Oil pared gains but continued to trade close to $90 a barrel in early European trade as further escalation in the Middle East worried investors, though U.S. stock futures largely edged higher.
Iranian strikes against U.S. forces in Jordan killed two American servicemembers and left a third presumed dead, while the U.S. responded with further attacks on Iran. Defense Secretary Pete Hegseth said the death of the U.S. servicemembers "stiffens our resolve", raising the specter of escalating American attacks and a further challenge to normalizing transit through the Strait of Hormuz.
The dollar showed little reaction to the rise in oil prices, though U.S. Treasury yields rose. U.S. stock futures were in the green, with tech stocks gaining after last week's heavy selloff.
For the day ahead, Andy Burnham will become the U.K.'s new prime minister. Investors will watch for the likely appointment of a new finance chief, and for any development on the new leader's economic policy.
Major earnings with potential to shape global equity narratives this week include Intel, Alphabet and Tesla. The European Central Bank's rate-setting body will meet Thursday.
--Brent crude oil rose 0.7% to $88.73 a barrel in early European trading after earlier trading above $90 a barrel, while West Texas Intermediate gained 0.2% to $82.67 a barrel. European natural-gas prices also jumped, topping 60 euros a megawatt-hour. The ceasefire has effectively collapsed, with Iran again declaring the Strait of Hormuz closed and the U.S. reimposing a naval blockade on Iranian ports, sharply reducing shipping through the vital waterway at a time when global crude inventories are already tight. "The conflict has intensified markedly, with a fresh wave of tit-for-tat attacks underscoring how quickly the situation is deteriorating," analysts at Deutsche Bank said. "Prospects for any diplomatic breakthrough remain dim."
--In the U.S., futures for the S&P 500 rose 0.2%, while the Dow Jones Industrial Average edged 0.1% higher. Nasdaq futures rose 0.4%.
--Asian stocks trade mixed Monday, with the South Korean market playing catch-up to Friday's AI-driven rout. The Kospi ended 4.5% lower while the Shanghai Composite Index rose 0.85%. Hong Kong's Hang Seng index gained 2.1%. The Japanese market was closed due to a public holiday.
--European stocks largely edged higher in early trade after falling at the open, with blue-chip indexes turning positive as oil pared gains. The Europe-wide Stoxx 600 was flat. Germany's DAX and the French CAC 40 both rose 0.1%. Italy's FTSE MIB was flat, while Spain's IBEX 35 rose 0.2%. The AI-heavy AEX gained 0.25% in Amsterdam, as ASML gained 0.9%. London's FTSE 100 remained 0.4% down as housebuilders slide, while British Airways-owner IAG loses 1.7% after competitor Ryanair--down 6%--reported a fall in profits, dragging the airline sector.
--The dollar traded steady, showing little reaction to an escalation in strikes between the U.S. and Iran. "In part, we think markets are now more comfortable with the risks stemming from disrupted energy supply," Monex Europe analysts said in a note. With the U.S. economy likely to slow in coming months, a modest pullback in the dollar "looks fair to us," they said. The DXY dollar index traded flat at 100.761.
--U.S. Treasury yields rose across maturities in European trade, reflecting an escalation of the Middle East conflict and a subsequent rise in oil prices. "President Trump's defense of expanded U.S. strikes on Iran has strengthened fears that the confrontation could last longer or move beyond its original objectives," Zaye Capital Markets CIO Naeem Aslam said in a note. Trump's remarks matter for oil because any escalation near production facilities, export terminals or key shipping routes could remove barrels from the global market before producers can replace them, Aslam said. The 10-year U.S. Treasury yield was up 2.9 basis points at 4.569%, according to LSEG.
--Eurozone government bond yields rose in opening trade. The rise in oil prices will concern policymakers at the European Central Bank ahead of Thursday's decision. However, money markets continued to suggest the ECB won't raise rates until September, LSEG data show. Yields on the 10-year German Bund, maturing in August 2036, rose 2.2 basis points to 3.145%.
--Bitcoin fell 1.0% to $63,845.
--Gold futures were down 0.2% at $4,010.20 a troy ounce. "The recent price action suggests that concerns over higher-for-longer interest rates are offsetting gold's traditional safe-haven appeal, leaving gold largely range-bound despite escalating geopolitical risks," said Soojin Kim, analyst at MUFG.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
July 20, 2026 04:19 ET (08:19 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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