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Last updated: August 4, 2026, 11:31 PM ET

Middle East Tensions Ease, Oil Prices Fall

Oil futures declined for a third consecutive day amid optimism that a deal could be reached to reopen the Strait of Hormuz, potentially freeing up Persian Gulf supplies. Treasury Secretary Bessent stated that the U.S. could reach an agreement with Iran to reopen the Strait of Hormuz "today or tomorrow." This prospect led to a sharp fall in oil prices, with crude futures reaching a three-week low. The potential deal also eased concerns about the outlook for inflation and reduced the likelihood of further Federal Reserve interest rate hikes. Asian currencies consolidated against the dollar but may strengthen on hopes for the Strait of Hormuz reopening, which could bolster appetite for risky assets. Japanese stocks rose 2.3%, led by electronics, on renewed hopes for a U.S.-Iran deal to reopen the Strait of Hormuz. Australian stocks climbed to an intraday record on easing concerns over the US-Iran conflict and supportive domestic economic signals. U.S. stocks surged and oil fell sharply after Secretary Bessent's comments regarding a potential deal. The WSJ Dollar Index edged lower, down five of the past six trading days.

AI Sector Experiences Volatility and Growth

Shares of SK Hynix Inc. advanced, lifted by an overnight rally in U.S. chipmakers and speculation that the Korean firm may soon unveil buybacks and other details of a broader shareholder return plan. Asian shares tracked Wall Street higher as investors returned to the artificial intelligence trade, helping to stoke a rally in semiconductor stocks. The semiconductor index fell into a bear market despite "unprecedented" profit increases. Whale Rock Capital Management’s flagship hedge fund saw a 21.7% drop in July, erasing about half of its gains for the year amid an AI selloff. SpaceX spent $15.8 billion on AI projects in the second quarter and does not plan to slow down. Despite these significant AI investments, SpaceX's shares slid even as the group reported its quarterly revenues nearly doubled. The Elon Musk-led rocket company's capital expenditures jumped nearly seven times from a year ago, with revenue also rising. AMD shares fell 8% as Elon Musk committed to Nvidia chips for SpaceX. The company's sales to data centers doubled in the latest quarter, but its revenue only narrowly beat analysts’ estimates.

Public Offerings and Market Debuts

Evoken, the Chinese startup behind AI design agent Lovart, is considering an initial public offering in Hong Kong, people familiar with the matter said, the latest such firm seeking to tap booming investment. India is expanding the size of its offering to raise $3.3 billion amid strong demand for LIC. Manipal Health Enterprises Ltd. is set for a muted stock market debut in Mumbai after its $960 million initial public offering, as gray market trading signals cooling investor sentiment. Attovia Therapeutics Inc. an early-stage drug developer focused on immune system diseases with high unmet need, raised $289 million in a U.S. initial public offering that priced at the top of its market.

Corporate Earnings and Outlooks

Wynn Resorts Ltd. reported a second-quarter profit of $140.1 million, compared with $66.2 million a year earlier, driven by demand from wealthy customers. The company also stated that its first casino located in the Middle East will open in September of next year. Booking Holdings maintained its full-year outlook for gross bookings and revenue due to resilient travel demand, even as the Middle East conflict weighs on flight prices and capacity. Prudential Financial Inc. reported second-quarter results that beat Wall Street estimates, as revenue from its asset manager surged. DuPont de Nemours reported a higher profit in the second quarter as sales rose across the chemicals and materials company’s segments. Archer-Daniels-Midland Co. raised its 2026 profit outlook for a second time, as the crop trader increasingly looks to biofuels as a major driver of growth. Cummins raised its outlook for the year after reporting higher profit and sales in the second quarter, boosted by accelerating orders for standby power for data centers and improving North American demand.

Real Estate and Investment Activity

Apollo Global Management Inc. is investing $1.02 billion in a joint venture with Starwood Real Estate Income Trust, a commercial property vehicle that has struggled to provide liquidity. The team working on Citadel’s new Manhattan skyscraper expects to secure a $3.3 billion construction loan for the project. Tanger Inc. boosted its outlook for a second time this year, as stronger domestic travel and early back-to-school shoppers have boosted traffic and sales at the real estate investment trust’s shopping centers. A historic Pittsburgh private school is looking to borrow $30 million in the municipal bond market for campus upgrades as it fights for students.

Economic Indicators and Market Trends

The U.S. trade deficit dipped in June, retreating from a busy month in May as imports and exports both declined. Treasury yields cooled amid a busy day of U.S. economic indicators and ahead of Friday’s employment report from the Bureau of Labor Statistics. U.S. natural gas futures lost ground as temperature forecasts were revised lower while production and inventories remained high. Bond traders have been spending millions of dollars to guard against sharp declines in long-dated Treasuries that risk igniting a bigger bout of volatility in the $31 trillion market. The U.S. Treasury will need to increase the sizes of at least some of its fixed-rate borrowing programs next year but is unlikely to signal the shift just yet, according to bond dealers.

Regulatory and Legal Developments

The Senate bill to regulate digital currency needs changes to reduce risks to the financial system. The judge overseeing the Jan. 6 charges against the Oath Keepers blasted the administration’s request for a dismissal, saying it bestowed “unearned grace” on the defendants. A dozen states sued to block the $81 billion Paramount-Warner Bros. merger, with the antitrust trial expected to last 12 court days. Paramount, which struck a $111 billion deal to acquire Warner Bros., had requested a November trial. The Minnesota Department of Health identified 110 salmonella cases in an outbreak, with the F.D.A. also investigating.

Automotive and Transportation Sector

Lucid posted a wider loss in its second quarter on charges related to job cuts, as the company continues to struggle with competition and a broader downturn for electric vehicle demand. The EV maker's new boss predicts an industry "shakeout" and announced a $1.4 billion cost-cutting program. Volvo car sales slipped 4% due to weakness in China, though sales in the U.S. increased for the third consecutive month.

Healthcare and Pharmaceuticals

Gilead Sciences swung to a loss on R&D costs, though HIV-drug sales lifted revenue. The biopharmaceutical company lowered its full-year forecast for Veklury after sales of the Covid-19 treatment fell 81% in the second quarter. Eli Lilly & Co. is trading above $1,000 per share, fueled by its weight-loss drug, and some see the stock as primed for a split. Amgen lifted its outlook on strong drug sales but will end early development of an obesity treatment currently in a phase 1 study. Pfizer's quarterly results beat expectations on cancer and heart drugs, helping to offset steep declines for its Covid-19 products.

Political and Geopolitical Developments

Arizona's Democratic Governor Katie Hobbs plans to tap moderate former Mesa Mayor John Giles to serve as her lieutenant governor if she wins in November. Representative Wesley Bell beat Cori Bush in a primary rematch and will be a heavy favorite in the November election. The Trump administration revoked the visa for Brazil’s ambassador to the U.S. after Brazil delayed giving diplomatic approval to Washington’s choice for envoy to Brasilia. The U.S. could reach a deal with Iran to reopen the Strait of Hormuz soon, according to Treasury Secretary Scott Bessent. Qatar said that draft language of a deal was being circulated. The war in Iran is complicating President Trump’s agenda at home, driving up costs and showing declining support in polls.

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