Market Quick Take - Iran missile attack lifts oil as chip rout deepens, Fed decides - 29 July 2026

Market drivers and catalysts

1. Macro: An Iranian missile attack on US forces put oil back on the risk agenda hours before the Fed
2. Equities: US and Europe advanced on earnings, while Asia extended its semiconductor sell-off ahead of the Fed and Big Tech results
3. Volatility: Index vol eased while same-day risk repriced sharply ahead of the Fed and megacap results
4. Digital Assets: Crypto spot held its ground while listed proxies gave back Monday's gains
5. Commodities: Crude oil bounce on new US-Iran hostilities. Gold and silver choppy and sideways.
6. Fixed Income: US treasuries sideways ahead, uncertain of Fed’s next steps ahead of FOMC decision late today.
7. Currencies: US dollar reverses recent surge, eyes FOMC late today. AUD weak on soft inflation data.

Macro

1. The US said it intercepted a surprise Iranian attack on its troops and struck back, ending a three-night pause in hostilities. Iran-backed militias in Iraq hit Saudi oil facilities with drones for a second day, and Iran rejected Oman's proposal for shared control of the Strait of Hormuz, putting supply risk back into the price hours before the Fed decides. API data showed a 3.3 million barrel drop in US crude inventories, underlining tight supply.
2. The Fed concludes its two-day meeting today. A hold at 3.50% to 3.75% is the base case, with swaps pricing roughly a 30% chance of a 25 basis point hike. JPMorgan argues that is too high and assigns a 50% probability to a hawkish hold, noting recent energy prices point to disinflation ahead. Chair Warsh's press conference follows the statement.
3. US data were mixed. The Case-Shiller 20-city home price index rose 1.6% year-on-year in May, the fastest since August 2025 and above the 1.3% forecast, though real prices fell for a twelfth month with inflation at 4.2%. Chicago led at +6.9%, while Las Vegas fell 1.9%. The goods trade deficit narrowed to 101.5 billion dollars in June from 105.9 billion, and the first-half deficit shrank to 535.5 billion from 716.6 billion a year earlier.
4. In Australia, short-dated yields fell sharply as CPI data for June and Q2 came in cooler than expected. The headline June level was out at -0.1% MoM and 3.8% YoY vs. +0.2%/4.0% expected, respectively and the Q2 trimmed-mean CPI measure was out at +0.8% QoQ and 3.6% YoY vs. +0.9%/3.7% expected, respectively. Australian 2-year yields fell some seven basis points in reaction to the data.
5. More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1. 1800 – US FOMC decision
2. 1830 – US Fed Chair Warsh's press conference
3. Thursday: Bank of England decision, US Q2 GDP and the PCE deflator
4. Friday: Bank of Japan decision

Earnings events

1. Wednesday: Microsoft, Meta Platforms, Lam Research, Procter & Gamble, ARM Holdings, Qualcomm, Starbucks, SK Hynix, Hermes, L'Oreal, Rio Tint
2. Thursday: Apple, Amazon, Mastercard, Coinbase, Prada
3. Friday: ExxonMobil, Chevron, AbbVie, Moderna, Kioxia

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

Equities

1. USA: The S&P 500 rose 0.2% and the Dow gained 1.0%, while the Nasdaq 100 index fell -1.0% as a rotation into healthcare and consumer staples offset another semiconductor sell-off. Chipmakers remained under pressure on concerns about AI spending returns and rising Chinese competition, with Micron down 8.9% and AMD 8.2%, while the Philadelphia Semiconductor Index lost 4.5%. Coca-Cola jumped 5.0% after lifting its annual sales and profit forecasts, and Boeing gained 4.8% after generating positive free cash flow. Attention now turns to the Federal Reserve and results from Microsoft and Meta.
2. Europe: The Stoxx Europe 600 rose 0.4%, the Euro Stoxx 50 added 0.1% and the FTSE 100 gained 0.8% as strong consumer earnings and lower oil prices outweighed weakness in technology and energy shares. Unilever surged 8.0% after beating sales expectations and lifting guidance, while Mercedes-Benz gained 2.9% after quarterly operating profit rose 22%. Barclays fell 4.8% as its equities business lagged strong Wall Street comparisons, while LVMH finished flat despite a 3% rise in quarterly sales. Investors now watch the Federal Reserve and further European earnings for signs that gains can broaden.
3. Asia: Asian markets fell further in Wednesday trading, with South Korea’s Kospi down over 12% at one stage and hitting another trading halt before trimming losses to around 7%, Japan’s Nikkei 225 off 1.6% and Shanghai 0.5% lower, while Hong Kong’s Hang Seng bucked the trend with a 1.7% gain. SK Hynix dropped 12% after operating profit rose more than sixfold but missed elevated expectations, while Samsung Electronics fell 7.3% as investors questioned AI spending and expanding Chinese memory-chip capacity. Japan also faced pressure following the Kyushu earthquake, while oil rebounded on renewed Middle East attacks. The Fed decision and Microsoft and Meta results are the next major tests.
4. More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 18.20 | VIX FUTURES: 19.35 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (142.98) | MARKET REGIME: NEUTRAL / CHOP | AS OF ~06:00 CET

