Market Quick Take - Inflation fears return - 14 July 2026

Market drivers and catalysts

1. Equities: US stocks fell, Europe held flat, while Asia recovered from early losses as oil and chip volatility dominated
2. Volatility: Oil-driven Fed-hike bets and an Asian chip selloff pressured futures ahead of Tuesday's CPI
3. Digital Assets: Crypto-linked equities softened with broader tech, while Circle's new bank charter advanced stablecoin oversight
4. Commodities: Wrong-footed shorts and Gulf supply fears drive oil higher; gold shows resilience despite rate concerns
5. Fixed Income: Treasuries steady after oil-related fall
6. Currencies: Dollar struggle to find bid despite geopolitical uncertainty
7. Macro: US June CPI & Fed's Warsh testifies before Congress

Macro

1. Brent toped USD 85 per barrel after Trump reinstated the US blockade of Iranian ships in the Strait of Hormuz and demanded a 20% reimbursement on all cargo passing through. Iran sees any challenge to its authority in the strait as a breach of the interim peace agreement, and the renewed blockade may prompt further attacks on commercial vessels. US Central Command is reportedly planning multiple days of strikes on Iran, hurting hopes for a quick shipping recovery and reviving global inflation fears.
2. The crude rally reignited inflation concerns, but treasuries and the dollar steadied as traders awaited Tuesday’s US consumer price index data. Money markets are now pricing in 50% odds of a Fed rate hike in July as Governor Christopher Waller said officials may need to raise rates to tame price pressures.
3. UK like-for-like retail sales rose 1.7% y/y in June 2026, below the 2.9% forecast and down from 3.4% in May, the weakest since February. World Cup matches and a heatwave lifted clothing, cooling products, food, drink, and pubs, while non-food sales grew 1.2% on strong online demand. Overall spending rose 1.9%, with essentials up 2.2% and travel steady, but the BRC warned that politics and the Iran conflict may weigh on future sales.
4. China’s exports and imports grew faster than expected in June, as surging semiconductor prices and strong global demand for hardware used to power AI data centres boosted trade across Asia. Exports rose 27% from a year earlier, while imports surged 36%, leaving a trade surplus of USD 125.6 billion. Of particular note was a further sharp decline in crude oil imports to near a decade low, constrained by the war in the Persian Gulf and an abrupt slowdown in domestic demand.
5. More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1. 1230 – US June CPI
2. 1400 – Fed's Warsh testifies at House Financial Services Committee

Fed speakers: Barr (1640). Goolsbee (1700), Cook (1730), and Bowman (1855)

Earnings events

1. Monday (yesterday): Progressive, Fastenal
2. Tuesday (today): JPMorgan, Bank of America, Goldman Sachs, Well Fargo & Co, Citigroup
3. Wednesday: ASML, J&J, Morgan Stanley, BlackRock, Bank of New York, Cintas, United Airlines
4. Thursday: UnitedHealth, GE Aerospace, Netflix, Seagate, Abbott Labs, Intuitive Surgical, U.S. Bancorp, State Street
5. Friday: Travelers

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

Equities

1. USA: The S&P 500 fell 0.8%, the Nasdaq 100 dropped 1.9%, and the Dow lost 0.3% as surging oil prices revived inflation fears and a 4.8% semiconductor rout hit growth stocks. Nvidia slid 3.5% as investors cut chip exposure after South Korea’s technology selloff, while AppLovin sank 12.7% on concerns about slowing ecommerce advertising growth, Exxon Mobil rose 4.1% as crude prices jumped on renewed US-Iran hostilities. The VIX rose 14.2%, and attention turned to US inflation data and major-bank earnings for clues on whether higher energy costs were starting to affect rates and profits.
2. Europe: The Stoxx 600 finished flat, while the DAX rose 0.2%, the CAC 40 gained 0.3%, and the FTSE 100 was unchanged as energy strength offset losses in technology, travel and defence. Plus500 plunged 15% after unchanged guidance disappointed investors, while Kongsberg Gruppen fell 6.8% after quarterly orders and cash flow missed expectations, Vodafone jumped 5.5% as Xavier Niel moved to acquire a near $6 billion stake. Akzo Nobel rejected Nippon Paint’s €7.5 billion offer for its decorative-paints unit. Markets looked to ASML’s results and oil prices for the next signal on margins and interest rates.
3. Asia: By mid-afternoon, the Kospi had reversed an early 5.3% slide to trade 1.0% higher, while the Nikkei gained 0.5%, the Hang Seng rose 0.4%, and the ASX 200 was flat. Samsung Electronics rebounded 4.1% and SK Hynix 3.5% after Monday’s historic selloff, but TSMC fell 0.8% despite strong quarterly revenue as investors waited for Thursday’s earnings and spending outlook. Alibaba slipped 0.5% while Tencent lost 0.7%, showing that Chinese technology remained steadier than Korea’s memory-chip trade but not immune. Oil-driven inflation concerns and US consumer-price data remained the main tests for the region.
4. More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 17.16 | VIX FUTURES: 17.95 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (145.69) | MARKET REGIME: LOW-VOLATILITY BULL

