North American Morning Briefing: Oil Ticks Up as Hostilities Continue in Middle East

OPENING CALL

Stock futures were up Monday after the U.S. military announced a ninth consecutive night of attacks late Sunday, pushing oil prices higher.

International and U.S. oil prices rose to their highest levels since early June, with Brent crude futures briefly topping $90 a barrel.

"The conflict has intensified markedly, with a fresh wave of tit-for-tat attacks underscoring how quickly the situation is deteriorating," Deutsche Bank said. "Prospects for any diplomatic breakthrough remain dim."

U.S. gasoline prices climbed back to $4 a gallon on Monday as the Iran war continued to squeeze global oil supplies and push up energy costs.

"Elevated energy costs could reinforce the expectations that the Federal Reserve could raise interest rates," Hola Prime said. Despite weaker-than-expected inflation figures published last week, the Fed is still expected to increase rates before year-end.

Meanwhile, the chip-stock selloff that dominated last week looks set to pause today.

Second-quarter earnings season rolls on, with results due from companies including Alphabet, Tesla, IBM and Intel over the next few days. Otherwise, it's a quiet week for economic data and Fed speak, with policymakers in a blackout period ahead of next Wednesday's interest-rate decision.

Stocks to watch

Alibaba rose after it previewed its new AI model, which it said is second only to Anthropic's Fable 5.

AMC Entertainment, Domino's Pizza: Both companies are set to report second-quarter earnings ahead of the opening bell.

Micron Technology, Marvell Technology, Intel, Advanced Micro Devices: Shares in the chipmakers recovered slightly in premarket trading after Friday's tech selloff, which was triggered by the release of a new model from China's Moonshot AI.

Segro slipped in London after Prologis said Segro rejected its takeover bid, the industrial real-estate company's third attempt to buy it.

Watch For:

Canada CPI for June

Today's Top Headlines/Must Reads:

- Everyday Investors Are Over the Mag Seven and Into New AI Darlings

- The Massive Supply Deals Feeding the AI Frenzy Are No Sure Thing

- The Key to Solar and Wind Power Is Battery Storage, and China Is Dominating

MARKET WRAPS

Forex:

The dollar traded steady, showing little reaction to an escalation in strikes between the U.S. and Iran.

The euro rose. A tighter correlation between energy prices and short-dated euro swap rates seems to be supporting the euro as the Middle East conflict escalates, ING said.

Sterling rose

as Andy Burnham is set to become the U.K.'s prime minister Monday. It completes a surprisingly smooth transition of power from Keir Starmer who announced his resignation as prime minister last month, Commerzbank said.

Bonds:

Treasury yields rose

across maturities in European trade, reflecting an escalation of the Middle East conflict and a subsequent rise in oil prices. "President Trump's defense of expanded U.S. strikes on Iran has strengthened fears that the confrontation could last longer or move beyond its original objectives," Zaye Capital Markets said.

The war between the U.S. and Iran continues to put pressure on oil prices as well as global rates, bond yields and monetary policy expectations, Danske Bank said. As a result, the 10-year Bund yield is back above 3% , while 30-year Treasury yield is above 5%.

The inflation impact on bond yields is more important than fiscal considerations, said AXA IM Core. Elevated levels of government bond supply

will be more easily absorbed if investors buying the bonds are confident of maintaining the real value of their investments.

Energy:

Brent crude, the global oil benchmark, was up 3.2% in early trading on Monday, while West Texas Intermediate gained 2.8%.

Metals:

Gold prices dropped as escalating attacks between the U.S. and Iran pushed Brent crude back above $90 a barrel, reinforcing concerns over inflation concerns despite softer U.S. inflation data.

Gold chart

Comex gold futures were likely to remain in a bearish technical setup, based on the daily chart, RHB Retail Research said.

Copper

Copper rose in early trade. Copper prices were likely to be driven by sentiment around artificial intelligence, which is increasingly shaping expectations for future power and copper demand, Goldman Sachs Research said.

Iron

Iron ore fell in early trade. Broader demand for the ferrous metal remains weak, with China's structural slowdown in steel consumption showing little sign of reversing without targeted policy support, ANZ Research said.

   TODAY'S TOP HEADLINES 

Lockheed Martin Plans Bargain-Rate Patriot Missile to Replenish Low Stockpiles

Lockheed Martin said it would field a new and cheaper model of Patriot missile that could hit the battlefield faster, as global stockpiles of high-end interceptors dwindle.

