Market Summary
US Strikes on Iran Renew Geopolitical Fears; Oil Surges: Fresh U.S. military strikes on Iran over the weekend reignited concerns over a broader Middle East conflict, driving a sharp risk-off move across global markets. Brent crude has jumped 4.3% to $79.25 per barrel as uncertainty surrounding the status of the Strait of Hormuz fuelled fears of potential supply disruptions. The rise in energy prices has revived concerns that inflation may remain elevated, prompting investors to reassess the outlook for monetary policy.
Global Equities Retreat as Higher Rate Expectations Return: Equity markets came under pressure as rising oil prices strengthened expectations that the Federal Reserve may need to keep policy tighter for longer. South Korea's Kospi has fallen 9.23% this morning, while Nasdaq 100 futures declined 1.3%, and European equity futures pointed to a weaker open. Investors are now focused on the start of U.S. earnings season, alongside upcoming U.S. inflation data and Fed Chair Kevin Warsh's congressional testimony for further direction on interest rates.
Dollar Strengthens While Bonds and Precious Metals Decline: Safe-haven demand lifted the U.S. dollar against all major peers, while higher yields weighed on both government bonds and precious metals. The U.S. 10-year Treasury yield rose to 4.58% as markets priced in Fed tightening by year-end. Gold has fallen 1.5% to $4,057 per ounce, and silver has dropped nearly 3.5% this morning, while Bitcoin declined more than 2% as investors reduced exposure to risk assets.
TSMC Sales Reinforce AI Demand Outlook: Taiwan Semiconductor Manufacturing Co. reported a 36% year-on-year increase in second-quarter revenue to $39.6 billion, meeting analyst expectations and reinforcing confidence that global demand for AI infrastructure remains robust. June sales surged 68% from a year earlier, highlighting continued strength in AI-related chip demand. As the primary manufacturer of advanced semiconductors for Nvidia and Apple, TSMC's results are viewed as a key indicator that the AI investment cycle remains firmly intact.
Economic Calendar
- U.S. Federal Budget Balance
- Russia Trade Balance
- U.S. Earnings Season Begins
Key Market Moves Today
- S&P 500 Futures: -0.53% (7,579)
- U.S. 10-Year Yield: +1.81 bps (4.58%)
- Brent Crude: +4.07% ($79.10)
- Bitcoin: -2.11% ($62,814)
- Spot Gold: -1.56% ($4,055)
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