General Market News

President Donald Trump has proposed imposing a 20% fee on cargo passing through the Strait of Hormuz to compensate the U.S. for providing security. Global shipping executives warn this could backfire by further reducing traffic through the vital waterway, which has already declined sharply amid escalating U.S.-Iran tensions following the breakdown of a mid-June ceasefire deal.

• Vessel traffic through the Strait dropped to just 14 ships on Sunday (including 4 crude tankers) compared to 37 vessels a week earlier, and industry leaders warn tolls would create further disincentive to use the route
• Shipping giant Hapag-Lloyd calls the toll plan 'fundamentally wrong' for international waters, noting it differs from Suez or Panama Canal fees which reflect major infrastructure investments
• The proposal marks an abrupt U.S. policy shift after the administration previously threatened sanctions against Oman for helping Iran establish tolling, with Iranian officials now mocking Trump's plan

The European Commission approved €659 million ($751 million) in German state aid to support four first-of-a-kind semiconductor facilities in Germany. The funding aims to strengthen the EU's position and autonomy in the semiconductor value chain and demonstrates implementation of the EU Chips Act.

• Germany will provide €659 million in state aid for four semiconductor plants, representing a significant investment in European chip manufacturing capacity
• The approval is part of the EU Chips Act initiative to reduce dependence on foreign semiconductor suppliers and increase European autonomy
• Executive Vice-President Teresa Ribera emphasized the projects show Europe is 'turning the ambitions of the EU Chips Act into action'

U.S. stock futures were mixed on Tuesday as investors awaited key June CPI inflation data and second-quarter earnings from major banks including JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup. Escalating U.S.-Iran tensions and potential shipping fees through the Strait of Hormuz pushed oil prices to four-week highs, raising concerns about renewed inflation pressures despite expectations for cooling consumer prices.

• Traders priced in a 43% chance of a Fed rate hike at the July 29 meeting, up from 34% the prior day, after Fed Governor Waller suggested rates may need to rise if inflation stays above the 2% target
• Futures showed Dow down 0.22%, S&P 500 essentially flat at -0.01%, while Nasdaq gained 0.48% as chip stocks rebounded 2.4% after Monday's 1.6% tech selloff
• Geopolitical risks intensified with three consecutive nights of U.S. strikes against Iran and potential 20% cargo fees on ships through the Strait of Hormuz, threatening to undermine any CPI improvement

Spot Middle East crude prices strengthened and flipped into backwardation after Iran attacked two UAE tankers near the Strait of Hormuz, raising concerns about oil export disruptions. The attacks are deterring shippers from entering the Gulf and prompting Asian refiners to seek alternative supplies from West Africa, Latin America, and Russia. The escalation follows a five-month conflict between the U.S. and Iran, with renewed tensions threatening the vital waterway through which significant oil volumes transit.

• Prompt monthly Dubai crude spreads flipped into backwardation of nearly $1 per barrel after three weeks in contango, signaling tight supplies as shippers avoid the Gulf region
• ADNOC has committed to over 70 million barrels of crude sales between June and August and may need to tap Fujairah inventories to meet demand amid potential shuttle service delays
• Asian refiners are switching to arbitrage supplies from West Africa and Latin America, with Indian buyers increasing Russian oil purchases as supply could tighten by September if disruptions last 10-15 days

U.S. Treasury yields rose on Tuesday as traders increased expectations for Federal Reserve rate hikes amid Middle East tensions and ahead of June inflation data. The 10-year yield reached 4.6278% while the 2-year note climbed to 4.2900%, reflecting growing market anticipation of monetary tightening. The moves come before Fed Chair Kevin Warsh's debut congressional testimony and the release of June inflation figures.

