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Oil jumps on Middle East attacks; tech stocks fall due to AI valuation concerns
Oil prices jumped by over 3% Wednesday, bond prices fell as U.S. sanctions against Iranian crude oil?threatened a ceasefire. Stocks wobbled due to concerns that the record AI rally might be losing its buyers. Brent crude futures rose 3.3% to $76.54 per barrel, the highest gain in a single day since May. Although this was far below the peak of $120 at the height of fighting, it was still enough to introduce a new inflation risk in the bond market. Jason Wong is a senior strategist with BNZ Wellington. "Obviously, the market does not like these attacks... But it's still not in full-blown panic mode," he said. The U.S. claimed it had hit Iranian air defences and coastal surveillance sites. Iran's Revolutionary Guards also said that they had targeted U.S. forces in Bahrain and Kuwait where air raid sirens were heard on Wednesday. Washington has also pulled back a concession that allowed Iran to sell its oil on the global market. The Iranian Foreign Ministry said this was a breach of the framework agreement to end the war. The benchmark 10-year U.S. Treasury notes yields have risen for the seventh consecutive day to a one-month-high of 4.56%. In Europe, yields in Germany and Italy on 10-year bonds reached new highs, at 3,04% and 3.85% respectively. David Chao is the Asia-Pacific Global Market Strategist at Invesco, based in Singapore. "I believe that Brent is still trading at levels which, in my opinion, do not take into account the ongoing flare-ups in the Middle East." The U.S. Strategic Petroleum Reserve's crude oil stocks fell to their lowest level in 1983 this week, making the markets more susceptible to supply shocks. SAMSUNG SINKS European market opened under pressure with the STOXX600 down 0.8% as healthcare and consumer shares saw sales, which offset gains in oil and Gas shares. U.S. stock futures and European stock futures are down between 0.2% and 0.3%. Investors were rattled when Samsung Electronics' shares fell for the second session in a row, despite the company reporting a 19-fold increase in profits. Analysts and investors worry that the demand for memory chips may slow down in the second half. In the past two weeks, the focus has shifted away from the hot chip stocks to other parts of the market. This includes financials and consumer stocks, and then back to so-called hyperscalers who have dominated the market for the past year or so. Samsung's results showed that investors are questioning valuations more and more as the bottlenecks of some parts of AI supply chains, such as data centres or memory chips, start to disappear. Pricing for AI models is also becoming harder to predict. You could see the market trying to determine the exact pricing power, which can lead to fluctuations in valuations. We also see that capex expenditure is increasing relative to EBITDA, meaning that the amount of assistance that can be provided via share buybacks etc. is decreasing. We may'see pressure on valuations within certain parts of the 'AI chain,' said Marieke Blom, ING Chief Economist and Global Head of Research. The dollar was stable on the currency markets. The euro hovered around $1.14, and the yen at 162, which is not far off its 40-year low. The minutes of the Federal Reserve's meeting last month are due on Wednesday. Traders believe that Kevin Warsh, as new chair, may reduce their detail in order to soften any possible policy message. Reporting from Tom Westbrook and Amanda Cooper, both in Singapore; editing by Jamie Freed and Sonali Paul.
