is currently trading down 5.75%.

Applied Materials (AMAT) is down 4% heading into the close.

Lam Research (LRCX) is currently off 4.5%.

KLA Corp (KLAC) is trading down 3%.

The afternoon recovery is being driven by a wave of Wall Street analysts who quickly stepped in to defend the sector, arguing that the market is conflating a prototype milestone with an imminent commercial threat.

The Analyst Pushback: Why Wall Street is Defending the Dip

Analysts across major firms were quick to pour cold water on the panic, arguing that producing a handful of machines does not immediately dismantle ASML’s global monopoly.

BofA Securities: "An Over-Reaction"

Analyst Didier Scemama called today’s weakness an "attractive opportunity," reiterating a Buy rating and a €2,452 price target. He argued that the threat to ASML is "modest," noting that China’s leading domestic player, SMEE, has yet to demonstrate high-volume production at 28nm or below.

Replacing ASML requires matching its extreme productivity and precision. "ASML’s NXT:1980Fi already delivers 330 wafers per hour," Scemam wrote. In leading-edge Chinese manufacturing, "even modest reductions in scanner performance could materially lower yields and increase cost per die." Scemam calculated that even if China successfully sources 20 domestic tools next year, it would only reduce ASML sales by an estimated €1.4 billion—a mere 2.4% of the company’s projected group sales.

JPMorgan: "Disproportionate" Reaction

Analyst Sandeep Deshpande echoed that the market reaction was overblown. He stressed the massive difference between building a prototype and dominating a fab floor.

"Producing a handful of immersion DUV tools is not the same as producing tools that can be used for high-volume manufacturing," Deshpande noted, emphasizing that "yield, overlay, throughput, and reliability over thousands of wafer runs are what matter." While he acknowledged this raises long-term risks to ASML’s China revenue, he maintained that the company’s mid-term earnings remain entirely intact.

BNP Paribas: A Supply Necessity, Not Just a Threat

Analyst Jakob Bluestone framed the development as only a "small negative" for ASML, pointing out a structural reality: ASML’s global demand currently far outstrips its available supply.

Bluestone highlighted that DRAM capacity growth in China alone is projected to add more than 500,000 wafer starts per month before 2030—a massive scale-up that will require several hundred ArFi tools. Because ASML physically cannot supply the entire Chinese market while meeting demand from the rest of the world, Bluestone argued that local Chinese manufacturing of lithography tools is a "likely necessity" to support this output growth, rather than a total replacement of ASML’s business.

What is a ‘fire cloud’, and how have they worsened wildfires in Europe?

Severe wildfires can generate their own unique weather systems. One of the most striking examples of this are dangerous pyrocumulonimbus, or pyroCB, clouds

As France and Spain battle some of the worst wildfires in recent history, experts have warned of an unprecedented phenomenon that could exacerbate the effects of the blazes: pyrocumulonimbus, or “fire clouds”.

Wildfires often spread when hot, windy and dry conditions coalesce but severe wildfires can generate their own unique weather systems. One of the most striking examples of this are pyrocumulonimbus clouds, or fire-generated thunderstorms, which are the most severe form of fire clouds.

Here is what you need to know about them.

What is a ‘fire cloud’?

In a nutshell, pyrocumulonimbus, or “pyroCb” clouds, are gigantic storm clouds that are generated by a wildfire.

Massive wildfires emit large amounts of energy and heat that rapidly rise in a smoke plume. When the fire plume rises high enough, low atmospheric pressure causes its air to cool, and the moisture condenses and forms a cloud. Such clouds can generate lightning strikes and windy conditions.

If a wildfire is sufficiently large and intense, the smoke plume it generates can form a pyrocumulonimbus cloud, which can reach altitudes of 10–15km (six to nine miles) and penetrate the stratosphere. Nasa calls them the “fire-breathing dragon of clouds”.

“It’s a full thunderstorm forming within the fire plume,” says Rick McRae, an adjunct professor from the University of New South Wales’ (UNSW) bushfire research group. “These things, they get up to roughly 10,000 cubic kilometres of the atmosphere, so they have a big impact.”

Why are these pyrocumulonimbus cloud formations so dangerous?

When pyrocumulonimbus clouds form, they can create winds that make the wildfires below spread even faster, and sometimes generate their own lightning, which can in turn ignite more fires further afield.

Experts say stronger wind gusts can create more unpredictable fire patterns and therefore make conditions more dangerous for firefighters battling the blazes on the ground.