• Trader expectations for Fed rate hikes intensified, with the probability of a July 29 rate increase rising to 42.2% from 26.7% a week earlier, and a 33.6% chance of another hike by April
• Treasury yields surged following President Trump's announcement of plans to blockade Iranian ports and impose 20% fees on cargo passing through the Strait of Hormuz, pushing oil prices up over 2.8%
• June inflation data expected to show annual inflation easing to 3.8% from 4.2% in May, while core inflation is forecast to hold steady at 2.9%

President Trump's threat to impose tolls on cargo passing through the Strait of Hormuz, combined with escalating U.S.-Iran tensions, has accelerated Gulf states' efforts to develop alternative oil export routes. Saudi Arabia and the UAE are leading the push to bypass the strategic chokepoint, which handles a significant portion of global oil shipments. The UAE is reportedly planning a new port and terminal in Fujairah outside the strait to reduce dependence on Hormuz.

• Saudi Arabia is diverting approximately 4 million barrels per day through its East-West pipeline to the Red Sea port of Yanbu, though this route faces risks from potential Houthi attacks at Bab el-Mandeb Strait
• Only Saudi Arabia and the UAE currently have operational crude pipelines bypassing Hormuz with 3.5-5.5 million barrels per day capacity, while Kuwait, Iraq, Qatar, Bahrain and Iran remain heavily dependent on the strait
• Experts estimate it could take 18-24 months to build sufficient alternative infrastructure (pipelines, ports, shipping routes) to meaningfully reduce regional reliance on the Strait of Hormuz

Two Irish entities owned by ICBC's leasing arm have requested India's aviation regulator to deregister four Boeing 737 MAX aircraft leased to SpiceJet, a step toward repossessing the jets. The move tests India's new law intended to make aircraft repossession easier for lessors. SpiceJet, India's fourth-largest airline, has been struggling financially, grounding planes and slashing its flight schedule.

• SpiceJet has received 1.5 billion rupees ($15.6 million) from a government-backed credit scheme and expects another 3.5 billion rupees, as it faces payment default notices from at least two aircraft lessors
• Only 11 of SpiceJet's 53 aircraft were listed as in service, reflecting severe operational challenges at the airline
• SpiceJet stated the four aircraft had been grounded due to manufacturing issues with high-pressure turbines and their deregistration would eliminate lease rental costs on non-operational assets

Iran's oil minister stated that the country's oil exports are continuing normally despite the U.S. canceling a 60-day waiver of oil sanctions last week. Minister Mohsen Paknejad said Iran has maintained mechanisms for years to neutralize the impact of U.S. sanctions and expects no disruption to exports.

• The U.S. cancelled a 60-day waiver of oil sanctions against Iran last week, reimposing restrictions on Iranian oil exports
• Iran's oil ministry claims it has established long-standing mechanisms to circumvent U.S. sanctions and maintain export operations
• The statement comes amid heightened tensions in the Strait of Hormuz, a critical global oil transit route

China's smartphone shipments declined 4.3% year-over-year to 66 million units in Q2 2026, marking the fifth consecutive quarterly drop. Rising memory and component costs prompted most manufacturers to raise prices, dampening consumer demand. Huawei and Apple were the only vendors to achieve growth by maintaining steady pricing while competitors increased prices.

• Huawei led the market with 22.6% share and 19.4% shipment growth, while Apple grew 24.4% - both kept prices stable as rivals raised theirs
• Most Android vendors raised prices or reduced budget models due to surging component costs, discouraging consumers from upgrading their devices
• Fading government subsidies that had previously supported demand also contributed to the market downturn in the first half of 2026

China's crude oil imports plunged 41.3% in June 2026 to 7.12 million barrels per day, the lowest level since October 2016, driven by weak domestic demand and export restrictions on refined products amid the Iran war. Refinery utilization rates fell to near 10-year lows at 57.72%, while Middle East imports hit a decade low and Iranian oil imports dropped 40% month-over-month to below 800,000 bpd.

• June imports totaled 29.27 million tons (7.12 million bpd), down 41.3% year-over-year and 12% from May's already depressed levels
• China's refinery run rates fell to 57.72%, down 13.09 percentage points year-over-year, pressured by refined product export restrictions imposed in March to safeguard domestic energy security
• The sharp drop suggests permanent demand loss from China as high oil prices and the country's 'massive EV fleet' demonstrate China can sustain lower oil consumption levels

New Federal Reserve Chairman Kevin Warsh is testifying before Congress amid market turmoil, with Asian markets falling 1.2% and Brent crude reaching $85 per barrel. Recent hawkish comments from Fed Governor Christopher Waller have increased market expectations for potential rate hikes as soon as this month. Geopolitical tensions, including U.S. military strikes against Iran and potential Strait of Hormuz tariffs, are adding to market volatility.

