Market Navigator: Oil surges on Iran, US CPI eyed – week of 13 Jul 2026

Last week's recap: Oil jumps on escalation, China's PPI hits four-year high and yen rebounds on pension shift

• Middle East ceasefire collapses: The US resumed strikes on Iran after tankers were attacked in the Strait of Hormuz, prompting President Trump to declare the ceasefire 'over'. Strait traffic has slowed to a near-standstill, while Brent crude rebounded to touch $80 a barrel, up from lows near $70 a week earlier.
• Fed minutes reveal deep rate-path split: Minutes from the Federal Reserve's (Fed) 16-17 June meeting showed the committee divided over year-end policy. Officials also flagged strong artificial intelligence (AI) infrastructure demand as a price-pressure driver. The ISM services purchasing managers' index (PMI) eased to 54 in June, with the prices sub-index falling below 70 for the first time since February.
• China's inflation divergence widens: The consumer price index (CPI) rose 1% year-on-year (YoY) in June, missing consensus and slowing from May's 1.2%, as falling fuel prices eased transport costs. Producer prices (PPI) rose 4.1% YoY, the strongest since July 2022, with raw material and mining costs surging even as consumer goods prices fell. The soft CPI alongside declining consumer goods prices points to subdued household consumption.
• Japan pension shift lifts yen: Japan's government wants the Government Pension Investment Fund (GPIF), holding 293 trillion yen in assets, to raise domestic allocation. The move lifted the yen off 40-year lows and triggered the sharpest Japanese government bond (JGB) yield fall in a month, as GPIF currently has a strategic allocation of 50% in foreign investments.

Markets in focus: Nasdaq 100 gains on Meta and Nvidia strength, Hang Seng outperforms on China tech rotation, Brent crude rebounds past $80

Meta and Nvidia lead Nasdaq 100 gains as Dow lags on Iran escalation

US equities delivered a mixed performance last week, as escalating US-Iran hostilities tempered the rotation from technology into cyclical sectors ahead of a heavy earnings calendar. The S&P 500 advanced 1.2% and the Nasdaq 100 gained 1.7%, while the Dow Jones slipped 0.5%.

Meta surged 14.8% on plans for 'Meta Compute', a cloud unit to monetise excess AI computing capacity, easing investor concerns over Meta's expanding capital expenditure by presenting a path to a new revenue stream. Nvidia climbed 8.3% after China signalled it may permit limited H200 chip orders from Alibaba and other domestic technology companies, with buy-on-dip interest reinforced as its forward price-to-earnings (P/E) ratio fell to around 18 times mid-week — its lowest level since 2019.  SK Hynix surged 17% on its Nasdaq debut, marking the largest US share sale on record by a foreign company.

Conversely, Intel dropped 8.7% on reports that its 18A manufacturing process may not achieve commercially profitable yields until late 2026 or 2027, while SpaceX fell 10.3% despite an average Wall Street price target of $250 and its inclusion in the Nasdaq 100.

Despite last week's advance, the US Tech 100 index's short-term momentum has softened over the past fortnight, with the index now consolidating within a converging wedge formed after its sharp April-to-June rally. A decisive break above resistance at 30,200–30,300, or below the rising trendline near 28,000–29,000, is needed to confirm the direction of the next leg. The longer-term bullish trend above the 200-day moving average (MA), however, remains intact.

Figure 1: US Tech 100 index daily price chart

Alibaba drives Hang Seng Index outperformance over regional peers

The Hang Seng Index (HSI) outperformed the broader MSCI Asia-Pacific (APAC) index for another week, rising 3.5% on strength in technology names as investors rotated out of chipmakers in Korea, Taiwan and Japan into cheaper Chinese AI plays that had lagged this year's rally. Alibaba led gains, surging 17.1% after a pre-earnings briefing pointed to narrowing losses in its instant-commerce business, while Meituan, Tencent and JD.com each advanced over 5%.

Sentiment was further supported by reports that DeepSeek is developing its own AI chip to reduce reliance on Nvidia and Huawei, and that Zhipu is in early talks with domestic chip designers for its General Language Models (GLM).

Elsewhere, the picture was more mixed. CATL fell 13.1% as lithium carbonate prices extended their slide to a 10-week low on the potential restart of its Jianxiawo mine. Zhipu, fresh off its lock-up expiry, plunged 8.5% after pricing a share placement at a 13% discount, though it remains up over 1,300% since its January listing. MiniMax dived 22.5% after the company raised $1.9 billion in capital, including shares priced at a 10% discount, to fund its next-generation model following the expiry of lock-up restrictions on a tranche of pre-initial public offering (IPO) shares.

Technical momentum in the HSI has improved since the index found support at 22,518 and achieved a decisive break above its 20-day MA. The index now stands a reasonable chance of challenging the mid-June pivot point at 25,048. The medium-term trend, however, remains bearish unless the HSI reclaims its 200-day MA near 25,850.

Figure 2: Hang Seng Index daily price chart

Crude oil rebounds on renewed US-Iran hostilities, though IEA flags surplus risk

Brent crude futures rose 5.4% last week, briefly topping $80 a barrel, while WTI gained 4.0% to trade near $71. A series of US-Iran strikes over the past few days led President Trump to declare the ceasefire over, though he left scope for continued negotiations. Iran said it had closed the Strait of Hormuz after firing a warning shot at a vessel travelling on an unapproved route, cautioning that any retaliation would be met with a severe response.