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Singapore's Temasek green portfolio rises 7%, sees eneven climate path
Singapore's state-owned investor Temasek announced on Wednesday that its sustainable living portfolio had risen by a little over 7%, to S$49 Billion ($38 Billion), after it invested more money in renewable energy, power grids and other businesses related to the global transition to clean energy. Temasek has invested S$5 Billion in this area for the year ending March 31, 2026. After divestments, including O2 Power, the portfolio increased by S$3 billion. "We are pragmatic because we maintain our ambition to?net zero while remaining commercially disciplined about how and where we allocate capital," said Jasmine Teo at a press briefing. These investments include a?renewable-energy firm based in India, Luminace solar and energy platform, a?U.S. Amperesand is a Singapore-based company that specializes in grid technology. Commonwealth Fusion Systems is a U.S. Temasek reported that S$42 billion was invested in companies with products that support lower emissions, positive outcomes for nature or inclusive growth. Another S$7billion was invested in companies with higher emissions that are moving towards cleaner products and/or services. Temasek's 2050 goal of net-zero emissions remained unchanged. However, it is unlikely to reach its 2030 target of 11 million tons of carbon dioxide equivalent due to the surge in electricity demand, increased capital costs, policy instability and exposure to difficult-to-abate sectors. The portfolio's emissions were flat at 21 million tons for the year ending March 2026. This is a 30% decrease from 2020. Temasek expects emissions to increase in the near term with Sembcorp Industries' Alinta purchase. Teo stated that "real-world transition may sometimes increase emissions on a short-term basis." Reporting by Yantoultra ngi Editing by Tomaszjanowski
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Mike Dolan's market thoughts for midweek: Russia's Achilles' heel, stockpickers' territory and Europe's issue of self-esteem
Long/short hedge fund results prove that fundamentals are still important, and Europe continues underestimating its global power. In this midweek article, I will highlight some key stories that caught me eye?this week and may have been lost in the daily flood of market news. The pump doesn't work The late U.S. John McCain said in 2014 that "Russia is just a gas station posing as a nation." If that's the case, reports of Russia's people running out of fuel in the 4.5 year long war with Ukraine seem both absurd and very significant. The attacks on Russia's infrastructure have led to fuel rationing and rising prices, as well as a growing discontent among the public. Now, Russia is forced to import fuels from India and Kazakhstan. Gallup, a pollster, said that Russians were more pessimistic than ever before about their economy, according to a study published by the company last month. However, the fuel shortage is not yet reducing Russia's military threat. The Russian military responded harshly to the repeated Ukrainian attacks on their energy hubs. It began with one of the largest bombardments on Kyiv in the war, which took place last Thursday. This was followed by a second attack on Ukraine’s capital Monday. Will the Russians' anger over fuel shortages have an impact on the war? Or will it worsen it? Will it increase the risks of more deaths and damage to energy infrastructure in the region? Investors may have become numb to the conflict because it has been so long, but at some point, it will end. And the length of time still has huge implications for European security, defence, and energy spending. Wheat and Chaf The market rally may not be all about "fear of losing out" (FOMO). Goldman Sachs reported on Thursday that fundamental long-short hedge funds -- which use company-by-company analyses to assess financial health -- have just recorded their best quarterly returns since the bank started tracking them. They achieved a gain of 18%. It's not surprising, if you consider that certain chip stocks have doubled in value during the last quarter. Their forward earnings projections barely changed as the surge in share prices was matched by the revenue forecasts. Some chip and megacap shares ended the quarter in red, but not all stocks moved upwards. The "Magnificent 7" group ended the second half of the year in negative territory. Short sellers are still on the prowl. Michael Burry is one of the most famous short sellers who has been betting against AI stocks, chipmakers and SpaceX. The shops that focused on the fundamentals were able to separate the wheat from chaff in a quarter marked by massive changes in energy prices, Fed expectations, and geopolitical conflict. Let's hope they can continue this trend. PUNCHING UNDER ITS WEIGHT The NATO summit this week will focus on Europe's precarious situation amid the rise in "geoeconomics", the intersection of industrial, financial, and military policies. In a world of fraying allegiances, rearmament demands and high relative energy costs, Europe faces pressure from both the east and the west, amid an intensifying rivalry between Donald Trump's America, and China. Europe is facing a slew of threats, including tariff-related protectionionism from the United States and fierce import competition from China. It also faces a huge deficit in technology innovation and rising security risks. The NATO summit will highlight what Europe is doing in order to defend itself, and whether it would be credible if Washington were withdrawing from the transatlantic