• Asian markets declined sharply, with MSCI Asia-Pacific index down 1.2%, while Brent crude futures climbed to highest levels since mid-June on Iran tensions and potential 20% U.S. fee on Strait of Hormuz cargo ships
• Warsh faces questions on the Fed's balance sheet plans as hawkish Fed commentary has boosted odds of rate hikes later this month despite ongoing geopolitical uncertainty
• Major U.S. bank earnings (JPMorgan, Bank of America, Goldman Sachs, Wells Fargo, Citigroup) and June CPI data are due, which could further influence Fed policy expectations

South Korea raised its 2026 economic growth forecast to 3.0%, the highest in five years, driven by a global AI chip boom and surging semiconductor exports. The government plans to fast-track AI investment projects and increase 2027 spending by at least 10% to over 800 trillion won ($532.73 billion) to support the semiconductor sector. The economy posted its fastest growth in nearly six years last quarter on booming chip exports.

• 2026 GDP growth forecast upgraded to 3.0% from previous 2.0% estimate, marking strongest growth since 2021 and up from 2025's 1.1% pace
• Government will accelerate three mega projects covering semiconductor, AI data centers, and physical AI investments, with 2027 budget increasing by 10%+ to exceed 800 trillion won
• Inflation forecast raised to 2.6% for 2026 (up from 2.1% projection) due to high oil prices, with government targeting per capita income of $50,000 and top-four global exporter status

China's exports surged 27% year-over-year in June 2024, the fastest growth since October 2021, driven by strong global demand for AI hardware and U.S. retailers accelerating orders ahead of potential tariff increases. Imports also jumped 36%, the largest increase since June 2021, both figures significantly exceeding economists' expectations.

• Export growth of 27% far exceeded the forecast of 18.2%, accelerating from May's 19.4% gain, while imports grew 36% versus the expected 24%
• U.S. manufacturers rushed orders before the expiration of Trump's 10% tariff on July 24 and potential additional Section 301 tariffs, boosting U.S.-bound shipments
• The trade surge contrasts with China's domestic weakness, as Q2 GDP growth is expected to slow to 4.5% from 5% in Q1 amid declining consumption and property downturn

The U.S. conducted strikes against Iran for a third consecutive night under President Trump's orders, while Iran retaliated by attacking Gulf nations including the UAE and Bahrain. Iranian missiles hit two Emirati oil tankers in the Strait of Hormuz, killing one crew member and injuring eight others, escalating tensions in the critical energy waterway that carries a fifth of the world's oil and gas.

• Two UAE tankers (Mombasa and AI Bahiyah) were struck in Omani territorial waters, killing one Indian crew member and injuring eight others, while Bahrain sounded missile-alert sirens as Iran retaliated against American strikes.
• Traffic through the Strait of Hormuz declined week-over-week from July 10-12, with shipowners pausing transit decisions and war risk premiums expected to increase sharply according to Lloyd's List Intelligence.
• The escalation unraveled last month's interim U.S.-Iran ceasefire agreement and pushed Brent crude up 2% to $85 per barrel and WTI up 2.3% to $80 amid uncertainty over the vital shipping route.

The Pentagon is immediately suspending Phase 2 of its Cybersecurity Maturity Model Certification (CMMC) program, which was set to take effect November 10, requiring third-party audits for defense contractors. The pause responds to industry complaints that high compliance costs and long audit waits are forcing small and mid-sized suppliers to exit the defense supply chain, narrowing competition. A 60-day review will be conducted by a newly formed CMMC Reform Task Force.

