Markets Weigh Widening War, Big Tech Earnings | The Asia Trade 7/23/2026

Tech Earnings and AI Spending [00:22]

• Alphabet shares slid as the company flagged higher spending to build AI computing power.
• Cloud revenue for Alphabet surged 82%, highlighting strong demand for AI infrastructure.
• Mandeep Singh noted that Alphabet's increased capex is justified by the massive runway in cloud and standalone system sales.

  The justification for the higher capex is that they are seeing so much growth and demand on the cloud side that now they are selling their standalone systems in addition to what they are selling through the cloud segment.

Tesla Performance and Robotics [00:38]

• Tesla missed Wall Street profit expectations, with adjusted earnings of $0.33 per share.
• Elon Musk cautioned that scaling production for the Optimus humanoid robot and robotaxi plans will be difficult.
• Analysts suggest Tesla is shifting its focus away from core EV sales toward becoming an AI and robotics company.

  He said I need more time. This is not a case of Tesla replacing gasoline engine cars with electric battery powered cars. It's a future in which cars drive themselves, humanoid robots do the work in factories and other places.

Geopolitical Tensions and Energy [00:46]

• Houthi militants targeting tankers in the Red Sea have pushed Brent crude prices higher by nearly 3.5%.
• The conflict is expanding beyond the Strait of Hormuz, creating new risks for global energy markets.
• U.S. officials are monitoring the situation as the conflict remains unpopular with the American public.

  We are seeing a significant expansion of hostilities. Tonight the U.S. Central Command announced its launching a 12th straight night of attacks inside Iran.

Central Bank Policy and Currency [01:53]

• Markets are pricing in the possibility of faster interest rate hikes from the Bank of Japan.
• The Japanese yen remains under pressure, with traders skeptical about the central bank's ability to change market dynamics.
• U.S. bond yields are rising as investors worry about inflation and the Federal Reserve's path.

  It is time for the Bank of Japan -- if they want to move the yen, if the authorities are serious about all getting on the same page and changing the narrative in terms of the yes, it needs to be a currency people want to own and not sell.

U.S.-China Trade Relations [030:03]

• U.S. officials are investigating whether Chinese firm Moonshot improperly accessed advanced U.S. AI chips.
• Bipartisan legislation in the U.S. Senate aims to block Chinese vehicles from the American market due to security concerns.
• Trade negotiations between the U.S. and India continue, though issues regarding tariffs on generic drugs remain a point of contention.

  The U.S. Commerce Department agency is now formally investigating whether Chinese firms like Moonshot are accessing advanced U.S. AI chips.

Labor Protests in South Korea [040:38]

• Labor protests are spreading across South Korean industries, including big tech companies like Samsung.
• Workers are seeking a larger share of profits following significant bonuses awarded to semiconductor employees.
• The government is debating how to ensure excess tax revenues are shared fairly across society.

  Workers across many industries that are not traditionally involved in AI also speaking up.

Trade Policy and Uncertainty [01:24:58]

• The U.S. is utilizing dormant trade tools, such as Section 338, to apply tariffs to allies like Canada.
• Analysts warn that the resulting uncertainty is more damaging to firms than the tariffs themselves.
• Trade policy remains a complex issue that may indirectly influence voter sentiment in the upcoming midterm elections.

  The complexity just continues to grow. For companies, that level of uncertainty, the cost attached to compliance continues to escalate.