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Opening Call:
European stock futures were higher after Asia stocks traded mixed. U.S. Treasurys were flat, the dollar weakened. Gold strengthened and oil rose.
Equities:
European futures were higher as investors looked ahead to earnings from major U.S. technology companies.
Recent weakness among chip stocks has been fueled by fears that China's newest artificial-intelligence players could disrupt the field. Others have been nervous that the fundamentals in the business, while promising, won't live up to the valuations in the sector.
More sanguine investors have noted that new competition from overseas doesn't eliminate the need for companies to continue to spend billions to support the AI build-out.
"It's just kind of a hiccup along the way to what's been a pretty long AI infrastructure spending cycle that's likely to continue," said Michael Arone, chief investment strategist at State Street Investment Management.
Forex:
The U.S. dollar slightly weakened against the euro, and could soon fall back below $1.14 if energy prices remain elevated, said ING's Francesco Pesole.
Expectations the European Central Bank will raise interest rates further have provided support to the euro but there is limited scope for markets to price in further tightening, he said.
Markets have priced in 45 basis points of rate rises by year-end, according to LSEG, and this pricing is unlikely to exceed 50 basis points, he added. Even at the peak of the spring oil rally, markets never priced the year-end deposit rate rising above 2.75% from 2.25% currently.
"That suggests further oil price gains may increasingly weigh on euro-dollar," he said.
Bonds:
The yield on U.S. Treasurys were flat amid inflation fears building, not because of a confident rotation into stocks, according to Mark Malek, chief investment officer at Siebert Financial. "The markets are behaving right but for the wrong reasons," he said.
Malek said investors focused on buying the dip are missing the forest for the trees, looking past inflationary forces that should be driving valuations down.
The spread between 10-year and two-year Treasury yields is expected to narrow further over the coming months, potentially leading to an inversion, said Capital Economics' James Reilly.
"We think that continued escalation in the Strait of Hormuz could lead to the curve inverting outright," said the senior markets economist.
Energy:
Oil prices rose, as Goldman Sachs warned that benchmark Brent crude could exceed $120 a barrel in the fourth quarter and average $100 in 2027 if the Strait of Hormuz remains closed.
Brent rose to its highest level since mid-June, after more fighting in the Middle East overnight.
"This won't be an easy task," said analysts at ING, adding that "large divisions remain between the U.S. and Iran."
Meanwhile, Yemen's Iran-backed Houthi militia announced a blockade of Saudi shipping amid a standoff with the kingdom--a development that would severely disrupt supplies, preventing oil flows to Asia from moving south via the Bab el-Mandeb Strait.
Still, looking at oil price action, analysts noted that the market might not be convinced that the blockade will be successful.
Metals:
Gold prices were higher, having gained more than 1% as diplomatic efforts for a U.S.-Iran ceasefire pause oil's rally.
"Bullion is holding that line despite a firmer dollar and higher yields, as traders weigh Middle East inflation risk against mediation headlines, " said analysts at Saxo Bank.
Escalating attacks in the Middle East pushed oil prices to their highest level in over a month earlier in the week, raising concerns over inflation pressure and interest-rate hikes, which increased the opportunity cost of holding non-yielding assets such as gold.
While the Federal Reserve is widely expected to keep rates unchanged at next week's meeting, traders currently see more than a 60% chance of a rate hike in September, according to the CME FedWatch Tool.
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Copper fell as investors digest macroeconomic concerns stemming from the Middle East conflict as well as supply tightness in China, ANZ Research analysts said.
Nanhua Futures analysts noted that domestic spot liquidity continues to shrink in China, as cross-regional supply reallocation remains insufficient.
Meanwhile, prices faced pressure from the off-peak season weighing on end-user demand, Nanhua added.
TODAY'S TOP HEADLINES
Trump's Tariffs Enter New Phase, Ending Months of Calm
WASHINGTON-President Trump is preparing to reshape the legal justification for his tariff regime this week and push negotiations with North American trading partners into high gear, setting off a new phase of trade uncertainty for businesses after months of relative calm.
When the Supreme Court in February struck down most of Trump's second-term tariffs, he immediately replaced the illegal duties with a temporary 10% tariff that applied to nearly all U.S. imports. That 10% duty is legally limited to 150 days, which ends early Friday. The interim period ushered in relative stability in trade policy as officials crafted a new set of levies to replace it-a welcome relief for trade-reliant firms buffeted by constant policy shifts over the past year.
Trump Approves Landmark Nuclear Deal With Saudi Arabia in Big Win for Kingdom
President Trump has formally approved a landmark agreement with Saudi Arabia that will provide the country with a civilian nuclear program and potentially open the door to uranium enrichment in the kingdom's territory, according to administration officials.
The new deal, which would last 30 years, is estimated to be worth tens of billions of dollars. It is designed to give American companies a central role in developing Saudi Arabia's nuclear infrastructure while shutting out other foreign competitors.
Google Was a Lifeline for Publishers. Now Some Are Thinking of Cutting It Off.
One of the richest sources of online information is re-evaluating its relationship with Google.
Reddit, the online message board that powers a swath of Google search results, has discussed shutting off the technology giant's access to its content for AI use, according to people familiar with the matter.
Utilities Join Trump Pledge to Limit AI-Driven Increases in Electricity Bills
WASHINGTON-The nation's largest utilities and developers of data centers have signed on to President Trump's pledge to pay more for the electricity needed to run artificial-intelligence models, hoping to quell a backlash that has fueled protests and political proposals to halt the AI boom.
NextEra Energy, Duke Energy, Equinix and Digital Realty are among the nearly 200 entities committing to the president's promise aimed at ensuring AI's energy consumption doesn't push up electric bills for consumers across the U.S., according to a White House list of signatories obtained by The Wall Street Journal. Trump is expected to announce the new commitments at a Thursday event at the Environmental Protection Agency, a White House official said. Republican governors including Louisiana's Jeff Landry and Georgia's Brian Kemp also signed the pledge and are expected to attend.
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Expected Major Events for Wednesday
04:30/NED: Jun House Price Index
06:00/UK: Jun Producer Price Index
06:00/UK: Jun CPI
06:00/NOR: 2Q Business tendency survey
06:00/DEN: Jul Business tendency survey
08:00/POL: Jun Agricultural prices
08:00/POL: Jun Retail Sales
08:00/ICE: Jun Labour Force Survey
08:30/UK: May UK House Price Index
09:00/BEL: Jul Consumer Confidence Survey
10:00/IRL: Jun WPI
12:00/POL: Jun Broad money M3
23:01/UK: BRC Consumer Sentiment Monitor
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(END) Dow Jones Newswires
July 22, 2026 00:01 ET (04:01 GMT)
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