The company said its PAC-3 Adapted Capability Effector can be made more quickly and will cost buyers less than half as much as its bestselling Missile Segment Enhancement version. Recent Army budget documents show MSE interceptors cost more than $4 million a round.

Alibaba Says New AI Model Is Just Second to Anthropic's Fable 5

Alibaba Group previewed its new artificial-intelligence model that it says is second only to Anthropic's Fable 5, the latest sign that China is fast closing the gap with the U.S. for global technological dominance.

The preview version of the Qwen3.8 Max, the company's latest flagship large language model, boasts 2.4 trillion parameters, and is available on Alibaba's coding platforms, the Hangzhou-based company said in a post on X.

Prologis Says Segro Rejected Sweetened $18.2 Billion Offer

Prologis said Segro has rejected a sweetened third takeover offer that values the company around 13.5 billion pounds, equivalent to $18.16 billion.

The world's largest owner of industrial real estate said Monday that a third offer was rejected on July 17. This followed a second approach, which was rejected days prior on July 12. The revised offers come amid a flurry of trans-Atlantic dealmaking that has resulted in some of the longest-standing members of the London Stock Exchange leaving the bourse.

Ryanair Shares Fall After Profit Drops on Lower Fares, Fuel-Cost Headwinds

Shares in Ryanair slid after the budget carrier posted a drop in fiscal first-quarter profit, hit by lower fares and fuel-cost headwinds stemming from the conflict in the Middle East.

In European morning trade, shares were 6.5% lower at 24.28 euros, and are down 18% so far this year.

Oil Holds Near $90 a Barrel, U.S. Stock Futures Edge Higher

Oil pared gains but continued to trade close to $90 a barrel in early European trade as further escalation in the Middle East worried investors, though U.S. stock futures largely edged higher.

Iranian strikes against U.S. forces in Jordan killed two American servicemembers and left a third presumed dead, while the U.S. responded with further attacks on Iran. Defense Secretary Pete Hegseth said the death of the U.S. servicemembers "stiffens our resolve", raising the specter of escalating American attacks and a further challenge to normalizing transit through the Strait of Hormuz.

ECB to Hold Rates Steady as Rebound in Energy Prices Threatens to Revive Inflation

The European Central Bank is expected to keep its key interest rate on hold Thursday, but might signal that further rises in borrowing costs are possible after an escalation of the conflict between the U.S. and Iran pushed energy prices higher.

In June, the bank raised its key rate for the first time since 2023 to 2.25% from 2%, as policymakers judged that the surge in energy costs prompted by the closure of the Strait of Hormuz was too strong to ignore.

The Massive Supply Deals Feeding the AI Frenzy Are No Sure Thing

Contracts worth billions of dollars have become the commercial glue holding the AI boom together. But investors shouldn't rely on them sticking if the boom fades.

Contracts to supply computing power for artificial-intelligence calculations have become such a fixture of the craze that whole industries have begun reorganizing around them. AI suppliers say these arrangements give them unprecedented visibility into their future revenue, allowing them to wow investors with promises of bumper sales and profits ahead.

Everyday Investors Are Over the Mag Seven and Into New AI Darlings

If the artificial-intelligence boom is a gold rush, Alex Cardona wants to start digging outside the usual spots.

That's the strategy the 50-year-old director at a software company had in mind when he dedicated a chunk of his portfolio to investing in AI infrastructure firms such as data-center operator Equinix and semiconductor company Marvell Technology.

FDA Walks Back Finding of Cyclospora Parasite as Outbreak Probe Continues

Taylor Farms said that the Food and Drug Administration has apologized after the agency walked back an earlier statement that the parasite linked to an outbreak affecting thousands of people had been detected on a sample of its lettuce.

The FDA on Sunday said it has yet to identify the presence of cyclospora on samples of lettuce from the company despite recent tests. The agency now deems the detection that it reported Saturday a false positive after laboratory experts reviewed the sample results.

Five Cups of Coffee a Day Is Fine for Most Adults, Heart Association Says

There is good news for coffee drinkers: Up to five cups of the brew a day are safe for most adults and may even have benefits for heart health, according to a new scientific statement by the American Heart Association.

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July 20, 2026 06:10 ET (10:10 GMT)