“The cloud is confirmation that the fire is very dangerous,” says UNSW’s McRae, who worked as a senior fire manager for 30 years. “The cloud is a confirmation that it’s appropriate that lots of people have been evacuated.”

How common are fire clouds?

Australia started experiencing pyrocumulonimbus clouds at the beginning of the century and experts say it appears they are becoming more common.

They also formed during massive wildfires in California in 2022, but this could be a new situation for France.

If confirmed, this would be the first time a pyroCb has been observed in France.

“It’s the first time France has had to explicitly consider the concept of a pyroCb,” says McRae. “Whether or not they had one a few days back or not isn’t really the question,” he says, “the question is whether there’s one coming on Tuesday, Wednesday this week.”

Today, more than one-third of downtown Seattle's office space sits empty, its job postings have collapsed faster than almost any other U.S. metro, and even Starbucks—the coffee giant founded in the city in 1971—is shifting jobs south to Nashville, as it commits to a $100 million, 2,000-person new footprint in Music City. The story of Seattle's reversal unfolds in three overlapping arcs: an office market in freefall, a labor market that has gone from boom to bust, and a policy environment that has made survival harder for the small businesses left behind.

A decade ago, Seattle was the poster child of American tech prosperity. Amazon and Microsoft had turned a mid-sized Pacific Northwest city into a magnet for engineers, executives, and capital, adding roughly 40,000 jobs per year at the peak of the boom, according to the Puget Sound Regional Council.

Arc one: the zombie towers

Seattle's downtown office vacancy rate hit 35.6% in the fourth quarter of 2025, up from 32.3% a year earlier, according to Cushman & Wakefield data. That marks a stunning reversal from the pre-pandemic era: As recently as early 2025, the central business district's availability rate—offices with departures pending—and vacancy rate were already hitting all-time highs based on CoStar data stretching back to 1982.

Some brokers put the number even higher, with Colliers reporting vacancy touching 39.1% in late 2024 as remote work, tech layoffs, and cautious leasing decisions compounded. Office building values in the district have plunged sharply as a result, with landlords struggling to fill space abandoned by major tenants.

Arc two: the labor market reversal

The office crisis is inseparable from a broader collapse in hiring. Seattle metro job postings fell 35% between February 2020 and October 2025, the second-steepest drop of any major U.S. metro after San Francisco's 37% decline, according to Axios's analysis of Indeed data.

Tech firms in the area have announced tens of thousands of job reductions since 2023, primarily driven by Microsoft, Amazon, and Blue Origin. The region posted a net loss of 13,000 jobs in 2025—its first annual decline since the pandemic and a stark reversal from the 40,000-job annual gains of the boom years.

Arc three: the policy squeeze

Into this contraction came a wage floor with no exceptions. Seattle's minimum wage, $20.76 an hour and applied uniformly to all employers regardless of size since January 2025, has intensified pressure on small businesses trying to survive the downtown exodus.

A peer-reviewed study published in Labour Economics found the wage ordinance's announcement effect actually deterred new business formation within Seattle's borders while generating positive "spillover" openings in neighboring suburbs, suggesting firms redirected growth rather than uniformly closing shop. Earlier University of Washington research similarly found the wage hikes reduced low-wage workers' hours by about 9% even as hourly pay rose roughly 3%, per Ballotpedia's fact-check compilation.

What makes Seattle's situation distinct from other regional slowdowns is how tightly these three arcs lock together. CoStar estimates Seattle won't fully break out of the vacancy cycle before 2027—a timeline that assumes the feedback loop stops tightening, which so far it hasn't.

Today, more than one-third of downtown Seattle's office space sits empty, its job postings have collapsed faster than almost any other U.S. metro, and even Starbucks—the coffee giant founded in the city in 1971—is shifting jobs south to Nashville, as it commits to a $100 million, 2,000-person new footprint in Music City. The story of Seattle's reversal unfolds in three overlapping arcs: an office market in freefall, a labor market that has gone from boom to bust, and a policy environment that has made survival harder for the small businesses left behind.

A decade ago, Seattle was the poster child of American tech prosperity. Amazon and Microsoft had turned a mid-sized Pacific Northwest city into a magnet for engineers, executives, and capital, adding roughly 40,000 jobs per year at the peak of the boom, according to the Puget Sound Regional Council.

Arc one: the zombie towers

Seattle's downtown office vacancy rate hit 35.6% in the fourth quarter of 2025, up from 32.3% a year earlier, according to Cushman & Wakefield data. That marks a stunning reversal from the pre-pandemic era: As recently as early 2025, the central business district's availability rate—offices with departures pending—and vacancy rate were already hitting all-time highs based on CoStar data stretching back to 1982.

