Crude Oil & Indices

As the weekend began, the US-Iran situation continued to escalate.

On Friday, US officials revealed that Trump had ordered a new round of large-scale strikes on Iran, which could start over the weekend, with energy infrastructure possibly being a target. Iran, on the other hand, claimed that a drone had attacked the Ahmed Jaber Air Base in Kuwait, and two oil tankers passing through the Strait of Hormuz under US military escort were also hit. At that time, neither Kuwait nor the US confirmed these claims.

On Sunday morning at 10 a.m., Trump suddenly called off the operation. He stated that, at the request of Iran, Saudi Arabia, the UAE, Qatar, and others, the US was canceling the planned strike, on the condition that all parties could quickly reach an agreement, with Israel also joining this commitment.

On TradeXYZ, the crude oil contract plummeted from around $85.5 to below $83 upon the news, then continued to dip to around $79.

The S&P 500 rose from around 7470 points to above 7500 points, reaching as high as 7535 points later on.

By the end of the weekend, both CL and Brent contracts had fallen by over 8%, while the S&P 500 had risen by about 0.8%. Crude oil retracted gains from the previous day, where the risks of war and supply disruptions were still looming, while the stock index traded directly on the cancellation of the large-scale strike.

However, the agreement mentioned by Trump has not yet materialized. He stated that progress was close on arrangements regarding the Strait of Hormuz, and Iran's Foreign Minister also indicated that discussions with Oman were in the final stages. Yet, an Iranian Foreign Ministry spokesperson emphasized that the discussions were about a new shipping route and not directly negotiating the closing or opening of the strait. The issue of whether vessels need to pay fees remains unresolved as well.

The $79 oil price has already reflected the canceled airstrike but has not factored in the full reopening of the Strait of Hormuz.

Precious Metals

Impacted by the easing of US-Iran tensions, spot gold opened, breaking $4080 once, with gold on TradeXYZ subsequently up around 0.5%, and silver up about 1%. Both saw a drop and rebound after futures trading began, with the current gains significantly narrowing compared to the weekend.

Stocks

Over the weekend, individual stocks generally rose, with technology, communication, consumer, and crypto concept stocks all seeing varying degrees of recovery.

The storage sector showed strong performance, with an overall increase of about 3.5%. SK Hynix's South Korean stock rose in early trading but then fell back, showing some relative weakness compared to other stocks in the same sector.

Mag7's divergence is concentrated in Apple.

Excluding Apple, the subsequent price increases of the other six companies were around 1.4%-2.0%, while Apple only rose by about 0.4%. Although Apple's end-of-July financial report exceeded expectations, the slowdown in its services business, weak performance in the Chinese market, and supply chain constraints suppressed its weekend performance.

The market is currently choosing to believe in Trump's cancellation of the strike, while still not completely removing the defenses against war back-and-forth. As long as the next war signal does not appear, the risk premium on oil will still be under pressure, and stock indices and tech stocks will continue to enjoy this brief recovery window.

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