This content was published on
July 21, 2026 - 01:25
4 minutes
(Bloomberg) — Oil held near its highest close since mid-June, weighing on stocks and Treasuries, as an escalation in Middle East hostilities rekindled worries about inflation.West Texas Intermediate crude held around $82.60 a barrel 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. Gold was a touch weaker, trading around $4,000 an ounce.Earlier, the S&P 500 fell 0.2%, with most shares in the benchmark retreating, although a gauge of chipmakers bounced after shrinking into a bear market. Futures contracts indicated gains for South Korea and Japan, which will return after a holiday Monday.Elsewhere, the Canadian dollar held steady after the Trump administration vowed to impose a fresh 50% tariff on some of the country’s goods.Higher oil prices and renewed tensions in the Middle East are weighing on markets already rattled by a technology-led selloff. Investors are now turning to megacap earnings later this week for clues on whether this year’s AI-driven rally can be sustained.“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.”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.In geopolitical news, UK gilts declined 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.Tariff concerns resurfaced after the Trump administration vowed to impose a fresh 50% levy on some Canadian goods, citing what it called unfair treatment of American alcohol, cars and dairy products, further inflaming trade tensions between the two neighbors.If Trump follows through with the levies, which are set to take effect in 30 days, the move would mark one of the most severe trade actions he’s taken against the US’s second-largest trading partner.Attention, however, remains firmly on the Middle East as US forces struck Iranian targets after President Donald Trump vowed Tehran “will pay” for killing three US soldiers.On Monday, the Iran-backed Houthis said they would impose a ban on maritime traffic from Saudi Arabia, threatening the Red Sea route that has allowed the kingdom to export millions of barrels of crude a day via its cross-country pipeline bypassing the Strait of Hormuz.Saudi Arabia said it would take all necessary measures to protect its ships following the threats by the Tehran-backed Houthi militants in Yemen.“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.Corporate News:A federal judge temporarily paused Paramount Skydance Corp.’s $110 billion takeover of Warner Bros. Discovery Inc. saying it “likely” violates antitrust law. Alibaba Group Holding Ltd.’s e-commerce service was fined €550 million ($629 million) by the European Union for selling illegal products in the largest penalty under the bloc’s content moderation rulebook. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 8:23 a.m. Tokyo time Hang Seng futures fell 0.2% S&P/ASX 200 futures fell 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1413 The Japanese yen was little changed at 162.51 per dollar The offshore yuan was unchanged at 6.7692 per dollar The Australian dollar was little changed at $0.6999 CryptocurrenciesBitcoin fell 0.2% to $65,213.43 Ether fell 0.1% to $1,902.33 BondsAustralia’s 10-year yield advanced one basis point to 4.97% CommoditiesWest Texas Intermediate crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
