Macro View - July 13, 2026 (EOD)

 ## Macro Summary Today’s market action was heavily influenced by escalating geopolitical tensions in the Middle East, particularly the renewed conflict between the U.S. and Iran centered around the Strait of Hormuz. President Trump’s formal notice to Congress about the resumption of hostilities and the U.S. reinstating a blockade on Iranian ships sparked a sharp jump in oil prices, which in turn pressured risk assets, especially technology and semiconductor stocks. The heightened uncertainty around energy supply and potential broader conflict weighed on investor sentiment, leading to a notable selloff in high-growth sectors that had been buoyed by AI optimism earlier in the year. The chip sector, already under pressure from a recent memory chip ETF plunge, saw further declines as SK Hynix’s Nasdaq debut faltered and shares dropped sharply in Seoul. This weakness in semiconductors, combined with concerns over AI-related capital expenditure costs rising, contributed to a broader tech selloff. Meanwhile, energy stocks and commodities benefited from the geopolitical risk premium, with oil surging on fears of supply disruptions. The market’s risk-off tone was further compounded by cautious positioning ahead of key inflation data due tomorrow, as investors weigh the potential for renewed Fed tightening amid persistent inflation concerns. ## Economic Data Reaction No major U.S. economic data was released today. However, market participants are bracing for tomorrow’s core CPI report, which is expected to be a critical indicator for the Fed’s next policy move. The anticipation of this data is adding to the cautious tone, especially given recent Fed commentary warning that inflation remains “hot” and could prompt further rate hikes. ## Fed & Central Banks Fed Governor Christopher Waller reiterated that another rate hike could be necessary if inflation readings remain elevated, signaling a hawkish stance despite recent market volatility. This commentary reinforced expectations that the Fed remains vigilant on inflation, contributing to the cautious risk sentiment. No other central bank announcements were noted today, but the ECB’s bond yields in Europe held near multi-week highs amid inflation fears stoked by the Middle East conflict. ## Rates & Bonds - 10-Year yield: data not available - 2-Year yield: data not available - Yield curve implications: data not available ## Currency & Dollar The U.S. dollar strengthened amid the geopolitical tensions and safe-haven demand, putting additional pressure on equity markets, particularly tech stocks sensitive to dollar strength. The dollar’s resilience is also reflective of investors’ expectations for continued Fed tightening given the inflation outlook and hawkish Fed commentary. This dollar strength is likely to weigh on commodity-importing countries and emerging markets in the near term. ## Commodities Wrap - Oil: Crude oil prices surged over 3%, climbing above $79 per barrel as the U.S. reinstated a blockade on Iranian ships in the Strait of Hormuz, raising fears of supply disruptions. This jump in oil prices is the primary driver behind today’s energy sector strength and broader inflation concerns. - Gold: Gold prices declined modestly, slipping below $4,000 as the dollar strengthened and investors sought liquidity amid risk-off flows. - Other notable moves: Silver plunged 15%, reflecting a sharp risk-off move in precious metals amid renewed inflation fears and geopolitical uncertainty. ## Global Markets Close - Europe: European stocks closed mixed but generally lower, with the FTSE 100 edging higher despite the oil price surge, while major continental indices like the DAX and CAC 40 posted modest gains of 0.08% and 0.31%, respectively. European bond yields remained elevated, reflecting inflation concerns tied to the Middle East tensions. - Asia setup for tonight: Asian markets opened lower, with South Korea’s KOSPI tumbling over 5% amid a deepening tech rout led by SK Hynix’s sharp share price decline following its Nasdaq debut. The broader Asia-Pacific region is expected to remain volatile as investors digest the geopolitical risks and chip sector weakness. ## Tomorrow's Macro Focus Market attention will turn to the U.S. core Consumer Price Index (CPI) report, a key inflation gauge that will heavily influence Fed policy expectations. Given Fed officials’ hawkish comments and persistent inflation concerns, the CPI print could trigger significant market moves. Additionally, Q2 earnings from major banks such as JPMorgan and Bank of America will provide insight into financial sector health amid the current macro environment. Traders will also monitor ongoing developments in the Middle East for further geopolitical risk signals that could impact energy markets and global risk appetite.