Morning Brew July 24 2026

Good morning.

Tariffs, the Strait of Hormuz, Red Sea tensions and the cost of financing the AI buildout at rising yields  are all weighing on sentiment this morning. Oil remains firmly above USD 100 in the London line, keeping inflation concerns alive.

Wall Street had its worst session in a month. The S&P 500 fell 1.2% to 7,408.30, the Nasdaq 100 dropped 1.9%, and the Dow lost 1.0% to 51,711.65, as Brent crude above USD 100 revived inflation fears and disappointing results from the mega-cap technology complex hit sentiment. Tesla fell 14.5%, its largest decline since March 2025, after profits dropped despite solid automotive revenue. Alphabet lost 6.5% after guiding for capital expenditure of up to USD 205 billion in 2026. The Magnificent Seven basket had its weakest day since the tariff shock in April 2025.

Europe was also under pressure. The Stoxx Europe 600 fell 1.2%, while the DAX declined 1.6% to 24,763. Nestlé suffered a record one-day drop of 8.0% after weaker North American volumes and a sharp fall in net profit disappointed investors.

Intel provided some relief after the close. The company forecast third-quarter revenue and profit above expectations, helped by stronger demand for central processing units as the AI data-centre buildout continues. Shares rose 5.2% in after-hours trading, and management signalled higher spending plans over the next two years.

Intel expects third-quarter revenue of USD 15.8–16.8 billion, ahead of the USD 15.1 billion expected by analysts. Adjusted earnings are expected at 38 cents per share, compared with consensus expectations of 27 cents.

SAP posted a sharp rise in second-quarter profit, but lowered its 2026 outlook for adjusted operating earnings after two acquisitions.

The German software group now expects adjusted EBIT to grow by 13–17% at constant currencies, down from the previous 14–18% range. Shares rose slightly after hours, suggesting investors were prepared to look through the guidance reduction for now.

Bond markets remain a key pressure point. The U.S. 10-year yield held around 4.70% after touching its highest level in more than 18 months overnight, while the 30-year yield stayed near 5.17%, just below a 19-year peak. These levels matter because long-end yields above 5% tend to tighten financial conditions globally and make high-duration growth stories more vulnerable.

Higher Treasury yields helped the U.S. dollar strengthen broadly. The USD Index is holding around 101.46 after rising to its highest level this month. EUR/USD slipped to 1.1377, with hawkish ECB expectations already priced in and higher energy costs limiting upside. GBP/USD fell to 1.3315 and is down more than 1% over five days. USD/JPY climbed to 163.86, leaving the yen at multi-decade lows and keeping intervention risk very much alive. Verbal warnings from Japan are unlikely to be enough at these levels; the market may now need actual action to take the threat seriously. Gold and silver are lower at 4,025 and 57.50, while Bitcoin is around 65,000.

Tariffs are back in focus. The Trump administration imposed new duties of 10% and 12.5% on goods from 60 trading partners, including the European Union and China, citing weak enforcement of forced-labour bans. The move came just as the temporary 10% global tariff expired.

This is the latest attempt by the White House to revive Donald Trump’s campaign vision of a near-global tariff regime after the U.S. Supreme Court struck down last year’s reciprocal duties imposed under emergency powers.

The U.S. trade deficit widened to USD 77.6 billion in May from USD 54.6 billion in April, the largest gap since March 2025. Imports rose while exports declined, pointing to a larger drag from net exports on second-quarter GDP amid ongoing trade-policy uncertainty.

Geopolitics remain the other major driver. Donald Trump promised “major military punishment” for Iran and its Houthi allies after attacks on two Saudi oil tankers in the Red Sea extended the Middle East conflict to another major shipping chokepoint.

Oil reacted sharply. Fears that the disruption could spread to another key sea route sent global prices higher, with Brent rising more than 6% and trading above USD 100 per barrel for the first time since May.

Today, international PMI data will be in focus, but market sentiment is likely to be driven mainly by three themes: the fallout from the new U.S. tariffs, further developments in the Middle East and Red Sea, and the risk of a Bank of Japan intervention at any point. With option expiry tonight, markets are likely to remain nervous and headline-sensitive.

Friday, July 24, 2026

Macro: UK retail sales; flash PMIs from Germany, the euro area, the UK and the U.S.
Central banks / speakers: ECB Survey of Professional Forecasters and Consumer Expectations Survey; Bank of England Agents’ Summary of Business Conditions.
Corporate earnings: American Express, Verizon, NextEra Energy, HCA Healthcare, Canadian National Railway.

Monday, July 27, 2026
Macro: Japan PPI DE IFO Index Euro-area M3 money supply, loans to households and loans to companies.US Durable Goods orders
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: AstraZeneca, Cadence Design Systems, Nucor, Welltower, Celestica, F5 Networks, Universal Health Services.

Tuesday, July 28, 2026
Macro: U.S. Conference Board Consumer Confidence; Australian CPI figures.
Central banks / speakers: Reserve Bank of Australia Governor Michele Bullock speaks; FOMC meeting begins.
Corporate earnings: Boeing, Coca-Cola, UPS, PayPal, Visa, Mondelez, Texas Instruments, Danaher,