Résumé: Iran and AI
Good morning.
I spent the last two weeks in Sri Lanka with my family. It is a beautiful country and an easy recommendation if you like travelling a little off the beaten path.
Equity Indices Since July 1, U.S. equities have moved from early-month strength into a sharper mid-month reset led by AI and semiconductor names. The Nasdaq 100 closed around 28,600 on July 20, down roughly 4% since the start of July and well below its late-June high. The broader Nasdaq Composite closed at 25,508 on July 20 after falling 1.4% on July 17, while the Dow Jones ended July 17 at 52,146, down 0.8% on the day but still up roughly 8% year-to-date. In Europe, the DAX reached a fresh high above 25,900 in early July before easing back toward 24,850. The index is still broadly supported, but the momentum has cooled. The SMI has been steadier, helped by its defensive mix, and has held up better than the more technology-sensitive markets. FX Markets The dollar has stayed broadly firm but range-bound. EUR/USD is trading near 1.14, GBP/USD around 1.34, while the yen remains weak against the dollar and close to levels where intervention risk cannot be ignored. The Swiss franc is broadly stable against the dollar but firmer against the euro and sterling, consistent with its safe-haven role as risk sentiment became more fragile.Gold remains well bid but has not confirmed the more aggressive breakout narrative, trading closer to USD 4,000 than USD 4,200. Silver has been more volatile and is trading around USD 57 after another sharp swing. Oil remains headline-driven: Brent is back above USD 80 as the latest Middle East-related risk premium returns, but the move is still more about geopolitics than a clean demand story. While mediation attempts are bringing oil lower overnight, reports that Yemen’s Houthis are threatening oil transportation in the Red Sea mean the price remains vulnerable to renewed volatility.
Company MoversNvidia and the wider AI hardware complex were the main source of pressure during the mid-July selloff, as investors questioned how much upside is left after the enormous AI infrastructure rally. Apple has been the notable counterweight, benefiting from a rotation toward durable cash flow and less capital-intensive AI exposure. The message is not that the AI story is over; it is that expectations are now much harder to beat. IBM suffered its worst trading day ever, losing more than 25% after a profit warning.
Looking Ahead:
Yesterday, we saw some pressure on risk sentiment in low volumes. The Dow lost 0.6%, the S&P 500 slipped 0.2%, and Apple fell 2%, while Alphabet and Microsoft each gained around 2%.
The USD Index fell below 101, while precious metals rose overnight, with gold trading around 4,050 and silver near 57.90. From here, Iran is likely to remain the main market driver. AI investment, AI-related earnings, broader earnings momentum, and any fresh hints on inflation will also be closely watched. This week, the key earnings focus is likely to be on Alphabet, Tesla, and IBM. Off-balance-sheet debt linked to AI infrastructure is also becoming a closely watched topic. Donald Trump also re-ignited the tariff topic by slamming 50% of tariffs on Canadian goodsAndy Burham is the new UK prime minister in the UK and has started to rebuild his team.
Tuesday, July 21, 2026 Macro:UK labour-market data; Germany ZEW; euro-area Bank Lending Survey; Swiss trade balance.
Central banks / speakers: Bank of England’s Nathanaël Benjamin speaks at OMFIF.
Corporate earnings: Novartis, Charles Schwab, Danaher, General Motors, D.R. Horton, Halliburton, Chubb.
UK CPI; U.S. S&P Global manufacturing and services PMI.
Central banks / speakers: ECB Governing Council monetary-policy meeting begins in Frankfurt.
Corporate earnings: Tesla, Alphabet, IBM, Texas Instruments, ServiceNow, Philip Morris, AT&T, GE Vernova
Macro:Australia labour-market data; euro-area government deficit/debt data; U.S. initial jobless claims.
Central banks / speakers: ECB rate decision at 14:15 CET, followed by President Christine Lagarde’s press conference at 14:45 CET
Corporate earnings: Intel, SAP, RTX, T-Mobile US, Thermo Fisher, TotalEnergies, Blackstone, Union Pacific.
Outrageous Predictions
Head of Investment Content Switzerland
Outrageous Predictions
Senior Relationship Manager
Outrageous Predictions
Saxo Group
Outrageous Predictions
Chief Investment Strategist
Outrageous Predictions
Global Head of Macro Strategy
Outrageous Predictions
Chief Investment Strategist
Outrageous Predictions
Global Head of Investment Strategy
Outrageous Predictions
Global Head of Investment Strategy
Outrageous Predictions
Investor Content Strategist
Outrageous Predictions
Global Head of Macro Strategy