1. Oil's advance on intensifying US-Iran tension over the Strait of Hormuz revived Fed-hike bets ahead of Tuesday's CPI print, amid an AI-valuation selloff in Asian chipmakers spilling into US futures. The S&P 500 closed Monday down 0.79% at 7,515.34. VIX rose to 17.16, with VIX1D jumping 48% to 14.63 pricing the CPI release.
2. The term structure stayed in contango through VIX1Y at 23.42, while SKEW held elevated at 145.69 and MOVE jumped to 77.77. SPXW pricing implies a 90-point (1.19%) weekly range into Friday's expiry; Fed Chair Warsh's first congressional testimony is the key catalyst alongside Wednesday's PPI.
3. For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~62,476 +0.29% | ETHEREUM ~1,780 +0.27% | IBIT 35.22 -2.79% | ETHA 13.37 -1.18%

1. Digital assets held a cautious tone Tuesday as the Middle East-driven risk-off mood and chip-sector jitters carried into crypto-linked equities. Monday's session saw IBIT and ETHA both lower, while miners fell broadly, led down by a 9.16% drop in Cifr and a 5.25% decline in Iren.
2. Circle received final OCC approval this month to establish a national trust bank for USDC custody, extending federal banking oversight to stablecoin reserve infrastructure for the first time among major issuers.

Commodities

1. Oil prices jumped almost 10% on Monday - their biggest one-day gain in more than three months - after President Trump reinstated the blockade on Iran and demanded a 20% toll on all cargo passing through the Strait of Hormuz. Brent extended its advance during the Asian session, rising a further 1.1% to USD 85 per barrel for the first time in a month, supported by short covering from wrong-footed traders and renewed concerns over Persian Gulf supply. Attention is now turning to China and whether it will once again help contain prices by limiting demand, after crude oil imports fell to a near-decade low last month.
2. Gold briefly fell below USD 4,000 on Monday as surging oil prices reignited inflation and rate hike concerns. However, it subsequently rebounded above that level as the dollar and Treasury yields failed to strengthen further despite the latest geopolitical developments, potentially signalling the first break in the recent market reaction function linking higher oil prices with weaker precious metals. On the monetary policy front, traders will closely watch the June US CPI report and Fed Chair Kevin Warsh, who begins his first two-day congressional testimony.
3. More in our Commodity News, Analysis & Commentary

Fixed Income

1. US Treasury yields moved higher as the renewed rise in oil prices reignited concerns that inflation could prove more persistent, potentially forcing the Federal Reserve to resume rate hikes. The two-year Treasury yield, which is highly sensitive to Fed policy expectations, climbed to its highest level in more than a year at 4.29%. Fed funds swaps now imply roughly a 50% probability of a July rate hike after Governor Waller argued that further tightening is needed to bring core inflation under control, with a full 25-basis-point increase fully priced by the September meeting.
2. JGB yields fell during Asian trading, with the 10-year benchmark dropping 6 basis points to 2.73%, supported by strong demand at a 20-year bond auction and after Finance Minister Katayama said GPIF portfolio allocations could be adjusted if necessary to encourage greater investment in domestic assets. She also floated the idea of making government bonds eligible for the tax-free Nippon Individual Savings Account programme, a move that could attract additional inflows into domestic bonds while supporting the yen.

Currencies

1. The USD responded cautiously with broad albeit modest gains following the latest geopolitical escalation and despite hawkish comments from Fed Governor Waller, with the Dollar Index trading a tad softer ahead of the European session.
2. USDJPY held near 162.45 after Monday’s sharp rise with a strong JGB auction and Katayama touting domestic assets having limited strengthening impact on the yen.
3. Markets now turn to upcoming US CPI data as the next key catalyst for Fed expectations and the dollar’s near-term direction.
4. More on currencies in our dedicated section: Forex Trading News & Analysis