MARKET WRAPS
Stocks:
European shares were up Wednesday as crude oil hit nearly seven-week highs and a rally in tech stocks took a pause ahead of key earnings.
Brent climbed 4.1% to $94.72 a barrel after President Trump minimized the prospect of immediate talks with Iran.
The rise in oil prices along with natural gas and other commodity prices has lifted near-term inflation expectations, Deutsche Bank said.
The U.S. launched attacks at Iran for the 11th night in a row, reducing hopes of de-escalation and increasing transport through the Strait of Hormuz.
"If renewed tensions in the Gulf were to push energy prices higher and keep inflation above target for longer, [European Central Bank] policymakers could be forced to consider additional rate hikes," Franklin Templeton said.
The ECB is expected to deliver one final rate hike in September
with inflation expected to remain above the ECB's 2% target over the coming quarters, it added.
Meanwhile, the U.K. 's rate of inflation in June declined to its lowest level in more than a year
after gasoline costs fell, increasing prospects that the Bank of England will keep its key interest rate on hold next week, even with prices likely accelerating in the months ahead.
Markets price in a total of 40 basis points of BOE interest rate rises in 2026, LSEG data show.
RSM UK expects inflation to rebound to around 3.3% in the fall
as higher energy costs, supply-chain pressures and increased food prices feed through, with a risk of a higher rate if oil prices surge further. It expects rates to remain unchanged and sees no cuts before 2027.
Investors are also positioning themselves for a wave of major technology earnings.
"Investors are moving back into AI names ahead of major earnings, with Alphabet now the next key test for capex appetite and cloud/AI monetisation," Tickmill Group said. "The market does not need perfection, but it does need evidence that spending intentions remain intact and that AI infrastructure demand is not slowing at the margin."
U.S. Markets:
Stock futures were down Wednesday as investors geared up for earnings from some of the biggest tech companies, including Alphabet, Tesla and IBM.
Forex:
The dollar eased
but remained close to a one-week high reached overnight as the U.S.-Iran conflict pushed up oil prices.
Sterling fell
after data showed inflation eased more than expected in June, reducing the prospect of the Bank of England raising interest rates.
Bonds:
Eurozone government bond yields opened slightly higher as oil prices increased, while lower-than-expected headline U.K. inflation for June had little immediate impact.
Front-end eurozone rates
were expected to remain confined within a range of consistent market expectations of a terminal European Central Bank deposit rate between 2.50% and 2.75%, said Santander CIB.
Treasury yields were trading little changed in early trade, as investors navigated between higher oil prices and hopes of an end to hostilities between the U.S. and Iran.
J.P. Morgan is taking a wait-and-see position before opting for outright duration in U.S. front-end Treasurys.
"With front-end yields remaining near local highs, the Federal Reserve in its blackout period, and labor market data still weeks away, we continue to prefer patience before advocating for outright duration positions at current levels."
Energy:
In early European trading, Brent was up 4.1% while WTI futures were up 4.1%.
"Factoring in the renewed disruptions from the Persian Gulf, risks to Saudi crude exports from the Red Sea, and developments in the Black Sea, one may argue that Brent at just over $91 a barrel is undervalued , " ING said. "Particularly if these disruptions persist into August."
Metals:
Gold prices rose past $4,100 a troy ounce on dip buying as investors weighed risks in the Middle East and awaited the Fed's meeting next week for more cues on the monetary policy outlook.
Gold chart
Comex gold futures were eyeing resistance at $4,200
an ounce, RHB Retail Research said. The commodity closed Tuesday with a bullish candlestick pattern on the daily chart.
Copper
Copper declined in early trading. Investors were digesting macro concerns stemming from the Middle East conflict as well as supply tightness in China, ANZ Research said.
Iron
Iron ore fell in early trading as the global demand outlook continued to deteriorate, ANZ Research said.
EMEA HEADLINES
Airbus Shares Climb on Midterm Profitability Goal
Airbus shares jumped after the group said it aimed to significantly boost its profitability in the coming years, betting that demand for commercial and military aircraft will remain strong and continue to fuel growth.
The European aircraft maker said that adjusted earnings before interest and taxes-its preferred measure of profitability-would grow to a range between 12 billion euros and 13 billion euros ($13.68 billion to $14.82 billion) in 2029, up from 7.13 billion euros in 2025.
Equinor Hikes Buyback as Earnings Jump on Higher Energy Prices
Equinor hiked its quarterly share buyback as production growth enabled the company to capture higher oil and gas prices triggered by the conflict in the Middle East.
The Norwegian energy major on Wednesday said second-quarter adjusted operating income-its preferred measure-jumped over 75% to $11.48 billion from the same period a year prior. This compares with the $11.37 billion analysts had expected, according to a company-compiled consensus.
U.K. Inflation Falls to 15-Month Low
The U.K.'s rate of inflation in June declined to its lowest level in more than a year after gasoline costs fell, increasing prospects that the Bank of England will keep its key interest rate on hold next week, even with prices likely accelerating in the months ahead.
Consumer prices were 2.6% higher in June than the same month of last year, down from a 2.8% inflation rate in both April and May, the Office for National Statistics said Wednesday. That marked the lowest annual increase in prices since March 2025. Economists polled last week by The Wall Street Journal expected a reading of 2.7%.
Sandoz to Engage With U.S. Policymakers After Trump's Tariff Plan
Sandoz Group said it would engage with U.S. policymakers after President Trump announced a 100% tariff on generic drugs from 2028, but that it is too early to assess how the plan will affect its manufacturing or investments.
Trump posted on social media Tuesday that he would give manufacturers of generic drugs time to move facilities to the U.S. before putting in place a 100% tariff starting in August 2028.
GLOBAL NEWS
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.
U.K. Inflation Falls to 15-Month Low
The U.K.'s rate of inflation in June declined to its lowest level in more than a year after gasoline costs fell, increasing prospects that the Bank of England will keep its key interest rate on hold next week, even with prices likely accelerating in the months ahead.
Consumer prices were 2.6% higher in June than the same month of last year, down from a 2.8% inflation rate in both April and May, the Office for National Statistics said Wednesday. That marked the lowest annual increase in prices since March 2025. Economists polled last week by The Wall Street Journal expected a reading of 2.7%.
War Risk to Oil Supplies Grows With Red and Black Sea Disruptions
Global oil supplies face a growing list of disruptions, as a threat by Yemen's Houthi militants to blockade Saudi Arabia began to take shape and Ukrainian attacks on Russia's Black Sea shipping disrupted operations of a key pipeline there.
Two oil tankers loaded with Saudi crude oil turned around Tuesday. A successful blockade would open another front in the U.S.-Iran conflict and compound the disruption caused by Iran's stranglehold on the Strait of Hormuz.
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.
Mamdani Says New York Doesn't Have Authority to Arrest Netanyahu
New York City Mayor Zohran Mamdani said Tuesday that the city doesn't have the authority to arrest Prime Minister Benjamin Netanyahu, but he urged the federal government to execute the International Criminal Court's arrest warrant for the Israeli leader.
The mayor, a sharp critic of the Israeli government, had said earlier that he was exploring whether the prime minister could be arrested on a visit to New York. Mamdani accused Netanyahu of committing genocide in Gaza, a charge the Israeli government has rejected.
Trump's Tariffs Enter New Phase, Ending Months of Calm
(MORE TO FOLLOW) Dow Jones Newswires
July 22, 2026 05:01 ET (09:01 GMT)
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