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July 27, 2026 - 01:27
5 minutes
(Bloomberg) — Oil dropped and US equity-index futures rallied as the US and Iran refrained from retaliatory strikes, easing concerns over potential disruptions to Middle East energy supplies after a recent escalation in the conflict.Brent crude fell as much as 7.4% to below $90 a barrel, before paring losses as the US paused an almost two-week run of strikes against Iran.Contracts for the Nasdaq 100 Index climbed 1.2% and the dollar, the haven of choice during the Middle East conflict, weakened against its Group-of-10 peers as sentiment improved at the start of the week. Gold climbed 0.8% to about $4,085 an ounce and cryptocurrencies rose.After striking Iran for 13 days, the US has apparently held off since late Friday without explanation, raising questions about President Donald Trump’s next move. Iran’s army said Sunday that Tehran had also suspended its military response. The pause came as Iranian and Omani officials held talks over shipping through the Strait of Hormuz, raising hopes that the key oil transit route may avoid further disruption.“A resolution to the conflict would be a positive development,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab. The pause in attacks raises “hopes that the two sides will enter negotiations.”The lull in hostilities sets the tone for a pivotal week in global markets, with traders focused on whether the Federal Reserve will raise interest rates on Wednesday after the recent surge in oil prices fueled inflation concerns. Investors are also awaiting earnings from megacap technology companies after a recent backlash against heavy spending on artificial intelligence.Tensions in the Middle East had sent oil prices soaring in July, overshadowing a tamer-than-expected reading on June consumer prices that seemed to offer officials breathing room to keep rates stable. Add to that a demand boom fueled by AI and the Trump administration’s announcements of new tariffs, and Fed watchers see the possibility of dissents at the July 28-29 meeting if officials again leave policy unchanged.Three days of Group-of-Seven central bank decisions begin with the Fed on Wednesday, followed by the Bank of England and the Bank of Japan. While no changes are expected in interest rate policy, officials are likely to emphasize vigilance over the inflationary impact of higher energy prices.“We think the Fed will probably not hike,” Krishna Guha, head of central bank strategy at Evercore ISI, wrote in a note. “But we cannot take the probability too low given Warsh’s refusal to set out his strategy,” he said referring to the new Fed chair Kevin Warsh.Another key focus for markets will be earnings from megacap technology companies after a recent round of selloff in AI stocks rekindled doubts over whether billions of dollars being poured into infrastructure will generate commensurate returns. The selloff showed how much the narrative around AI and the Magnificent Seven tech behemoths has shifted.This change makes for a tough setup heading into this week, with earnings from Microsoft Corp. and Meta Platforms due on Wednesday, followed by Apple Inc. and Amazon.com Inc. on Thursday.Corporate Highlights:Samsung Electronics Co. won a contract worth more than $200 billion to supply chips to Broadcom Inc., highlighting robust demand for AI infrastructure. DeepSeek has told prospective investors in its second fundraising round that it’s suspending the deal for now, people familiar with the matter said, Nvidia Corp. will invest $1 billion in Naver Corp. to help finance an AI data center in South Korea, extending a wave of investment by the world’s most valuable company that continues to bolster sentiment toward the region’s technology sector. Qualcomm Inc., the biggest maker of smartphone processors, plans to increase prices by a percentage in the double digits, a move that’s likely to ripple through much of the tech industry. Some of the main moves in markets:StocksS&P 500 futures rose 0.7% as of 8:21 a.m. Tokyo time Hang Seng futures rose 0.2% S&P/ASX 200 futures rose 0.6% CurrenciesThe Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1390 The Japanese yen was little changed at 163.68 per dollar The offshore yuan was little changed at 6.7677 per dollar The Australian dollar rose 0.2% to $0.6992 CryptocurrenciesBitcoin rose 1.1% to $65,301.03 Ether rose 2.2% to $1,954.47 BondsAustralia’s 10-year yield declined six basis points to 5.03% CommoditiesWest Texas Intermediate crude fell 4.9% to $84.93 a barrel Spot gold rose 0.8% to $4,085.05 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Momoka Yokoyama and Kanoko Matsuyama.©2026 Bloomberg L.P.
