Morning Brief: Oman proposes joint management of Strait of Hormuz, crude oil posts largest 3-day drop in nearly 3 years; market rotation lifts Dow Jones over 1%

Core Snapshot

🕊️ Oman submitted a proposal to Iran for joint administration of the Strait of Hormuz with voluntary transit fees. Crude oil plunged for three consecutive days, with WTI falling below $80 per barrel.

📊 Market rotation took hold. The Dow Jones rose 1.03% as capital flowed into cyclical sectors, while the Nasdaq edged down 0.22% weighed by tech stocks.

💾 SK Hynix’s Q2 revenue and operating profit both missed market estimates, its after-hours stock slid over 5%. Microsoft, Meta, Arm and other tech giants will release earnings reports in a batch today.

I. Market Outlook

Key Catalysts

Oman proposes joint management of the Strait of Hormuz: Gulf insiders revealed Oman has delivered a plan backed by Gulf nations to co-administer the Strait of Hormuz and collect voluntary transit fees from passing vessels, preventing Iran from exercising sole unilateral control over the waterway.

WTI crude tumbled 4.05% to $79.26/bbl; Brent crude dropped 4.83% to $84.09/bbl. Oil prices recorded three straight days of sharp declines, marking the steepest three-day loss in nearly three years.

Exclusive Insight

Crude oil lost more than 20% cumulatively over three sessions, slumping from above $100 to below $80, as geopolitical risk premiums were rapidly erased. The core of Oman’s plan is to prevent Iran from holding exclusive unilateral control. The framework addresses Iran’s economic and strategic demands while eliminating extreme market fears of a unilateral strait blockade. Crude oil is likely to seek a new equilibrium within the $75–85 range in the short run.

SK Hynix’s after-hours drop of over 5% amid weak earnings turns short-term price elasticity concerns for memory chips from market speculation into tangible earnings reality. Earnings releases from tech heavyweights Microsoft and Meta today will determine whether the Nasdaq can halt its decline.

II. Overnight Market Performance

— US Stocks: S&P 500 +0.21% to 7428.78; Dow Jones +1.03% to 52747.32; Nasdaq -0.22% to 24876.91.

— European Stocks: Pan-European STOXX 600 +0.4% to 646.89. FTSE 100 +0.8%, DAX +0.41%, CAC 40 +0.63.

— Fixed Income: 10Y US Treasury yield -3.9 bps to 4.602%; 2Y Treasury yield -4.8 bps to 4.275%.

— Commodities: September WTI Crude -4.05% to $79.26/bbl; Brent Crude -4.83% to $84.09/bbl. Spot COMEX Gold -1.17% to $4,028.70/oz; Silver -2.12% to $57.1299/oz.

— Forex: US Dollar Index (DXY) -0.2% to 101.35; EUR/USD +0.2% to 1.1393; GBP/USD +0.1% to 1.3288.

— Crypto Assets: Bitcoin edged up 0.32% to $63,996; Ethereum rose 1.7% to $1,925.88.

III. Macro Headlines

🕊️ Oman proposes joint management of the Strait of Hormuz with voluntary transit fees

Gulf insiders stated Oman has submitted a Gulf-backed proposal to Iran to co-manage the Strait of Hormuz, restricting Iran’s ability to unilaterally block shipping routes, with transit fees collected on a voluntary basis.

Insight: This marks the first actionable diplomatic solution since the outbreak of the Hormuz crisis. The voluntary payment mechanism delivers economic incentives to Iran while ruling out extreme unilateral blockades. Crude oil has tumbled from above $100 to below $80 within three days as geopolitical premiums unwind rapidly.

🗣️ Trump holds meeting with Zelensky, discussing resumption of Russia-Ukraine peace talks and production of Patriot interceptor missiles

Insight: Diplomatic signals have also emerged on the Russia-Ukraine front. Coordination between US-Russia talks in Manila and the Trump-Zelensky summit will accelerate the systemic cooling of geopolitical risks.

🛢️ OPEC+ may pause output hikes for three months starting October

Sources stated that after completing the planned resumption of voluntary production cuts, OPEC+ will maintain approximately 2 million barrels per day of production cuts post-September.

Insight: OPEC+ has set a bottom floor for crude oil prices. If Brent crude sustains levels below $85, statements from OPEC+ will offer price support.

📊 US June goods trade deficit narrows amid broad import declines

Exports fell to a five-month low with sharp drops in industrial goods shipments. The marginal trade improvement is unlikely to offset second-quarter GDP drag from trade.

Insight: Falling imports reflect cooling domestic demand, while weak exports stem from slowing global trade and tariff uncertainties. Tariffs combined with trade fragmentation are eroding US-EU trade growth momentum.

IV. Global Corporate News

💾 SK Hynix Q2 revenue reached 79.32 trillion KRW, missing consensus estimates of 83.85 trillion KRW; operating profit also fell short of forecasts, sending its stock down over 5% after hours.

As a leading memory chip firm, its weak earnings validated prior market concerns that long-term fixed-price supply contracts would drag average selling prices below industry averages. Near-term earnings performance remains the core variable for the AI hardware sector.

🤖 Employees from OpenAI and Anthropic co-signed an open letter urging the US to slow AI development speeds, citing fears technology will outpace human regulatory capacity.

AI safety concerns have expanded from academia to core industry insiders. Regulatory pressure may materialize ahead of rapid technological iteration.

🏠 Apple restarts its smart home strategy centered on upgraded Siri AI. New products include its first 7-inch home hub, updated Apple TV and HomePod mini, competing against Amazon and Google.

Apple selected smart home hardware as the landing scenario for its AI applications, differentiating itself from OpenAI’s general chatbots and Microsoft’s enterprise-focused AI layout. For Apple, the terminal value of AI relies on synergy across its hardware ecosystem to materialize.

V. Key Focus Today

· Federal Reserve interest rate decision + Wash monetary policy press conference

Following sharp crude oil corrections, market focus centers on Wash’s outlook for inflation and the trajectory of interest rates.

· Earnings releases: SK Hynix, Meta, Microsoft, Lam Research, Procter & Gamble, Arm, Qualcomm, Starbucks

A wave of tech giant earnings is due, with Meta and Microsoft’s AI capital expenditure guidance set to dictate the short-term direction of the AI sector.

· US Weekly EIA Crude Oil Inventory Change

Following extreme crude volatility, inventory data will reflect fundamental supply-demand balances.