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Last updated: July 14, 2026, 8:30 AM ET

Middle East Tensions Drive Oil Prices Higher, Fuel Inflation Fears

Crude oil prices amid escalating tensions in the Strait of Hormuz, with Brent crude, the international benchmark, breaching that level for the first time in a month. Renewed missile attacks on ships crossing the vital waterway and put commodity supplies at risk far beyond oil and gas. U.S. Treasury yields in the Middle East pushed oil prices higher, reigniting inflation concerns. Traders subsequently boosted wagers on faster Bank of England and European Central Bank interest-rate hikes after the surge in oil prices reignited inflation fears. Gold prices, with traders focusing on upcoming U.S. data. Asian oil buyers are also looking to U.S. crude again as the Iran war intensifies, prompting refiners to seek more American supply.

Big Banks Deliver Record Profits Amid Broader Economic Uncertainty

The largest banks in the United States collectively raked in tens of billions of profits in the second quarter, despite persistent inflation and geopolitical conflicts. Wall Street is poised to report a bumper quarter, with a resurgence in mega-mergers and the SpaceX IPO expected to have generated total fees of about $11 billion for six major banks. However, despite these strong earnings, "tectonic" risks loom. International Business Machines shares, citing weakness in the latest quarter as several large deals failed to close and supply chains shifted. Meanwhile, Bank of America, suggesting investors reduce exposure.

Emerging Markets Attract Investors Amid Global Uncertainty

Emerging-market bonds' outperformance over Treasuries is attracting growing numbers of investors looking to capitalize on compelling carry-trade returns. Emerging-market stocks and currencies, however, were little changed as investors in the Middle East and awaited the latest U.S. inflation report. Ashmore Group Plc reported net inflows for the three months through June, as clients embraced emerging-market funds. In Southeast Asia, Thailand by visitors from India, reversing a plan to scrap visa-free entry that had hurt tourism.

Tech Sector Faces Challenges Amid Supply Chain Shifts and Investment Shifts

Tower Semiconductor shares, with the Israeli chip manufacturer set to spend $3 billion on expanding production in Japan, supported by a $1 billion government grant. In contrast, Ericsson due to rising component costs and declining sales in North America and Europe. The commercial fusion race is shifting from laboratories to supply chains, with rising investment in the sector in the hope it can provide abundant carbon-free electricity. Chinese AI start-up DeepSeek is weighing new fundraising just a month after closing its first round, indicating a swift pace of capital injection.

Global Economic Outlook Hinges on Inflation Data and Central Bank Policy

U.S. small business confidence, with the National Federation of Independent Business reporting its optimism index rose 2.1 points. However, traders are boosting bets on interest rate hikes from the Bank of England and the European Central Bank following the surge in oil prices. TS Lombard Chief Economist Freya Beamish to constrain the artificial intelligence boom gripping the U.S. The dollar could rise if upcoming U.S. core inflation data for June are higher than expected.

Other Market Developments

Lead prices dropped after the biggest delivery into London Metal Exchange warehouses in records going back to 1970. Shell Plc received more tax relief on its $20 billion Nigerian oil project, with Nigeria granting a production-linked tax credit. China's central bank through outright reverse repurchase agreements to help companies and individuals handle upcoming tax payments. Deutsche Bank AG in a dispute over losses linked to sanctions on Russia.