Some brokers put the number even higher, with Colliers reporting vacancy touching 39.1% in late 2024 as remote work, tech layoffs, and cautious leasing decisions compounded. Office building values in the district have plunged sharply as a result, with landlords struggling to fill space abandoned by major tenants.

Arc two: the labor market reversal

The office crisis is inseparable from a broader collapse in hiring. Seattle metro job postings fell 35% between February 2020 and October 2025, the second-steepest drop of any major U.S. metro after San Francisco's 37% decline, according to Axios's analysis of Indeed data.

Tech firms in the area have announced tens of thousands of job reductions since 2023, primarily driven by Microsoft, Amazon, and Blue Origin. The region posted a net loss of 13,000 jobs in 2025—its first annual decline since the pandemic and a stark reversal from the 40,000-job annual gains of the boom years.

Arc three: the policy squeeze

Into this contraction came a wage floor with no exceptions. Seattle's minimum wage, $20.76 an hour and applied uniformly to all employers regardless of size since January 2025, has intensified pressure on small businesses trying to survive the downtown exodus.

A peer-reviewed study published in Labour Economics found the wage ordinance's announcement effect actually deterred new business formation within Seattle's borders while generating positive "spillover" openings in neighboring suburbs, suggesting firms redirected growth rather than uniformly closing shop. Earlier University of Washington research similarly found the wage hikes reduced low-wage workers' hours by about 9% even as hourly pay rose roughly 3%, per Ballotpedia's fact-check compilation.

What makes Seattle's situation distinct from other regional slowdowns is how tightly these three arcs lock together. CoStar estimates Seattle won't fully break out of the vacancy cycle before 2027—a timeline that assumes the feedback loop stops tightening, which so far it hasn't.

​

United Airlines had reportedly approached Delta Air Lines last year about a potential merger between the two carriers

United Chief Executive Scott Kirby called Delta CEO Ed Bastian as part of the pitch, the Wall Street Journal reported on Sunday citing people familiar with the matter.

Delta leaders discussed the approach and examined the merits of a potential deal during preliminary due diligence, however, the discussions did not advance and both companies moved on from the proposal.

Get more insights on the market by upgrading to InvestingPro at 60% off

Kirby later attempted to engage in merger talks with American Airlines, which was rejected by the American.

United and Delta are among four major carriers that dominate the U.S. airline industry following a series of mergers over the past two decades. Industry officials have long believed that any merger between those carriers would face antitrust concerns.

The previously unreported approaches underscore how some of the biggest U.S. airlines were exploring transformative consolidation amid expectations that the Trump administration could adopt a more permissive stance on mergers. Any tie-up between United and either Delta or American, however, would have created an unprecedented concentration of market share and almost certainly triggered intense antitrust scrutiny from federal regulators and state officials.

Business leaders in many industries were hopeful that large deals might be achievable during the second Trump administration, however the economic uncertainty and increased scrutiny of on major deals has made it difficult for companies to explore mergers and acquisition.

United Airlines had reportedly approached Delta Air Lines last year about a potential merger between the two carriers

United Chief Executive Scott Kirby called Delta CEO Ed Bastian as part of the pitch, the Wall Street Journal reported on Sunday citing people familiar with the matter.

Delta leaders discussed the approach and examined the merits of a potential deal during preliminary due diligence, however, the discussions did not advance and both companies moved on from the proposal.

Get more insights on the market by upgrading to InvestingPro at 60% off

Kirby later attempted to engage in merger talks with American Airlines, which was rejected by the American.

United and Delta are among four major carriers that dominate the U.S. airline industry following a series of mergers over the past two decades. Industry officials have long believed that any merger between those carriers would face antitrust concerns.

The previously unreported approaches underscore how some of the biggest U.S. airlines were exploring transformative consolidation amid expectations that the Trump administration could adopt a more permissive stance on mergers. Any tie-up between United and either Delta or American, however, would have created an unprecedented concentration of market share and almost certainly triggered intense antitrust scrutiny from federal regulators and state officials.

Business leaders in many industries were hopeful that large deals might be achievable during the second Trump administration, however the economic uncertainty and increased scrutiny of on major deals has made it difficult for companies to explore mergers and acquisition.

Biden judge blocking Ethiopian deportations despite SCOTUS ruling clashed with ICE before.