The International Energy Agency's (IEA) July report showed global oil supply rebounding sharply in June (+4.1 million barrels a day) as tankers stranded in the strait rushed to exit, though output remains 9.4 million barrels a day below pre-war level. Demand is recovering from May's low, and the IEA expects the market to swing into surplus later this year — a forecast now at risk given the latest escalation.

Oil's return towards pre-war levels in June reflected markets pricing in a best-case outcome for the fragile US-Iran arrangement; last week's re-escalation exposes how fragile that assumption was. Near-term, the risk premium should keep prices supported, though a repeat of the earlier spike appears unlikely, as demand remains slow to recover while stranded-tanker releases and OPEC+ output quota expansion continue to add barrels to an already oversupplied outlook.

From a technical perspective, Brent crude's undated contract on IG has briefly broken above the descending trendline near $78 established since May. A sustained break above this level would bring the 200-day MA resistance near $81 into view, potentially reversing the recent bearish trend. The July low of $70.21 stands as key support on any pullback.

Figure 3: Brent crude daily price chart

The week ahead: US CPI, China GDP and mega-bank earnings

The week ahead is data-heavy, with US and Chinese macro releases coinciding with the start of Q2 earnings season.

US inflation takes centre stage, with June's CPI and PPI due Tuesday and Wednesday respectively, alongside Fed Chair Warsh's congressional testimony. Headline CPI should moderate month-on-month (MoM) as energy prices retreated in June, though the YoY rate is likely to remain elevated well above Fed's target. The key question is whether core CPI, which reached 2.9% YoY in May, can reverse course, given that shelter and medical care prices may prove sticky. A hotter core print would sit awkwardly against Warsh's recent Sintra remarks, in which he suggested inflation risks have eased, and could revive doubts over the disinflation narrative; a softer print would validate that view and reinforce the case for a policy pause. Bond futures traders are currently pricing a 79% probability of a rate hike in October.

China's calendar opens with Tuesday's trade data, where exports and imports are expected to remain firm following May's surprise gains of 19.4% and 27.4% YoY respectively, as stockpiling amid Middle East tensions and AI hardware demand continues to support shipments. Wednesday's data releases will test the 4.5–5% 2026 growth target, with second-quarter (Q2) gross domestic product (GDP) growth expected to slow to 4.4% YoY. Fixed asset investment should contract further on continued property-sector weakness, while retail sales are expected to shrink at a slower pace.

Q2 earnings season formally begins, led by major US banks including JPMorgan, Goldman Sachs and Bank of America. Financial-sector earnings are expected to grow 9.9% YoY according to LSEG estimates, setting the tone for the S&P 500's second-largest earnings contributor after technology. Upstream semiconductor names ASML and Taiwan Semiconductor Manufacturing Company (TSMC) also report, results that should indicate whether AI demand remains on track.

Figure 4: China economic indicators

Key macro events this week: US CPI, China GDP and UK growth data

(All times in GMT+8)

Tuesday 14 July 2026

• 8.30am — Australia Westpac consumer confidence change (July): previous -2.9%
• 9.30am — Australia NAB business confidence (June): previous -14
• 11.00am — China trade balance (June): previous $105.43 billion, consensus $121 billion
• 11.00am — China exports YoY (June): previous 19.4%, consensus 18.2%
• 11.00am — China imports YoY (June): previous 27.4%, consensus 24%
• 8.30pm — US core inflation rate MoM (June): previous 0.2%, consensus 0.2%
• 8.30pm — US core inflation rate YoY (June): previous 2.9%, consensus 2.9%
• 8.30pm — US inflation rate MoM (June): previous 0.5%, consensus -0.1%
• 8.30pm — US inflation rate YoY (June): previous 4.2%, consensus 3.8%
• 10.00pm — US Fed Chair Warsh congressional testimony

Wednesday 15 July 2026

• 10.00am — China GDP growth rate YoY (Q2): previous 5%, consensus 4.4%
• 10.00am — China industrial production YoY (June): previous 4.5%, consensus 4.7%
• 10.00am — China retail sales YoY (June): previous -0.6%, consensus -0.1%
• 10.00am — China fixed asset investment YoY (YTD June): previous -4.1%, consensus -4.9%
• 8.30pm — US PPI MoM (June): previous 1.1%, consensus 0.2%

Thursday 16 July 2026

• 2.00pm — UK GDP MoM (May): previous -0.1%, consensus 0.1%
• 8.30pm — US retail sales MoM (June): previous 0.9%, consensus 0.3%

Friday 17 July 2026

• 8.30pm — US building permits preliminary (June): previous 1.41 million, consensus 1.42 million
• 8.30pm — US housing starts (June): previous 1.177 million, consensus 1.33 million
• 10.00pm — US Michigan consumer sentiment preliminary (July): previous 49.5, consensus 51

Key corporate earnings: Big banks kick start earnings season

(In local exchange time)

Tuesday 14 July 2026

• JPMorgan
• Bank of America
• Goldman Sachs
• Wells Fargo
• Citigroup

Wednesday 15 July 2026

• ASML
• Johnson & Johnson
• Morgan Stanley
• BlackRock
• The Bank of New York Mellon

Thursday 16 July 2026

• Taiwan Semiconductor Manufacturing
• UnitedHealth
• GE Aerospace
• Netflix
• Abbott Laboratories

_{Source: Trading Economics, Nasdaq, LSEG (as of 12 July 2026)}