alliance. Beatrice Weder Di Mauro is the president of the Centre for Economic Policy Research. She wrote in the IMF magazine Finance and Development that part of Europe’s?problem lies in the fact that it views itself as a'middle-power' instead of fully recognising and mobilizing its economic and military heft. She writes that "values without power are frail," adding that "many nations in the world do not fully align with either of?the two rival superpowers, and therefore need a powerful "third pole" capable of projecting strength and serving as a stabilizing and moderating force." She ends with a strong message. "Europe must acknowledge that it is big, capable and consequential --and act accordingly." You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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As oil prices rise, chip stocks continue to fall
On Wednesday, oil prices rose as U.S. sanctions against Iranian oil and renewed fighting in the Middle East threatened the ceasefire. Stocks were shaky because the record-breaking AI rally is running out of buyers. Brent crude futures rose 3.2% to $76.54 per barrel, which is still a far cry from the wartime peaks above $120, but it's enough to cause a stir in the bond markets by increasing inflation risks. This is especially true since months of conflict has reduced global inventories. Jason Wong is a senior strategist with BNZ Wellington. He said: "Obviously, the market does not like these attacks... But it's still not full-blown pandemonium mode." U.S. stock futures and European stock prices were largely stable. Iran's Revolutionary Guards claimed that they had targeted U.S. military in Bahrain and Kuwait where air raid sirens were heard on Wednesday. Washington has also moved to withdraw an agreement that allowed Iran to sell its oil on the world market. The Iranian foreign ministry claimed this was a breach of the framework agreement to end the war. The 10-year U.S. Treasury Yields, which increase when prices drop, have risen about 3 basis points, to a monthly?high of 4.565%, and the 30-year yields are now above 5%. David Chao is the Asia-Pacific Global Market Strategist at Invesco, Singapore. "I believe that Brent is still trading at levels which I think do not take into account some of the?continued flare-ups in the Middle East." The U.S. Strategic Petroleum Reserve has seen its crude oil stocks fall to their lowest levels since 1983. This leaves the markets more susceptible to future supply shocks. SAMSUNG SINKS Investors were rattled when Samsung Electronics' shares fell for the second consecutive session, despite the company reporting a 19-fold increase in profit. Seoul's 5% fall has taken South Korean stocks more than 20% below their peak from last month. If this trend continues through the closing bell, it would be considered a bearish market, even though the KOSPI Index is up 70% so far this year. Sara Perring is the head of APAC cash equity sales for J.P. Morgan. J.P. Morgan Research says that we can expect increased volatility and foreign selling of Korean equities in the near future. Overnight, the Nasdaq broke through its 50-day moving median. Japan's Nikkei dropped 1.2% on Tuesday, but Hong Kong was a brighter spot. The battered technology index rose 3.8% and is heading for one of its best sessions this year as investors bought up laggards. The dollar was strong on the currency markets, pushing the euro to $1.14, and the yen past 162, raising the possibility of a Japanese pushback. The New Zealand Dollar blipped up about 0.5% to $0.57, after the Reserve Bank raised interest rates as expected. The minutes of the Federal Reserve's meeting from last month are due on Wednesday, and traders believe that Kevin Warsh will likely reduce any detail in order to dampen a policy signal. Steve Englander, Standard Chartered's head of North America macro-strategy, said that avoiding any discussion about rate increases could be interpreted by the market to mean a reluctance on your part to act. (Reporting and editing by Jamie Freed, Sonali Paul, and Tom Westbrook)
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Andy Home: The new metals trading environment is a result of the breakout in Shanghai nickel.
Metals trading and the world it operates in is constantly changing. Political and military conflicts have splintered what was once a highly globalised supply chain into parts that are more regionally diverse. Metals are?drifting from a global benchmark established by the 149 year old London Metal Exchange (LME), which is now owned by Hong Kong Exchanges and Clearing. In April, the Shanghai Futures Exchange (ShFE) opened its nickel contract to overseas firms. This is an indication of a 'changing reality. Shanghai has already become the main force for setting benchmark metals prices on China's domestic market. ShFE is now looking to expand its reach in Asia, capitalising off the Chinese nickel eco-system that connects mines and refineries in Indonesia with the Chinese mainland. It is not a fight to the death between London and Shanghai, or even the CME Group of the United States. This more fragmented trading environment offers opportunities to all. NICKEL BREAKOUT Beijing has been trying to internationalise renminbi for years, and the ShFE is part of that effort. Nickel is a good choice for a test run. In less than a decade, Indonesia became the world's largest supplier thanks to Chinese investment. Nickel?products are shipped to China to supply the huge stainless steel and battery industries. The Sino-Indonesian Nickel Trade offers a perfect forum to shift regional pricing towards China and the