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Posted August 3, 2026 at 9:45 am
Briefing.com Summary:
*Oil prices and bond yields are sinking after President Trump canceled a planned attack on Iran.
*There are some pockets of weakness in the semiconductor group that have held back parts of the market.
*The U.S. and Japan confirmed a coordinated intervention to prop up the yen.
According to President Trump, the biggest attack since World War II was being planned for Iran, but he tabled the plan at the behest of Gulf allies and Iran itself to pursue a diplomatic solution. The response by the oil market was textbook. Crude prices sank in a relief trade.
Currently, WTI crude futures are down 6.8% to $78.89/bbl, and Brent crude futures are down 5.7% to $82.90/bbl. Treasury yields have followed suit. The 2-yr note yield is down four basis points to 4.25%, and the 10-yr note yield is down seven basis points to 4.68%.
This relief continuum has extended to the stock market, but notably, it has had its limits.
The S&P 500 futures are up 45 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 57 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are up 635 points and are trading 1.0% above fair value.
Unlike prior instances, when the president has called off planned military strikes against Iran, there hasn’t been an unmistakable relief rally. Standing in the way of that this time is a relatively weak semiconductor group, with memory stocks absorbing some early hits that have come on the back of a 5.1% decline in South Korea’s Kospi.
The rest of the market, though, seems to be getting a lift from the decline in oil prices and bond yields. Microsoft (MSFT) and Amazon (AMZN), two of last week’s biggest gainers on the other side of reporting earnings, are up again today. Each is tacking on another 2.0% pre-open in a move that is propping up the major indices.
This week will feature another heavy week of earnings reporting, along with a slate of economic data that includes the July ISM Manufacturing Index at 10:00 a.m. ET today, the July ISM Non-Manufacturing Index at 10:00 a.m. ET on Wednesday, and the July Employment Situation Report at 8:30 a.m. ET on Friday.
Meanwhile, it was confirmed by Treasury Secretary Bessent that the U.S. participated in a coordinated intervention last Friday with the Ministry of Finance and the Bank of Japan to help strengthen the yen, which had hit a 40-yr low against the dollar. Secretary Bessent added that “we will not hesitate to participate in further joint intervention.”
USD/JPY sits at 156.86 after hitting 163.91 last Wednesday.
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Originally Posted August 3, 2026 – An attack plan for bulls that revolves around Iran
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