KIWOOM Morning Equity – 17 July 2026 This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. HAWKISH FED TONE AND AI SELLOFF WEIGH ON SENTIMENT, INDONESIA’S INVESTMENT HOLDS FIRM US MARKET: Wall Street closed lower in Thursday's trading (16/07/26), pressured by a sell-off in technology stocks, particularly the semiconductor sector, after rising capital expenditure (capex) guidance from the world's largest chipmaker, TSMC, triggered concerns over the massive scale of AI investments. S&P 500 index fell 0.5% to 7,533.77, Nasdaq Composite slid 1.5% to 25,881.95, while Dow Jones Industrial Average weakened 0.2% to 52,552.97 after briefly strengthening up to 0.5%. The weakness in the technology sector was offset by gains in the healthcare and consumer staples sectors, led by a surge in UnitedHealth and Abbott Laboratories shares post earnings releases that exceeded expectations. INDONESIA: Indonesia's investment realization in the first half of 2026 reached Rp1,010.6 trillion or 49.5% of the annual target of Rp2,041.3 trillion, growing 7.2% YoY amid global geopolitical challenges. This investment successfully absorbed 1.45 million workers (+15% YoY), with a composition of domestic investment (PMDN) of Rp502.9 trillion (49.8%) and foreign direct investment (PMA) of Rp507.6 trillion (50.2%). The base metal sector remains the largest contributor, while Singapore continues to be the largest foreign investor. In addition, downstreaming investments reached Rp300.1 trillion (+6.9% YoY) or contributed 29.7% to national total investments, dominated by mineral sectors such as nickel, bauxite, and copper, in line with government efforts to strengthen downstreaming and increase industrial value add. - In addition, economists assess that investment quality still needs to be improved to be able to provide a larger impact on economic growth. Although investment realization in the second quarter of 2026 reached Rp511.8 trillion or grew 7.1% YoY, this growth was mostly supported by PMA which surged 27.5% YoY, while PMDN instead contracted by 7.8% YoY, marking the first contraction since the first quarter of 2021. On another side, labor absorption reached 742,293 people, but investments remain concentrated in capital-intensive sectors such as mineral downstreaming and mining which have relatively low labor absorption capacity. The government is assessed to need to push investments into labor-intensive sectors such as manufacturing, food and beverages, textiles, electronics, as well as the digital economy, accompanied by improvements in human resource quality, ease of doing business, and regulatory certainty. Thus, investments would not only increase industrial value add, but also expand employment opportunities, strengthen public purchasing power, and support economic growth which is projected at only around 4.9% YoY in the second quarter of 2026. JCI closed higher by 1.10% to the level of 6,108.21. Throughout trading, JCI moved in the range of 6,024.35 – 6,108.21. Foreign investors posted a net buy in the Regular Market of Rp283.41 billion, while across all markets foreign investors recorded a net buy of Rp1.22 trillion. Foreign fund inflows primarily entered through BMRI, ANTM, BBRI, TPIA, and RANS, while foreign selling pressure was recorded in TLKM, BRMS, ASII, BBCA, and ENRG. The Indonesian Rupiah strengthened to around Rp17,969 per US dollar (+0.41%) on Thursday, strengthening for the third consecutive session as the US dollar weakened further after lower US inflation reduced speculation of a near-term Fed interest rate hike. Technically, JCI is still moving above the EMA10 and EMA20, showing that the short-term bullish trend is still maintained after successfully exiting the minor descending channel pattern. In addition, the EMA10 has formed a bullish crossover against the EMA20, indicating that strengthening momentum is starting to be confirmed and increases the opportunity for the continuation of an uptrend in the short term. JCI has the opportunity to continue its strengthening toward the range of 6,171 – 6,226. If it is able to break above that area, the strengthening has the potential to continue toward the dynamic resistance of the EMA50 around 6,258. Meanwhile, the immediate support sits at 6,024 and 5,987, with the next strong support at 5,949 if selling pressure rises again. The RSI (14) increased to the 53.98 level, indicating that bullish momentum is still maintained and still has room to continue its strengthening. KIWOOM RESEARCH advises investors to remain trend following by applying a trailing stop to lock in profits that have formed. Adding positions (averaging up) can be done gradually if JCI is able to hold above 6,095 and continue its strengthening toward the resistance area.