Chinese Yuan. This is a timely "booster" for the Shanghai Nickel contract. It took a bigger hit in volume than London did after the2022 Crisis, when the melt-up of prices forced both exchanges into suspension. Shanghai nickel futures trading volume tripled between 2025 and the first half this year, although comparison is inflated by the 30 million metric tonnes traded in January when markets were gripped with feverish speculation. What's the impact on LME? London nickel futures also increased by 22% on an annual basis. Nickel, including options, registered the highest growth rate amongst the LME's core base metal products from January to June. It seems that so far it is what the Chinese would call a win-win scenario. While LME nickel inventories have peaked, Shanghai's inventory continues to grow at levels last seen in 2017. The movement of surplus Chinese metal towards ShFE storage and away from LME storage suggests the emergence two distinct physical pricing centers. Steel Ties The LME, while grabbing a piece of the nickel action on the international level, is also grabbing a slice of the Chinese steel market in the form a U.S. Dollar futures contract that is settled against the Shanghai Hot-Rolled Coil (HRC). Trading will begin in October. The LME has a Chinese HRC Contract, which was settled based on the price reports of Argus for export cargoes at Tianjin port in China. Shanghai's contract is dwarfed in volume by the domestic contract because China is the largest steel market in the world. Last year, the LME's China HRC Contract traded 1.4 millions tons of steel. The Shanghai contract dealt with 1.7 billion tonnes. This LME-ShFE tie-up looks like a trial run for future collaboration, just as Shanghai's nickel venture may have been a model for other metals. FRACTURING Landscape The opening of Chinese prices is a reflection, of course, of China's centrality in both production and demand for metals. The eastward drift of the global markets reinforces this sense. Copper traders are already familiar with the feeling. Since President Donald Trump announced the possibility of U.S. tariffs on imports last February, the CME's U.S. price has diverged dramatically from the?LME. Two Doctor Coppers are in existence, one in Washington and the other in London. Both try to gauge what is happening around the globe. There may be three if Shanghai also goes international with copper contracts. Everyone's a winner? The nickel market is experiencing a realignment of trade patterns, and this has led to an increase in regional arbitrage. The global trading volume of base metals is increasing. The LME achieved a volume record in 2025, and the turnover increased by 18% in the first half of 2026. Shanghai's base-metals contracts saw a significant increase in activity during the first half of the year, with zinc being the exception. CME is also attracting retail investors to the metals market. Volumes of its micro-copper contract increased by 76% in the first half 2026. The contract was only a tenth of the size as its flagship contract, but the turnover reached 3.5 millions tons. The CME's weekly Copper Options Suite has seen a four-fold increase in trading activity this year compared to last. The world's three biggest metals exchanges are not fighting for a piece of a "static pie", but instead benefiting from an expanding pie. More participants are trading more metal in different parts of the globe. Andy Home is a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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What is the ceasefire? What is a ceasefire?
Ankur Banerjee gives us a look at what the European and global markets will be like today. And then, 'like that' we are back to looking at shipping routes through the Strait of Hormuz. A new round of tit for tit attacks has upended the tenuous U.S. - Iran ceasefire. This has clouded the long-term prospects of peace in the Middle East. Oil prices jumped 2% after investors worried about a slow recovery in Middle East supply. The U.S. has reimposed sanctions on Iran's crude oil sales, adding to the worries. Since the conflict began at the end of Feburary, the Strait of Hormuz has been a major focus. Investors are hopeful that the worst is behind us, and that gains in Brent crude will be contained. Investors are preparing for earnings season, so stocks have mostly taken a break after an AI-led wild ride. The yields on U.S. 10-year Treasury bonds, which increase when prices fall, rose about 3 basis points, reaching a new one-month record of 4.565%. Higher oil prices increased inflation risks. Later on Wednesday, traders will focus on the minutes from the Federal Reserve's meeting in June to gauge the mood and tone. The Fed is expected to raise rates at least one time by the end of 2026 in order to combat inflation. After a tumultuous week, the spotlight will be also on tech stocks. The afterglow from?the blockbuster IPO by SpaceX has been replaced with concerns about whether or not there is room?for more gains in the historic AI rallies. South Korea's SK Hynix began a U.S. stock sale on?Monday to raise 43 trillion won. The stock is due to begin trading on Friday. This will be a test of investor confidence. The KOSPI index fell another 5% and a short stop in trading was activated by the stock exchange. These halts have become more common, highlighting the unprecedented volatility of the world's most successful stock market. The following are key developments that may influence the markets on Wednesday. The UK Housing Survey for June * Federal Reserve Minutes during US Hours (by Ankur Banerjee, edited by Sonali Paul).
