Morning Brief: Iran Rules Out Strait Reopening Until US Meets Its Terms; US Stocks Edge Lower Ahead of CPI Release

Core Snapshot

🕊️ Iran says it will not reopen the Strait of Hormuz unless Washington fulfils its demands. Trump described Iran as “cunning”, crude prices keep climbing with Brent nearing USD 89 per barrel.

📉 Investors stayed cautious ahead of CPI figures. Fears over frothy financing within the AI ecosystem weighed on large‑cap tech names. US equities finished choppy sessions lower; S&P 500 fell 0.32%, Nasdaq lost 0.60%.

📊 US July CPI is due for release today. Consensus forecasts point to a 3.4% YoY headline reading and 2.5% YoY core CPI. Market‑priced odds for a September rate hike have climbed back close to 50% following soft non‑farm payrolls.

I. Market Outlook

Key Events

- 🕊️ Iran hardens negotiating stance: Tehran reiterated the Strait of Hormuz will remain closed until the US satisfies all its preconditions. Trump, in media interviews, labelled Iran a “cunning negotiator”, noting options range from sustained pressure to “severe military strikes”.

Exclusive View

Hormuz negotiations have shifted from near‑deal momentum to a stance that demands US concessions upfront. Market‑priced geopolitical relief is being repriced. Oil benchmarks have rallied and nearly recouped last week’s losses.

Today’s CPI print acts as a critical anchor for September Fed policy. Markets project July headline CPI at 3.4% YoY with a positive monthly reversal. A hotter‑than‑expected reading will lift odds for a preventive September hike. Benign inflation prints will cement expectations for steady rates.

II. Overnight Market Performance

— US Equities: S&P 500 ‑0.32% at 7728.20; Nasdaq ‑0.60% at 26445.45; Dow Jones ‑0.34% at 53791.85. Small‑caps bucked the trend and rose 0.32%. Concerns over AI‑sector financing froth pressured tech giants; Nvidia and Apple led declines.

— European Equities: STOXX 600 +0.01% at 660.51. DAX +0.26%, CAC 40 ‑0.13%, FTSE 100 ‑0.17%.

— Fixed Income: 10‑year US Treasury yield slipped less than 1bp to 4.690%. 30‑year yield flat at 5.241%. 2‑year yield down 1.7bps to 4.222%. Markets await directional triggers from CPI data.

— Commodities: September WTI crude +1.30% to USD 83.20/bbl; Brent crude +1.36% to USD 88.91/bbl. Spot gold ‑0.50% to USD 4368.81/oz; Silver ‑1.63%.

— FX: DXY +0.06% at 99.83; EUR/USD ‑0.02% at 1.1540; USD/JPY ‑0.02% at 159.27.

— Crypto: BTC ‑0.52%; ETH +0.49% at USD 1885.32.

III. Macro News

1. 🕊️ Iran: No Strait reopening before US meets conditions; Trump calls Iran “cunning”

Iran restated it will keep the Strait of Hormuz closed until the US meets every precondition. Trump told reporters Iran is a cunning negotiator, with policy choices including sustained pressure or heavy military retaliation.

Insight: US‑Iran talks have entered a phase of mutual posturing, as both sides push for more favourable final‑deal terms. The ongoing oil rally shows market hopes for an immediate strait reopening are fading.

2. 📊 September‑hike odds climb near 50% ahead of CPI

Soft July non‑farm payrolls previously dampened rate‑hike bets, yet rebounding crude has lifted September‑hike probability back toward 50%. Cleveland Fed President Hammack warned multiple hikes may be required to cool inflation. Consensus expects July CPI at 3.4% YoY, core CPI at 2.5% YoY.

3. 📉 US July existing‑home sales fall for second straight month

Sales dropped 1.7% month‑over‑month to an annualised 4.06 million units. Elevated mortgage rates and tight inventory keep lifting home prices and sidelining prospective buyers.

4. 🇺🇦 Zelenskyy submits Ukraine‑Russia peace proposal to Washington

He warned Russia may launch fresh mobilisation ahead of next month’s parliamentary elections. Diplomatic signals remain under watch following US‑Russia contacts in Manila.

5. 🛢️ Russia accelerates crude shipments to Asia via Arctic shipping lanes

Seven cargoes totalling roughly 6 million barrels have sailed toward Asia this year, with China the top destination. Russia is actively building alternative export routes bypassing traditional waterways.

IV. Corporate News

1. 💾 SK Hynix plans 50‑percent NAND output expansion at its China facility

The memory heavyweight deepens its China footprint amid geopolitical cross‑currents, reflecting long‑term strategic bets on the Chinese market.

2. ☁️ CoreWeave Q2 revenue surges 112%, beating estimates; order backlog hits USD 104 billion

Robust demand persists for AI cloud infrastructure. Sequential expansion of order backlog validates the long‑term growth narrative for AI compute leasing.

3. 📉 Kiwoom cuts target prices for Samsung Electronics and SK Hynix

Target prices revised to KRW 350,000 and KRW 2,100,000 respectively, while buy ratings are retained. The adjustment mirrors institutional caution over near‑term share‑price performance.

V. Today’s Focus

· 📊 US July CPI: Critical inflation print. In‑line or sub‑consensus 3.4% YoY readings will challenge hawkish hike expectations. Hotter prints boost September‑hike odds.

· 🇩🇪 Germany July CPI: Inflation metrics from the Eurozone’s largest economy.

· 📊 US July Federal Budget: Fiscal deficit figures.

· 📊 MSCI August Index Rebalance Announcement: ChangXin Memory was fast‑tracked into China indices; watch for further adjustments.

· 🛢️ EIA US Weekly Crude Inventories: Supply‑demand fundamentals amid Hormuz uncertainty.

· 🛢️ OPEC Monthly Oil Market Report: Updated global demand forecasts.