Middle East Tensions Ease, Oil Slides Monday, Amazon Surges 15%, Chinese Equities Rally

Market Overview

Global markets were driven by three major themes on Monday.

First, geopolitical tensions in the Middle East eased significantly. President Trump agreed to postpone military action against Iran, while U.S. and Iranian officials are scheduled to resume negotiations on the 3rd. As a result, crude oil prices retreated sharply during Monday's Asian session, with Brent crude falling roughly 6.7% intraday, effectively unwinding much of last week's geopolitical risk premium tied to tensions surrounding the Strait of Hormuz. Looking back to Friday, however, oil prices had still closed at elevated levels, with WTI September crude futures gaining 1.29% to settle at $84.67 per barrel.

Second, U.S. equities extended their earnings-driven rally. Amazon surged 15% following its earnings release, marking its largest single-day gain since 2012, as AWS revenue growth accelerated to its fastest pace in 18 quarters. The S&P 500 climbed 0.70% to 7,489.72, while the Nasdaq Composite advanced 1.0%. In contrast, Apple dropped 7.4% after issuing weaker-than-expected forward guidance, recording its steepest one-day decline since April 2025.

Third, Chinese equities posted broad-based gains. The Shanghai Composite Index rose 0.72%, while the ChiNext Index jumped 3.06%. U.S.-listed Chinese stocks have now gained 8.09% for the week. Meanwhile, South Korea's July exports surged 62.8% year over year, led by an impressive 178.8% increase in semiconductor exports, reinforcing expectations that the global chip cycle remains on solid footing.

In currency markets, the U.S. Treasury, together with Japanese and South Korean authorities, reportedly conducted the largest coordinated foreign exchange intervention in nearly three decades, sending the U.S. dollar below ¥158 against the Japanese yen.

Market OutlookOil Outlook Following Middle East De-escalation

With President Trump delaying military action and U.S.-Iran negotiations scheduled for the 3rd, crude oil has largely surrendered the geopolitical premium accumulated during last week's Strait of Hormuz tensions.

Should negotiations produce a credible framework for further diplomatic progress, oil prices could face additional downside pressure. However, any unexpected setback in talks could quickly reignite geopolitical concerns, leaving crude prices vulnerable to renewed event-driven volatility. Elevated short-term price swings are therefore likely to persist.

Global Manufacturing PMIs and AI Chip Demand

Manufacturing PMI data from several major economies will be released today, providing investors with an important snapshot of global industrial activity.

Combined with South Korea's remarkable 178.8% surge in semiconductor exports, the data will help gauge whether real-economy demand is keeping pace with the ongoing AI infrastructure investment cycle. Trends in manufacturing activity and continued strength across the semiconductor supply chain could offer early signals regarding global growth momentum and the sustainability of the technology rally in the second half of the year.

Key Events to Watch

• Manufacturing PMI reports from China, Japan, South Korea, the United States, the Eurozone, and the United Kingdom

• U.S.-Iran negotiations scheduled for the 3rd, with markets closely watching for progress toward a diplomatic framework and its implications for crude oil prices

• Palantir Technologies earnings release, with investors focusing on profit trends and management's demand outlook

• Continued market reaction to the largest coordinated FX intervention in nearly 30 years by the U.S., Japan, and South Korea, particularly the direction of the U.S. dollar and Japanese yen

• Investor attention continues to build ahead of the Federal Reserve's Jackson Hole Economic Symposium in August for fresh signals regarding the Fed's potential September policy path