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August 3, 2026 - 14:33
5 minutes
(Bloomberg) — Stocks and bonds rose as the latest sign of easing tensions between the US and Iran pushed oil prices lower, allaying concerns about faster inflation.S&P 500 futures added 0.5%, signaling a positive start to a week awash with key economic data and corporate earnings. Brent crude slid as much as 7.3% to $81.55 a barrel after President Donald Trump called off a planned attack on Iran. Treasuries rose across the curve, with the benchmark 10-year yield dropping six basis points to 4.68% as it retreated from the highest level since January.The yen rallied sharply before paring most of the gain amid speculation that authorities may have intervened to prop up the currency again after coordinated action between the US and Japan last week. Bloomberg’s gauge of the dollar fell 0.1%.Middle East hostilities, AI stock valuations and inflation fears continue to dominate markets, but traders are also looking ahead to the key US July jobs report on Friday for guidance on the Federal Reserve’s policy path. SpaceX’s first earnings release since its record-breaking IPO is on Tuesday, while European heavyweights including HSBC Holdings Plc and Novo Nordisk A/S are also reporting.“Geopolitical news is helping out with oil prices going down and easing pressure on yields,” said Alexandre Baradez, chief market analyst at IG in Paris. “There is, however, a real lingering issue on bond yields, on leverage, on Fed policy: until there’s clarity on these fronts, it’s hard to say that the stock market is all clear.”Iran suggested on Monday that negotiations to get ships moving through the Strait of Hormuz are making progress, after President Trump said talks would resume following his decision to halt strikes. A supply squeeze triggered by the war had driven up fuel costs, stoking fears of another inflation spike and unsettling investors.“If we get something concrete on a peace deal, or more importantly the reopening of the strait of Hormuz, then we could see some strong relief rallies across the market,” said Nick Twidale, chief market analyst at AT Global Markets. “For now it feels we will continue to see volatility across different markets, especially as AI trade remains the dominant theme for equities.”What Bloomberg Strategists say:Oil markets can’t yet put the Iran-US conflict in the rear-view mirror, with risks still skewed to the upside. Options markets continue to point to greater concern over higher prices than lower ones. That suggests the market continues to view a supply-driven price spike as a more likely risk than a sharp decline in Brent.Among individual movers in US pre-market trading, Bristol-Myers Squibb Co. climbed more than 8% after a report that UK drugmaker AstraZeneca Plc has explored an acquisition of the Princeton, New jersey-based firm. AstraZeneca fell more than 7% in London. Marriott International Inc. slid 3.7% after a downbeat profit forecast.The Stoxx Europe 600 index added 0.4%, led by consumer products companies and carmakers. Asian stocks, however, fell as South Korean chipmakers tumbled, suggesting the wild ride for artificial intelligence-rated shares is not yet over.Meanwhile, the yen swung from a small decline to gain as much as 1.4% versus the dollar during morning trading in Tokyo. It then pared a large chunk of the move to trade around 156.90 per dollar during the London session, suggesting jittery traders or algorithms may have contributed to volatility. Japan’s Ministry of Finance said it conducted a yen-buying operation on July 31, US time, in coordination with the US Department of Treasury and wouldn’t hesitate conducting further joint intervention.Treasury Secretary Scott Bessent said the US stepped in to help fight “disorderly” movements in the yen and is ready to keep helping Japan. Bessent also pointed to a Federal Reserve facility Japan could use.“For a week probably, we can see more choppiness and probably more temporary yen strengthening,” said Julia Wang, North Asia chief investment officer at Nomura International. “But we do think this does not change the actual direction for dollar-yen and probably will continue higher once the intervention is behind us.”Some of the main moves in markets:StocksS&P 500 futures rose 0.5% as of 8:32 a.m. New York time Nasdaq 100 futures rose 0.2% Futures on the Dow Jones Industrial Average rose 1.1% The Stoxx Europe 600 rose 0.3% The MSCI World Index rose 0.1% CurrenciesThe Bloomberg Dollar Spot Index fell 0.2% The euro was little changed at $1.1529 The British pound fell 0.1% to $1.3465 The Japanese yen rose 0.4% to 156.73 per dollar CryptocurrenciesBitcoin fell 1.3% to $62,575.91 Ether fell 2.2% to $1,840.63 BondsThe yield on 10-year Treasuries declined six basis points to 4.67% Germany’s 10-year yield declined seven basis points to 3.14% Britain’s 10-year yield declined 10 basis points to 4.95% CommoditiesWest Texas Intermediate crude fell 6.8% to $78.95 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.–With assistance from Anand Krishnamoorthy.©2026 Bloomberg L.P.
