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July 21, 2026 - 00:09
3 minutes
(Bloomberg) — Oil held near its highest close since mid-June — weighing on stocks and bonds — as an escalation in Middle East hostilities outweighed attempts to bring about a pause in the war.West Texas Intermediate crude opened steady, as traders watched for disruptions to Saudi Arabian exports after Houthi rebels threatened to blockade a key export route through the Red Sea. Worries that higher energy costs could boost inflation spurred bond losses. Equity futures pointed to declines in Sydney and Hong Kong, while S&P 500 contracts were steady after the US benchmark dipped on Monday. Tokyo was set to open higher after a holiday.President Donald Trump vowed that Iran “will pay” for killing three US soldiers in recent days, even as mediators proposed a new truce. Saudi Arabia said it would take all necessary measures to protect its ships following the threats by the Tehran-backed Houthi militants in Yemen.“The Iran situation continues to roil markets,” said veteran strategist Louis Navellier. “This is holding back the stock gains that should be expected given the strong earnings trends.”Meanwhile, the Trump administration is set to impose a fresh 50% tariff on some Canadian goods, citing what it said was unfair treatment by Ottawa of American alcohol, automobile and dairy products.This week brings the first results from the US megacaps, and pressure is building for the companies to justify AI investments. Tesla Inc. and Alphabet Inc. kick off big tech’s reporting season Wednesday. Then, Microsoft Corp., Meta Platforms Inc., Apple Inc. and Amazon.com Inc. hit the following week.“For stocks to rebound, we need some solid earnings from the key tech names this week, and de-escalation in Iran wouldn’t hurt,” said Tom Essaye at The Sevens Report. “Markets will want to see strong results and more signs of robust demand, but also evidence of restraint and a focus on stability.”Hedge funds pulled back from US tech stocks at a record pace over the past two months, according to Goldman Sachs Group Inc.’s Prime Services desk led by Vincent Lin.“The persistence and magnitude of selling since early June point to significant length reduction by tech investors, and some signs of capitulation are starting to emerge,” the desk wrote.Elsewhere, the Trump administration is set to impose a fresh 50% tariff on some Canadian goods under a never-before-used legal provision, citing what it said was unfair treatment by Ottawa of American alcohol, automobile and dairy products.Meanwhile, Treasuries tracked losses in UK gilts after new Prime Minister Andy Burnham unnerved investors over his approach to the country’s finances. The selloff on Monday pushed yields on long-dated gilts to their highest since late May after Burnham said he will seek “any flexibility” while following the government’s borrowing and spending rules.Some of the main moves in markets:StocksHang Seng futures fell 0.2% as of 7:03 a.m. Tokyo time S&P/ASX 200 futures fell 0.4% Nikkei 225 futures rose 1.6% CurrenciesThe Bloomberg Dollar Spot Index was little changed CryptocurrenciesBitcoin fell 0.3% to $65,159.6 Ether fell 0.3% to $1,900.22 BondsThe yield on 10-year Treasuries advanced four basis points to 4.59% CommoditiesSpot gold was little changed West Texas Intermediate futures for September were little changed This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