1. An overnight Iranian missile attack on US forces reset the risk backdrop before today's Fed decision. Cash VIX closed Tuesday at 18.20, down 2.57%, and VIX9D eased 4.85% to 17.25, but VIX1D jumped 20.47% to 15.77 as same-day event risk was repriced. VVIX slipped to 98.51.
2. The cash curve held its contango through VIX3M 19.86 and VIX1Y 23.29, SKEW eased to 142.98 and MOVE to 76.09, while OVX at 57.15 left oil vol more than three times the VIX. SPXW prices a 58 point move today, 0.78%, and 109 points into Friday, with the Fed and megacap earnings the catalysts.
3. For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~63,640 +0.6% | ETHEREUM ~1,889 +0.5% | IBIT 36.14 -1.71% | ETHA 14.49 -1.50% | AS OF ~06:00 CET

1. Digital assets held their ground overnight while listed proxies did not. Crypto equities gave back Monday's gains in Tuesday's tech-led session, with MicroStrategy down 2.5% and miners broadly lower, paced by a 6.5% fall in Iren and 5.7% in Cipher. Coinbase closed marginally higher ahead of Thursday's results.
2. Congressional leadership has signalled the Digital Asset Market Clarity Act will miss its window before the summer recess, and prediction markets now price 2026 passage near half, down from about three quarters a month ago.

Commodities

1. Crude reversed hard late in the session. WTI surged as much as 5% to top 83 dollars after Iran launched ballistic missiles at US forces, settling the move near 82.67, up more than 4%, and Brent gained almost 4% to trade above 87 dollars. That snapped a three-day slide which had been Brent's worst since April 2020, and Iran's rejection of the Omani plan to reopen the Strait of Hormuz may, in our view, keep a risk premium in the curve. Asian energy names including Woodside, Santos, Inpex and S-Oil were expected to follow oil higher. Oil volatility is, in our view, the standout cross-asset reading, with OVX at 57.15 still more than three times the VIX even after a 5.7% decline.
2. Gold traded near 4,020 dollars after a 1.1% fall on Tuesday, with the front-month contract at 4,021.5, as the earlier de-escalation trimmed the inflation-risk premium ahead of a finely balanced Fed. Gold miners underperformed the metal, GDX down 2.01% and GDXJ 2.24%. Silver held steady near 57.6 dollars after shedding more than 2% in the prior session; platinum was unchanged and palladium edged higher. Copper eased 1.02%, while natural gas added 1.16% and wheat 1.02%.
3. More in our Commodity News, Analysis & Commentary

Fixed Income

1. US Treasuries sold off slightly from Tuesday’s lows as fresh hostilities in the US-Iran conflict boosted oil prices early Wednesday. The benchmark two-year treasury yield was little changed from Tuesday’s close, trading near 4.29% early Wednesday after a 4.254% low intraday Tuesday. The benchmark 10-year treasury yield traded 4.61%, little changed from Tuesday’s closing level. The market is unsure whether the Fed will hike the Fed Funds rate later Wednesday, with 30% odds of a 25-bp rate hike priced ahead of the FOMC meeting late Wednesday.

Currencies

1. The US dollar rolled back lower late Tuesday and early Wednesday, especially versus a slightly resurgent Japanese ahead of the FOMC decision later in the day. USDJPY pushed lower to as low as 163.28 early Wednesday before rebounding slightly after testing the cycle and multi-decade highs Tuesday just below 164.00. EURUSD traded near 1.1400 after a 1.1353 low Tuesday.
2. The Australian dollar traded sharply weaker on softer than expected June and Q2 CPI data (see above), with AUDUSD trading as low as 0.6938 early Wednesday before rebounding above 0.6950 and AUDNZD nearly dropping to 1.2000 at one point after trading near 1.2080 before the data release. Australia’s short-dated yields have been volatile in recent days on RBA hawkish rhetoric and now soft data that lowers odds for an RBA hike at their August 11 meeting to almost nil.
3. More on currencies in our dedicated section: Forex Trading News & Analysis

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