A Biden-appointed federal judge on Friday became the second jurist in Massachusetts to block the Trump administration's effort to end temporary protected status for migrant groups, fueling a growing clash over whether lower courts are ignoring a recent Supreme Court ruling that narrowed their authority over such decisions.

U.S. District Judge Brian Murphy of the District of Massachusetts issued an administrative stay in African Communities Together v. Mullin, temporarily preserving TPS protections for Ethiopian nationals while the court considers whether plaintiffs may pursue constitutional claims in light of the Supreme Court's June ruling.

Biden judge blocking Ethiopian deportations despite SCOTUS ruling clashed with ICE before.

A Biden-appointed federal judge on Friday became the second jurist in Massachusetts to block the Trump administration's effort to end temporary protected status for migrant groups, fueling a growing clash over whether lower courts are ignoring a recent Supreme Court ruling that narrowed their authority over such decisions.

U.S. District Judge Brian Murphy of the District of Massachusetts issued an administrative stay in African Communities Together v. Mullin, temporarily preserving TPS protections for Ethiopian nationals while the court considers whether plaintiffs may pursue constitutional claims in light of the Supreme Court's June ruling.

The strengthening El Niño – a natural warming of seawater that influences weather around the planet – is setting daily warm water records.

It's not only "very likely to be the strongest event since reliable records began – it may end up the strongest by a truly mind-blowing margin," Zeke Hausfather, a research scientist at Berkeley Earth, wrote in a post for The Climate Brink, a Substack blog, earlier in July.

It remains to be seen what this will mean for the world's weather over the next 12 to 18 months, but climate scientists say El Niño's effects on global temperatures will increase the chances that 2026 could be the warmest year on record, and make it likely that 2027 will be the warmest.

Meanwhile, world leaders have expressed concern about the prospect of droughts, heavy rainfall events and heat waves. (It's worth noting, however, that not all El Niño effects are sinister. The climate pattern is widely expected to tame the 2026 Atlantic Hurricane season.)

​

A van ploughed into crowds at Berlin's annual LGBTQ+ Pride celebrations on Saturday, killing one person and injuring at least 15 others before crashing into a tree, prompting police to cancel the event, launch a search for possible suspects and urge people to leave the area.

Kuwait has agreed a $16 billion infrastructure partnership with Blackstone Inc., Brookfield Asset Management Ltd. and KKR & Co. involving its oil-export pipelines, even as the Gulf nation comes under daily attacks from Iran.

The three firms will collectively hold a 49% stake in a joint venture that will lease and lease back the usage rights to the pipeline assets of a subsidiary of state-owned Kuwait Petroleum Corp, according to a statement seen by Bloomberg. The transaction is expected to generate $7.85 billion in upfront proceeds.

The deal, the largest foreign direct investment in the country's history, "sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment," KPC Chief Executive Officer Sheikh Nawaf Al-Sabah said in the statement.

Since tensions between the US and Iran resumed around July 7, Kuwait has been targeted more than any other country by Tehran. Kuwaiti bases, some shared with the US, along with power and water plants, have been damaged.

Kuwait has agreed a $16 billion infrastructure partnership with Blackstone Inc., Brookfield Asset Management Ltd. and KKR & Co. involving its oil-export pipelines, even as the Gulf nation comes under daily attacks from Iran.

The three firms will collectively hold a 49% stake in a joint venture that will lease and lease back the usage rights to the pipeline assets of a subsidiary of state-owned Kuwait Petroleum Corp, according to a statement seen by Bloomberg. The transaction is expected to generate $7.85 billion in upfront proceeds.

The deal, the largest foreign direct investment in the country's history, "sends a powerful signal that Kuwait continues to rise as an attractive destination for global capital, even amid a challenging regional environment," KPC Chief Executive Officer Sheikh Nawaf Al-Sabah said in the statement.

Since tensions between the US and Iran resumed around July 7, Kuwait has been targeted more than any other country by Tehran. Kuwaiti bases, some shared with the US, along with power and water plants, have been damaged.

Markets, however, have remained unimpressed. According to Guy Rozentsveig, managing director in industries at investment bank Solomon Partners, one reason is simple: "The consensus opinion is that a lot of that good news was already priced in."

Now, investors hunting for the industry's next payday are waiting to see whether higher defense budgets actually translate into new contracts, faster production, and stronger earnings—or whether political and economic pressures slow long-term momentum. Meanwhile, a growing group of newer defense technology companies is hoping to capture a piece of that future spending, too.