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July 14, 2026 - 05:02
5 minutes
(Bloomberg) — Oil advanced for a second day and Asian stocks fell as the standoff between the US and Iran intensified, reigniting inflation concerns and boosting bets for an interest-rate hike.Brent rose as much as 2.8% to $85.64 after President Donald Trump reinstated the US blockade of Iranian ships transiting the Strait of Hormuz. Trump also demanded a 20% reimbursement on all other cargo shipped through the waterway.Treasuries and the dollar steadied as traders viewed the odds of a US interest-rate increase later this month as a coin toss ahead of Tuesday’s US consumer price index data. Money markets priced in about 50% odds of a Federal Reserve hike in July as Governor Christopher Waller said officials may need to raise rates to tame price pressures.MSCI’s gauge Asia Pacific shares fell 1% and US equity-index futures lost 0.3%. The semiconductor sector remained in focus after a rout in chip stocks in Seoul on Monday. SK Hynix Inc. slipped 5%, following its record 15% tumble the day before. Taiwan Semiconductor Manufacturing Co. fell 1.8%.The latest wave of attacks between the US and Iran dashed hopes for a near-term normalization of traffic through the Strait of Hormuz. The escalation adds another layer of uncertainty ahead of a pivotal week for markets, with earnings season kicking off alongside US inflation data and Fed Chair Kevin Warsh’s congressional testimony, both seen as key to the outlook for interest rates.“Surging oil prices and yields are already speaking clearly to a worsening inflation outlook,” said Hebe Chen, senior market analyst at Vantage Global Prime. “That uncertainty helps explain today’s wavering sentiment rather than a full-scale flight from risk, with investors increasingly alert to the deteriorating backdrop but not yet pricing in the worst-case scenario.”The flare-up comes as investors are increasingly questioning whether the enormous sums being poured into artificial intelligence will generate commensurate returns.An AI-fueled stock rout in South Korea on Monday spilled over into the US market, underscoring concerns that the boom has become overextended. The Philadelphia Semiconductor Index slumped 4.8%.“Uncertainty around the Middle East continues, but we think the AI wave is what will drive markets over the next few weeks, especially as earnings season kicks off,” said Sonu Varghese at Carson Group.What Bloomberg’s Strategists Say…“Crude’s 9% jump on Monday delivered some pain to other assets, but the read across was still rather modest with equities. A key reason for that dynamic is the way that market-based inflation expectations signal an enduring assessment that energy costs won’t sustainably feed through into the real world.”— Garfield Reynolds, Markets Live team leader. For more on the analysis, click here.Investors are now turning their focus to US inflation data after the Fed’s Waller said policymakers may need to raise rates in the near term if underlying inflation continues to signal broad price pressures.Treasury two-year yields, which are relatively sensitive to changes in Fed policy expectations, held at 4.28%, after touching the highest since February 2025.The surge in short-term yields reflects growing expectations that the Fed will need to raise rates sooner to rein in price pressures from the rebound in global energy prices and signs of a resilient US economy.In data due Tuesday, the consumer price index is expected to slow to 3.8% in the year through June, from 4.2% in May, according to a Bloomberg survey of economists. Warsh will also make his first appearance before Congress as Fed chair.Corporate News:Shein Global Holdings Ltd. is seeking to list in Hong Kong as soon as in August after securing approval from China’s securities regulator, according to people familiar with the matter. A unit of billionaire Kumar Mangalam Birla’s conglomerate agreed to buy Shell Plc’s renewable energy assets in India for an enterprise value of 172 billion rupees ($1.8 billion) in one of the largest clean energy deals in the country. Some of the main moves in markets:StocksS&P 500 futures fell 0.3% as of 12:01 p.m. Tokyo time Nikkei 225 futures (OSE) fell 0.5% Japan’s Topix fell 0.1% Australia’s S&P/ASX 200 fell 0.4% Hong Kong’s Hang Seng fell 0.6% The Shanghai Composite fell 0.5% Euro Stoxx 50 futures fell 0.8% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1392 The Japanese yen was little changed at 162.33 per dollar The offshore yuan was little changed at 6.7856 per dollar CryptocurrenciesBitcoin rose 0.6% to $62,500.64 Ether rose 0.9% to $1,781.52 BondsThe yield on 10-year Treasuries was little changed at 4.62% Japan’s 10-year yield declined three basis points to 2.755% Australia’s 10-year yield advanced six basis points to 4.92% CommoditiesWest Texas Intermediate crude rose 1.8% to $79.58 a barrel Spot gold rose 0.3% to $4,014.63 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Elaine Lai.©2026 Bloomberg L.P.