• Program offices will now require only Level 1 or Level 2 self-assessments instead of the mandatory third-party audits that Phase 2 would have imposed
• The Pentagon acknowledged that 'CMMC compliance is forcing innovative companies out of the Defense Industrial Base' and cited 'paralyzing costs' as a barrier to weapons production speed
• A CMMC Reform Task Force will collect industry feedback through a public request for information and deliver recommendations within 60 days

Hydro One Limited, Ontario's largest electricity transmission and distribution utility, will release its second quarter 2026 financial results on August 12, 2026, before market open. The company will host an investment community teleconference at 8 a.m. EDT the same day to discuss results and outlook.

• Hydro One serves 1.5 million customers with $39.7 billion in assets as of December 31, 2025, and generated $9 billion in annual revenues in 2025
• The company invested $3.4 billion in transmission and distribution networks in 2025 and purchased $3.0 billion in goods and services
• Financial results will be accessible via webcast through the Investor Relations section, with a rebroadcast available after the live call

US stocks fell on Monday as tensions between the US and Iran drove oil prices up sharply (WTI +9.4%, Brent +9.6%), raising inflation concerns and pressuring growth-sensitive sectors. The Dow dropped 138 points (-0.26%), while the Nasdaq declined 1.55% led by semiconductor losses. Markets now await key earnings reports, CPI data, and Fed Chair testimony amid elevated geopolitical and inflation risks.

• President Trump announced plans to blockade the Strait of Hormuz and seek 20% reimbursement on cargo, sending oil above $78/barrel and reviving inflation fears that pushed markets to price in at least one 25-basis-point rate hike by year-end
• Semiconductor stocks led declines with SK Hynix falling 6% on debut, Intel down 7%, AMD down 4%, and Sandisk plunging 13% as investors reassessed valuations after the AI-driven rally
• Major bank earnings from JPMorgan, Goldman Sachs, Morgan Stanley and others kick off this week alongside June CPI, PPI, retail sales data and Fed Chair Warsh testimony before Congress

Fed Governor Christopher Waller warned that the Federal Reserve may need to hike interest rates if this week's inflation data comes in higher than expected. June's Consumer Price Index is expected to show inflation declining to 3.8% yearly, but Waller said multiple months of improvement are needed before inflation concerns ease. The warning marks a shift from earlier expectations of continued rate cuts.

• About 40% of traders now predict a quarter-point rate hike at the Fed's July 29 meeting, a sharp reversal from earlier hopes for continued cuts after three consecutive reductions in 2025
• June CPI is expected to show a 0.1% monthly decline with yearly inflation at 3.8% (down from 4.2%), while PPI is forecast at 6.2% yearly (down from 6.5%)
• War in Iran has disrupted a key maritime route carrying 20% of global oil, pushing energy prices higher and causing inflation to seep into broader economy through food and transportation costs

Robert Minter, Director of Investment Strategy at Abrdn, argues that gold has become a structurally important asset in the global financial system despite recent price consolidation around $4,000 per ounce. He views the recent correction as removal of speculative excess rather than a fundamental weakness, with continued central bank buying supporting gold's evolved role as a core monetary asset amid rising sovereign debt concerns.

• Minter sees recent price weakness as technical and positive, removing speculative length while leaving strongest demand sources (central banks) intact
• Professional investors are viewing $4,000 gold as a buying opportunity to increase allocations rather than a warning sign
• Gold's role has evolved beyond traditional inflation hedge into a core monetary asset as governments globally show no policy to control debt, with Minter noting 'gold continues to be the only currency that isn't somebody else's debt'

Oil prices surged approximately 9% after President Trump announced a naval blockade of Iranian ports and demanded a 20% fee on all cargo passing through the Strait of Hormuz. WTI oil climbed above $74.50-$75.00 while Brent oil tested $83.00, driven by fears of supply disruption as tensions escalate in the Middle East with Iran and Houthi involvement.

• Trump's proposed 20% transit fee is 10 times higher than Iran's historical 2% charge, raising concerns among Gulf countries and increasing likelihood of Iranian vessel attacks
• Global oil reserves remain significantly depleted from previous Strait of Hormuz blockades, making another disruption a serious bullish catalyst that could push prices toward April-May 2026 levels
• Natural gas declined to test $2.90 support as recent EIA data showed stocks building faster than expected, despite high demand forecasts for the next seven days