U.S.-Iran Strike Pause Eases Oil Prices
PHOTO CAPTION: Military helicopters and personnel operate in a location given as the Arabian Sea in this screengrab obtained from a video released by U.S. Central Command (CENTCOM) on July 25, 2026. CENTCOM said the video showed U.S. operations enforcing a naval blockade against Iran. U.S. Central Command/Handout via REUTERS THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT VERIFICATION: - Reuters could not verify the location or date when the video was recorded. - No older versions of the footage were found posted online before July 25. - The identity of one of the ships was confirmed as Charminar by its shape and colours, which matched archive images. - The identity of the other vessel seen at the end of the video could not be verified.
Investors entered Monday cautiously optimistic that the pause in fighting between the United States and Iran could mark a step toward de-escalation, sending oil prices lower and lifting U.S. technology-stock futures.
The U.S. military halted its attacks after nearly two weeks of bombing, partly amid concerns about dwindling ammunition. Iran said it would also pause its operations for as long as the United States continued to hold fire.
Houthi attacks on oil facilities in Saudi Arabia complicated the outlook, but markets largely treated the developments as a reduction in immediate tensions.
Brent crude fell about 4% to $92.80 a barrel. Oil had briefly climbed above $100 last week for the first time since May.
Reuters columnist Wayne Cole wrote that the market reaction suggested prices near $100 may be the point at which Washington becomes more reluctant to continue military escalation, potentially giving both sides an incentive to keep talking.
Stock markets offered a more restrained response. Nasdaq futures rose 1%, while Asian equities declined as investors prepared for a wave of technology earnings that could renew concerns about the vast amounts companies are spending on artificial intelligence.
Those spending levels were highlighted by a Wall Street Journal report that Nvidia was discussing a roughly $250 billion financial backstop for OpenAI as part of a data-center project.
Microsoft, Meta Platforms, Amazon, Apple and Qualcomm are among the major technology companies scheduled to report results this week. Numerous industrial, defense and healthcare companies are also due to release earnings.
About one-third of the companies in the S&P 500 are expected to report. Earnings are currently on pace to rise 26.5% from a year earlier, though even that growth may not satisfy elevated investor expectations.
In China, chipmaker CXMT Corp surged 500% in its Shanghai trading debut after raising $8.6 billion in Asia’s largest initial public offering of the year.
The drop in oil prices helped government bonds recover after a difficult week.
Federal funds futures also removed approximately 2 to 3 basis points of expected tightening from the market curve. Investors still placed the probability of a Federal Reserve interest-rate increase this week at about one in three.
Most analysts expect Federal Reserve Chair Kevin Warsh to oppose an immediate increase, though one or two policymakers could dissent in favor of raising rates.
The Bank of England is scheduled to announce its decision Thursday, followed by the Bank of Japan on Friday. Both central banks are expected to leave rates unchanged while remaining cautious about inflation.
Singapore’s central bank illustrated the continuing inflation risks Monday when it unexpectedly tightened policy by allowing its currency to appreciate slightly faster.
Market attention Monday was also expected to include Germany’s July Ifo business-sentiment report.
(Source: Reuters)
