AI Boom Continues, China's Consumer Outlook in Focus, Middle East Tensions Ease

Hello, this is Justina Lee writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.

Artificial intelligence remains the market's favorite, with investors continuing to rotate into semiconductor and technology names as companies race to build the next phase of the AI ecosystem. Amazon Web Services is also expanding into forward-deployed engineering, an increasingly competitive corner of the industry dominated by firms such as OpenAI and Anthropic.

China's consumer outlook is also back in focus after Nike posted a 12% sales decline in Greater China sales, even as the country's factory activity showed signs of improvement.

Meanwhile, Brent crude posted its biggest monthly decline since March 2020 as investors bet that tensions in the Middle East conflict may continue to ease.

The AI boom continues to reshape markets.

Investors have poured money into semiconductor companies beyond Nvidia, betting that the buildout of AI data centers will benefit a broader universe of chipmakers and infrastructure companies.

Intel, Micron and Advanced Micro Devices have gained about $2 trillion in combined market cap in the second quarter, making them among the most valuable U.S. tech companies and reflecting growing conviction in the next phase of AI spending.

That aligns with what analysts previously said: there could be a "changing of the guard" within the AI trade, as investors seek exposure to semiconductor companies complementary to Nvidia's chips.

Meanwhile, Amazon Web Services is strengthening its presence in forward-deployed engineering, or FDE, as it seeks to better compete with OpenAI and Anthropic, which announced their own FDE units earlier this year. FDE teams work alongside customers to accelerate technical transformation and tailor AI systems to specific business needs.

Beyond tech stocks, investors are also keeping a close eye on consumer demand. Sportswear giant Nike posted quarterly earnings that topped forecasts, aided by an expected refund of nearly $986 million in tariffs. However, analysts were concerned about growth in China, after sales dropped 12%, underscoring the challenges facing one of the company's most important markets.

China's manufacturing activity grew faster than expected in June, helped by high-tech production linked to global demand for AI-related products. But the recovery remains uneven.

Real estate investment and consumer goods production remained under pressure, raising questions about whether policymakers will need to step up support measures in the months ahead. Goldman Sachs warned that Beijing may face rising pressure to accelerate fiscal spending and government borrowing in the coming months to shore up growth.

Over in the Middle East, the prospects for fresh talks between Iran and the U.S. in Qatar helped push Brent crude to its biggest monthly decline since March 2020, as investors grew optimistic that tensions in the Middle East conflict could continue to cool.

Brent crude futures for September delivery rose around 0.3% in early Asia trade on Wednesday to $73.17 per barrel. The August contract was down roughly 21% in June, its largest monthly decline since March 2020. U.S. West Texas Intermediate futures added about 0.43% to $69.80.

Still, markets remained cautious. Mixed signals surrounding the Iran-U.S. peace talks suggest investors are treating the recent détente as fragile.

The Middle East isn't the only Trump-related headline commanding investors' attention.

His annual financial disclosure filing released Tuesday by the U.S. Office of Government Ethics has drawn scrutiny after revealing hundreds of millions of dollars in income tied to crypto token proceeds, alongside holdings spanning hundreds of individual company stocks.

—Justina Lee