Market Summary
Oil Slides as US-Iran Strait of Hormuz Deal Nears: Brent crude continued its sharp decline, falling 0.70% this morning to around $78.75 a barrel after dropping 6.74% yesterday amid growing optimism that the U.S. and Iran are close to reaching a 60-day interim agreement to reopen the Strait of Hormuz without tolls. According to reports, Washington, Tehran, and Oman are targeting an announcement today. The prospect of restored shipping through one of the world's most important energy routes has eased supply concerns, helping to drive oil prices lower and reducing inflation expectations.
Treasuries and Gold Rally as Rate Hike Expectations Ease: Falling energy prices supported government bonds overnight, with the benchmark U.S. 10-year Treasury yield edging down to 4.60%. Gold extended its gains, with spot gold rising 2.11% this morning to $4,165 as investors increased demand for safe-haven assets while also scaling back expectations for further Federal Reserve rate hikes. The U.S. dollar weakened against most major G10 currencies as easing geopolitical risks reduced demand for the traditional haven currency.
Chip Stocks Lead Asian Markets Despite Mixed US Tech Performance: Semiconductor stocks remained the key driver of equity markets, with South Korea's KOSPI surging 4.57% overnight as SK Hynix climbed 4.41%. Nvidia gained more than 2% in post-market trading after Elon Musk praised the company's Vera Rubin chips. However, sentiment across U.S. technology shares remained mixed, with SpaceX falling 7.5% in extended trading after forecasting higher AI-related spending, while AMD dropped 9% following weaker-than-expected sales guidance.
Markets Turn to Economic Data After Geopolitical Shift: With geopolitical tensions showing signs of easing, investor attention is shifting back toward economic fundamentals. Markets will closely watch today's U.S. ADP Employment Change alongside European manufacturing data for further clues on the strength of the global economy and the outlook for central bank policy. Lower oil prices have also strengthened expectations that inflationary pressures may continue to moderate in the coming months.
Economic Calendar
- France Industrial Production
- Eurozone PPI
- Eurozone PMI
- U.S. MBA Mortgage Applications
- U.S. July ADP Employment Change
Key Market Moves Today
- S&P 500 Futures: +0.33% (7,791.5)
- U.S. 10-Year Treasury Yield: -1.41 bps (4.60%)
- Brent Crude: -0.70% ($78.75)
- Bitcoin: -0.31% ($64,095)
- Spot Gold: +2.11% ($4,165)
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