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Japan Q3 aluminium prices soar highest since 2015 due to Mideast supply squeeze
Five sources said that Japanese aluminium buyers paid a premium of $395 per ton between July and September. This was the highest price since 2015. The U.S./Israeli war against Iran has squeezed the supply. Japan is the largest Asian importer and benchmark for the region. Its premiums on primary metals are set at a level that exceeds the London Metal Exchange cash price each quarter. The premiums agreed to are up from $350-$353 per ton in April-June, the third consecutive increase. This is the highest since $425 between January and March 2015. As tensions ease, producers cut their offers Sources said that global producers sought to sell shipments from July to September for $460 to $480 per ton in late May. This was an increase of 30% to 37% over the previous quarter. However, they gradually reduced their offer to $395 before finally settling on this price. Sources at a Japanese rolling-mill said that the deals were made after producers reduced their offers, as Middle East tensions eased. "The terms were accepted by buyers once the offers dropped below the psychologically significant $400 mark." Sources at a Japanese Trading House said that the agreements were reached this week, after producers made concessions in order to lower offers below $400. Sources declined to identify themselves because the discussions were private. The war-related closure of the Strait of Hormuz has affected?supplies of aluminium from the Middle East. This region accounts for 9% of the global smelting capacities of aluminum. It also curbed the shipments of raw material needed to make the metal. In 2025, Japan imported?nearly 30 percent of its aluminum ingots, including alloy and primary metal, from this region. Two Gulf smelters were directly hit by missile strikes during the conflict. A series of announcements made last week regarding the restarting of supply has put pressure on metal prices. A'more durable ceasefire, and the return of shipping in the Strait have largely eliminated the war-related premium. Even so, there are still concerns about the fragility and the risk of a new supply disruption after the U.S.'s latest strikes on Iran. Aluminum stocks at Japan's three main ports According to Marubeni's June data, exports fell by 4.2% compared to a month ago to reach 238,900 tons, the lowest level in almost a decade.
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Aluminum rises after US-Iran ceasefire test
Aluminum prices rose on Wednesday as concerns about supply and risk increased after the new tests of the fragile U.S. Iran ceasefire. By 0300 GMT, benchmark three-month aluminum on the London Metal Exchange had increased by 0.61% to $3,156.5 per metric ton. The Shanghai Futures Exchange's most traded aluminium contract was up 0.72% to 23,085 Yuan ($3,396.60). The latest U.S. strike on Iranian targets following projectiles hitting ships in the Strait of Hormuz threatens to generate once again a?supply-risk that had been largely dissipated after last month's truce deal. Around 9% of the world's aluminium smelting is done in the Middle East. After peace talks between countries, participants were able to 'price out war risk premium', aluminium fell 16% in June. This was its biggest monthly drop since the global financial crisis of 2008. ING analysts stated in a report that the market will still be in a 'deficit' this year. Lower prices have also attracted some interest from buyers in China and helped to support the price. Copper prices also fell slightly ahead of Wednesday's publication of the minutes from the U.S. Federal Open Market Committee meeting in June, which will be closely monitored for clues about the Fed's future interest rate policy. Red metals, which benefit from economic growth, have been impacted by fears of interest rates rising for longer. Higher rates impede the economy. The LME copper price fell by 0.16%, while the SHFE price dropped by 0.09%. The world's largest consumer, China, is still a strong market. The Yangshan The copper premium, which measures the buying interest?there, reached a record high of $80 per ton on February 2, a period of 13 months. Other LME metals include zinc, which fell 0.14%. Lead gained 0.98%. Nickel lost 0.57%. Tin lost 0.96%. On the?SHFE, tin was 0.06% higher, while nickel fell 0.79%, and lead rose 1.51%.
NATO chief: New US strikes on Iran are absolutely necessary
Mark Rutte, NATO Secretary General, said that the?new U.S. attacks on Iran? were "absolutely needed"
The?U.S. The?U.S.
Rutte said to reporters in Ankara, before the NATO summit. "When there is a ceasefire and Iran basically violates the ceasefire I think that it is absolutely crucial that the U.S. react forcefully."
The European leaders will try to persuade Donald Trump to commit to the alliance after he renewed his disagreements with them regarding the Iran War and Greenland.
Rutte stated that there was no doubt about the "complete commitment" of the United States to NATO, which he added also worked to protect the United States.
He?added: "But there is?also an expectation that Europeans and Canadians will?equalise their spending with the United States. I think this is fair."
The good news is, this?is today's big win. It is the loss of Putin and a win for President Trump that the Europeans are able to do this. Reporting by Lili and Andrew Gray, Writing by Bart Meijer, Editing by Tom Hogue & Andrew Heavens
(source: Reuters)