Financial markets closed with US equities lower on July 21st, pressured by rising oil prices, as the Dow Jones Industrial Average fell over 300 points. Among the most actively traded US stocks, concerns emerged that Apple's price increases could dampen core users' willingness to upgrade. Popular US-listed Chinese stocks mostly advanced, with Alibaba Group Holding Ltd (NYSE: BABA) rising 4.69%, while Nanmo Technology fell 8.33%.
In commodities, oil prices edged higher, gold stabilized, and London copper prices moved up. European stock markets declined, weighed down by escalating tensions in the Middle East.
Key Macro Developments
The US Central Command announced new American strikes against Iran. Former President Donald Trump vowed to make Iran "pay a price" for the deaths of US service members, even as mediators worked to de-escalate the conflict. A US official stated that Iranian attacks this month have injured nearly 100 American military personnel. Separately, reports emerged that the Pentagon had concealed dozens of US casualties from the Iran conflict. In trade policy, the Trump administration introduced a new incentive, offering a 50% tariff cut on aluminum for companies that build factories in the US. Trump also stated that Israeli Prime Minister Benjamin Netanyahu would not be arrested while in the United States. In a significant trade move, the US announced it would impose 50% tariffs on some Canadian goods, marking the first use of a long-dormant legal provision.
In the UK, new Prime Minister Andy Burnham appointed several cabinet members. Yemen announced the resumption of its oil exports. US Strategic Petroleum Reserve crude inventories fell to their lowest level since March 1983. The US military stated it had forced seven merchant ships to divert during its maritime blockade of Iran. Saudi Arabia said it would take measures to protect its vessels. Reports indicated damage to a US airbase in Jordan was far more extensive than initially reported. China's embassy in Russia confirmed a Chinese citizen injured in a drone attack was not in life-threatening condition.
Corporate News Highlights
A US federal judge temporarily blocked the proposed transaction between Paramount Global's Skydance Media and Warner Bros. Discovery Inc (NASDAQ: WBD). A US appeals court overturned the certification of a shareholder class-action lawsuit against Boeing Co (NYSE: BA). Advanced Micro Devices Inc (NASDAQ: AMD) expanded its AI collaboration with Microsoft Corp (NASDAQ: MSFT), with Azure set to deploy AMD's Helios system and next-generation AI chips. Warner Music Group Corp. (NYSE: WMG) will hold its earnings conference call on August 6th. Zoetis Inc (NYSE: ZTS) faces a securities fraud lawsuit, with the investor claim filing window approaching. After its stock plummeted 46%, Netflix Inc (NASDAQ: NFLX) launched a bond offering, returning to the debt market after a two-year hiatus. Alphabet Inc (NASDAQ: GOOGL) shares rose on reports that Google is developing a new chip to enhance AI model efficiency. BlackRock Inc (NYSE: BLK) is leading a consortium to secure $12 billion in financing for a new Meta Platforms Inc (NASDAQ: META) data center in Texas.
Analyst Commentary and Market Views
DoubleLine Capital suggested rising US Treasury yields could help the Federal Reserve keep interest rates unchanged. Goldman Sachs noted hedge funds were selling US tech stocks at a record pace. SK Hynix warned that the AI storage boom may be difficult to sustain. Crude oil prices saw a modest increase driven by Middle East tensions. In US equities, declines in Apple Inc (NASDAQ: AAPL) and Tesla Inc (NASDAQ: TSLA) dragged on the broader market, while chip stocks rebounded ahead of a crucial earnings season. Headlines focused on Trump's threats against Iran and the halted Paramount-Warner deal. In currency markets, the US dollar stabilized after volatility, while the Canadian dollar and British pound fell. Trump's comments about Iran paying a price contributed to Monday's oil price rise. The US Treasury market followed UK gilts lower, also pressured by Trump's threats against Iran. In European debt markets, fiscal risks weighed on UK gilts, causing them to underperform peers. A profile of UK political figures highlighted new Prime Minister Andy Burnham's journey from local governance star to the occupant of 10 Downing Street.
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