Market Quick Take - Oil surges as chips crack - 20 July 2026

Market drivers and catalysts

• Equities: US stocks fell with chips, Europe slipped modestly, while Asia split between a Korean rout and a China rebound.
• Volatility: Middle East escalation and the chip selloff lifted vol into a heavy earnings week
• Digital Assets: Spot held steady while miners tracked the tech retreat and stablecoin rulemaking slipped
• Commodities: Brent tops $91 on Hormuz disruption while gold holds near $4,000
• Fixed Income: Front end under pressure as oil revives inflation and rate-hike bets
• Currencies: Dollar firms on safe-haven demand; yen near a four-decade low keeps intervention risk live
• Macro: US-Iran ceasefire collapses as attacks spread; consumer sentiment improves and inflation expectations ease

Macro

• The US-Iran ceasefire has collapsed, with Iran reporting the interception of four vessels in the Strait of Hormuz and the US confirming a third service member killed in two days. Attacks have spread to infrastructure, including an Iranian strike on a Kuwait Petroleum oil facility, keeping energy supply risks elevated.
• The University of Michigan's consumer sentiment index rose to 54.4 in July, its highest since February and above expectations, helped by lower fuel prices and broad-based gains in buying conditions. One-year inflation expectations fell to 4.2%, while long-run expectations held at 3.3%.
• US industrial production rose 0.1% in June, below the 0.2% forecast, with manufacturing flat. Housing starts rose 19% to an annualised 1.427 million units, a three-month high driven by a 76% jump in multi-family starts, while single-family starts slipped for a third month.
• Andy Burnham was confirmed as UK Labour leader after an uncontested race and is expected to become prime minister next week. Markets are focused on his choice of Chancellor, with Shabana Mahmood seen as frontrunner, easing fears of a looser fiscal stance.
• More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1230 – US June Chicago Fed National Activity Index
1400 – US June Leading Index

Earnings events

• Monday: Steel Dynamics, Domino's Pizza
• Tuesday: General Motors, 3M, Charles Schwab, Alaska Air Group, Hasbro, Haliburton, ...
• Wednesday: Tesla, Alphabet, GE Vernova, Texas Instruments, ServiceNow, CME Group, ...
• Thursday: Intel, Rtx Corp, T-Mobile US, Union Pacific, Honeywell, Nasdaq Inc, Verisign, Dow, Blackstone, ...
• Friday: Exxon Mobil, American Express, NextEra Energy, Verizon, ...

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: The S&P 500 fell 1.0% on Friday, the Nasdaq 100 lost 1.5% and the Dow declined 0.8%, leaving all three lower for the week. Semiconductor shares extended their correction as investors questioned rich artificial intelligence valuations and the potential impact of Moonshot AI’s low-cost Kimi K3 model, Nvidia dropped 2.2%, while Netflix sank 7.3% after revenue and summer guidance missed expectations. Intuitive Surgical slid 14.1% on concerns that expiring health-insurance subsidies could slow procedure growth, while SpaceX fell 5.4% after aborting a Starship test launch. Alphabet, Tesla, Intel and GE Vernova results now face a market with little patience for merely good news.
• Europe: The Stoxx 600 fell 0.3% on Friday and finished the week broadly flat, while the FTSE 100 rose 0.3% as energy and utilities benefited from higher oil prices. Technology remained the main drag as enthusiasm around artificial intelligence cooled, but company results created sharp contrasts: Saab surged 9.7% after stronger-than-expected profit and orders, while Burberry fell 6.4% as the Middle East conflict hurt tourist spending. EQT gained 11.0% after Perpetual rejected its improved takeover proposal, while Volvo slipped 0.6% despite a 35% profit increase. Investors now turn to Thursday’s European Central Bank meeting, with higher energy prices making the policy discussion less comfortable.
• Asia: South Korea’s Kospi fell 4.9% on Monday as it caught up with Friday’s global chip rout after a holiday, while Hong Kong’s Hang Seng rose 2.1%, Shanghai gained 1.2% and Taiwan’s Taiex edged less than 0.1% lower. Samsung Electronics lost 4.4% and SK Hynix fell 3.3% as investors reduced exposure to crowded artificial intelligence trades, while TSMC rebounded 2.0% following Friday’s 7.3% drop linked to higher US investment plans. Japan was closed for Marine Day after the Nikkei 225 fell 4.0% on Friday and 6.4% over the week. Rising oil prices and the US-Iran conflict kept the wider regional mood cautious.
• More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 18.77 | VIX FUTURES: 19.07 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (147.28) | MARKET REGIME: NEUTRAL / CHOP | AS OF ~06:00 CET

