Citigroup maintains its bet that the Federal Reserve will hold steady this week.

According to The Information, citing people familiar with the matter, a Chinese enterprise backed by state-owned capital has begun mass-producing domestically developed DUV (deep ultraviolet) lithography machines, marking a key breakthrough in China’s semiconductor industry localization and substitution efforts. The company plans to produce around 5 domestic DUV lithography machines in 2026, scaling up to roughly 20 units in 2027. While this lags behind Dutch lithography giant ASML, which delivered 131 immersion DUV lithography systems last year, the mass production of domestic equipment is viewed by the market as a major milestone in China’s chip supply chain autonomy. The first batch of domestic DUV equipment is scheduled to be delivered to domestic chipmakers including SMIC, Hua Hong Semiconductor, and memory chip manufacturer Changxin Storage. As a representative of China’s DRAM industry, Changxin Storage is expected to become a key application scenario for domestic advanced semiconductor equipment. In response to the news, the global semiconductor market has seen sharp fluctuations. U.S. memory chip stocks fell across the board: SanDisk dropped around 12.9%, Western Digital fell about 8.6%, Seagate Technology declined roughly 6.9%, Micron Technology fell around 6.6%, and SK Hynix dropped about 8.6%. Dutch firms ASML and Besi saw their shares plunge over 8% at one point, triggering automatic trading halts; German semiconductor company Infineon also declined. Market analysts note that if domestic DUV equipment can operate stably in production lines of firms like Changxin Storage, it could further reduce China’s reliance on overseas key chip manufacturing equipment and reshape the global semiconductor equipment competitive landscape. The market reaction indicates that the progress of domestic lithography machine mass production has become a key variable affecting the valuation of the global semiconductor industry chain.

On-chain analytics firm Glassnode’s latest report shows that Bitcoin has recently rebounded from around $64,000 to roughly $65,100, but remains in a range-bound state overall, with the market continuing its consolidation pattern. The report notes that BTC previously hit a phase high of $66,700 before pulling back; its current spot price stays within the statistical fluctuation range, exchange liquidity has contracted, active selling pressure has eased somewhat, yet market participation remains low. Derivatives market data indicates that perpetual contract buyers’ initiative has declined and speculative capital confidence is weakening. Although overall open interest (OI) has increased slightly, long funding rates have cooled significantly, signaling a more cautious approach to leverage usage. Meanwhile, options open interest has continued to grow and volatility spreads have widened, showing traders are positioning for higher future uncertainty. In terms of institutional funds, regulated investment products have recently turned to net outflows, with weekly trading volume dropping notably. However, institutional overall positions still remain in slight profit, and valuation support levels stay stable. On-chain data also shows the market has entered a low-activity phase: the number of active addresses remains stable, but on-chain settlement demand and trading pressure are weak, and capital inflows have stalled. At the same time, long-term holders still maintain strong confidence, supporting the resilience of BTC’s holding structure. Glassnode states that the Bitcoin market is currently in a "quiet transition phase," with both unrealized and realized losses decreasing, selling pressure easing, but insufficient participation from spot, derivatives and institutional funds limiting short-term upside momentum.

CME officially launches U.S. single-stock futures today, covering 55 companies including SpaceX, with standard contracts for 100 shares and micro contracts for 10 shares. The contracts are cash-settled and offer nearly all-day trading, allowing investors to establish long, short or hedge positions without needing to borrow stocks. For SpaceX, this move does not alter the company’s fundamentals, but adds a new pricing channel: expectations during pre-market, after-hours and major news periods will be reflected faster in futures prices. SpaceX has a limited public float following its IPO, and its share price has fallen significantly from recent highs. Ortex estimates that around 56% of its free-float shares are currently lent out, and short positions continue to rise. The company’s first post-IPO earnings report is scheduled for August 4, followed by a share lock-up expiration window. Therefore, the launch of single-stock futures on its first day is not meant to draw new conclusions about price direction, but rather to make it easier for short sellers, hedgers and leveraged funds to enter the market. The linkage between spot prices, futures and earnings expectations may amplify short-term volatility.

Amsterdam-listed ASML and BESI resumed trading, with their shares falling between 7.4% and 8% each after earlier hitting the daily downside limit. The German semiconductor sector is lower, with Infineon down around 3% and Siltronic AG declining about 4%. On the news front, The Information cited people familiar with the matter as saying a company backed by Chinese state-owned capital has started mass-producing independently developed DUV (deep ultraviolet) lithography equipment, a key advance in China’s semiconductor industry’s push for domestic substitution.

US President Donald Trump said the United States is holding in-depth negotiations with Iran, noting that the window for these talks is limited and Iran will not be granted much time. Trump warned that if the negotiations collapse, the US will resume "powerful" military operations. Trump stated he decided to suspend the attack on Iran because a mediator requested an opportunity for negotiations. At the mediator’s request, he agreed to provide a chance for talks, adding that he believes the Iranians want to reach an agreement.

Citi’s strategy team warned that as expectations for Federal Reserve interest rate hikes rise, small-cap stocks could become the hardest-hit area during market corrections. With the Fed’s new chair Kevin Warsh adopting a hawkish policy stance, the market is shifting from relying on forward guidance to focusing on economic data. Current market expectations for a Fed rate hike this week have risen to over 30%, said Stuart Kaiser, Citi’s head of U.S. equity trading strategy. Even if rates are held steady this week, the probability of a rate hike in September remains as high as 70%. Citi advised investors to hedge risks by purchasing put options on the Russell 2000 Index ETF (IWM). Citi noted that small-cap stocks are more sensitive to interest rates, economic growth and credit conditions, so the Russell 2000 Index could face greater pressure than large-cap tech stocks if the Fed sends hawkish signals. Meanwhile, data from Goldman Sachs shows that hedge funds are increasing their positions in the healthcare sector, with related funds performing strongly recently. Between August 2025 and April 2026, healthcare-focused hedge funds posted an average return of nearly 40%, significantly outperforming general equity funds. AI-driven new drug development, rising M&A activity in healthcare, and improved FDA approval efficiency are cited as key drivers of the capital inflow. This week, the market remains focused on the Fed’s policy meeting and earnings reports from large tech companies. Citi pointed out that the market currently has extremely high performance expectations, and even if corporate earnings exceed forecasts, individual stocks may still decline due to buy-the-rumor, sell-the-news dynamics.