• US and Iranian strikes lifted Brent above $91 overnight after Friday's chip selloff pushed the semiconductor index into a bear market and the S&P 500 1.01% lower to 7,457.69. VIX jumped 12% to 18.77, coinciding with Friday's monthly expiry, but VIX futures eased to 19.07 (-0.8%) this morning, suggesting the move is settling.
• The term structure held in contango, VIX3M at 20.54, with SKEW elevated at 147.28 and MOVE at 70.88. Pre-market SPXW pricing implies a weekly expected move of 119 points (1.59%) for Friday's 24 July expiry, tail puts rich; Wednesday's Tesla and Alphabet earnings are the primary catalyst.
• For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~64,784 +0.2% | ETHEREUM ~1,876 +0.3% | IBIT 36.35 -0.11% | ETHA 13.91 -1.56% | AS OF ~06:00 CET

• Digital assets entered the week steady, spot little changed even as oil-driven inflation worries pressured risk assets. Friday's US session left crypto equities mixed: miners mostly softer, led by a 6.4% decline in Mara, while Strategy and Cleanspark edged higher and the ether ETF lagged.
• On the regulatory front, US agencies missed the GENIUS Act's 18 July statutory deadline to finalise stablecoin rules, leaving issuers without a federal framework ahead of the January 2027 enforcement date.

Commodities

• Brent rose as much as 3.8% to $91.42 a barrel in early Monday trade, the highest since 11 June, after the US-Iran conflict escalated over the weekend and Iran halted vessels transiting the Strait of Hormuz. WTI trades near $84.4. Separately, a drone strike suspended loadings at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, adding further supply disruption risk.
• Gold trades around $4,023 an ounce after sliding more than 2% last week. The counterintuitive decline reflects rising bets that the Fed may need to hike rates to contain oil-driven inflation, lifting the opportunity cost of holding bullion; ETFs have been net sellers throughout July. Prices remain within a broad $3,950-4,100 consolidation range.
• Nickel hit a three-week high last week on Indonesian supply uncertainty, while LME copper withdrawal orders surged in mid-July on demand from Taiwan, South Korea and Singapore. On the supply side, Rio Tinto reported a 7% quarterly decline in copper output after a Kennecott smelter outage, and BHP's fourth-quarter production fell 5% year-on-year.
• More in our Commodity News, Analysis & Commentary

Fixed Income

• Treasury futures fell in Asian trading on Monday as oil surged, with the 10-year contract down 7/32 and cash trading shut for a holiday in Japan. Australian and New Zealand government bonds also declined on concern that higher energy prices will stoke inflation; the 10-year Treasury yield stands near 4.55%.
• Last week the curve twist-flattened, with two-year yields rising alongside oil while intermediate and long-end yields eased; speculative net shorts in 10-year futures are elevated but below the extremes of mid-June. Money markets have fully priced a 25bp BoE hike by September and see the ECB lifting its deposit rate 25bp to 2.5% in September, with Thursday's meeting expected to hold.

Currencies

• The dollar is broadly firmer on safe-haven demand after the weekend's US-Iran escalation, pressuring risk-sensitive currencies. USDJPY trades near 162.4, close to a four-decade high, with intervention risk amplified by thin holiday liquidity in Japan.
• EURUSD is steady around 1.1440 ahead of Thursday's ECB meeting, where rates are expected to be held but a September hike is increasingly priced. Sterling remains a relative outperformer near 1.3450 as attention turns to incoming prime minister Andy Burnham's choice of Chancellor.
• The Australian and New Zealand dollars are softer, while Asian currencies are mostly steady: the yuan is supported by sizeable state-fund equity buying and the won is weaker as the Kospi catches up with Friday's selloff. Flash PMIs in the US, eurozone and UK headline this week's FX calendar alongside the ECB decision.
• More on currencies in our dedicated section: Forex Trading News & Analysis