US stocks were mixed with most major indices in the red, while the Nasdaq underperformed amid a slump in Alphabet shares - Newsquawk Daily Asia-Pac Market Open

• US stocks were mixed as weakness in Communication Services and a slump in Alphabet (GOOGL) weighed on the Nasdaq, while the S&P 500 closed little changed and the Dow Jones outperformed. Market breadth was slightly negative, with the equal-weight S&P 500 (RSP) edging lower. On a sector basis, Communication Services lagged after Google (GOOGL) tumbled during US trading on reports of further AI brain drain, with chief scientist Jeff Dean reportedly leaving the company to launch his own startup. Technology, however, was among the outperformers, supported by gains in Nvidia (NVDA) after SpaceX said it will no longer purchase AMD (AMD) chips, instead building its AI infrastructure solely on Nvidia hardware. The comments weighed on AMD, despite the company reporting strong earnings, while its capital expenditure exceeded expectations. Crude prices were choppy, with early gains pared as optimism grew around an agreement between Iran and Oman regarding the Strait of Hormuz. Reports suggested the framework would see Iran oversee inbound and outbound shipping through the Strait. However, Iranian officials stressed the agreement does not imply the Strait would fully reopen. Reports also suggested the framework would exclude tolls or transit fees, although Iran may seek compensation for providing maritime security.
• USD was once again weighed by a pullback in short-end US yields. The move came amid a slight decline in prices of crude and refined products in response to optimism about an imminent announcement of the Iran-Oman deal, which is expected to kickstart the path back to the reopening of the Strait of Hormuz. Earlier today, US President Trump said they will know regarding Iran in the next 48 hours. Separately, US data showed an ISM Services PMI miss, albeit still in expansion, while employment moved back into contraction and prices remained elevated. Ahead of NFP on Friday, the July ADP figure eased to 44k from June's 98k (exp. 70k), with Pantheon Macroeconomics in response noting it suggests that the risks to the July private payrolls figure are skewed to the downside.
• Looking ahead, highlights include Japanese Weekly Security Flows, Australian Building Approvals & Trade Data, Supply from Australia & Japan.

1. Subscribe to the free premarket movers reports

2. Trial Newsquawk’s premium real-time audio news squawk box for 7 days

LOOKING AHEAD

• Highlights include Japanese Weekly Security Flows, Australian Building Approvals & Trade Data, Supply from Australia & Japan.
• Click for the Newsquawk Week Ahead.

IRAN CONFLICT

• US removed Iran-related sanctions, including sanctions on select airlines, while a US Treasury official said the latest removal of sanctions on Iran is not indicative of any shift in US policy toward the Government of Iran, according to Fox's Heinrich, adding that "today’s removal was done as part of the normal administrative process upon review of the specifics related to FBA."
• US Secretary of State Rubio and UK Foreign Minister Miliband discussed the importance of Europe taking a greater role in its own security, while both reaffirmed a shared commitment to the security of navigation in the Strait of Hormuz.
• An agreement to reopen the Strait of Hormuz is approaching, while senior US officials and sources in the mediating countries say that the agreement could be announced as early as tonight, according to N12's Ravid.
• Iran said Iranian-Omani negotiations regarding joint arrangements for managing the Strait of Hormuz have reached important stages, according to Al Mayadeen citing sources, while the sources added that Iran believes this measure allows it to impose complete control over navigation and contributes to preventing accidents in the Strait of Hormuz.
• Iran reportedly threatened to hit Gulf states if the US launches new strikes, according to Reuters.
• Iran's Foreign Ministry said talks continue on the Strait of Hormuz with Oman and geographic characteristics have been agreed on. The ministry added a joint announcement by Oman and Iran is in the final stage, if "certain" third parties do not interfere.
• Iranian Foreign Minister Araghchi is expected to visit Pakistan on Friday, and is scheduled to meet Pakistani Army Chief Asim Munir, Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar, according to sources cited by RIA.
• Iran's Deputy Foreign Minister said understanding with Oman does not mean opening the Strait of Hormuz, according to IRNA. He added that with the implementation of the new understanding, other temporary routes in the Strait of Hormuz will be closed, while a significant part of the routes of entry and exit of ships will pass through Iranian territorial waters.
• The draft agreed to by Iranian and Omani negotiators awaits final approval from Iran’s Supreme Leader, two regional officials told the Associated Press. The officials said the potential deal is a temporary solution to the US-Iran dispute over shipping through the waterway and is tied to the agreement reached between the US and Iran in June that aimed to end the fighting and reopen the Strait, which ultimately collapsed. Furthermore, the potential deal will pave the way for the US and Iran to resume negotiations to reach a final deal on Tehran’s nuclear programme.
• Although the Iran/Oman Hormuz deal would exclude charging ships tolls or fees, Iran might not be prevented from collecting voluntary payments to cover costs like security and search and rescue, according to WSJ citing sources.
• Informed source emphasised that if the understanding between Iran and Oman is finalised, the reopening of the Strait of Hormuz will require separate arrangements that also include fulfilling US commitments, according to Fars.
• Gulf official told CNN there is a "50:50" chance the US and Iran could reach a deal by Friday, while adding that the Iranian delegation does not include the IRGC, which would need to sign off on details of a provisional agreement.
• Only "one or two issues" remain unresolved in Iran-Oman talks, according to a senior diplomatic source cited by Al Jazeera.
• Arab sources reported a missile attack on Bahrain, according to Fars.
• Israeli strikes were reported in southern Lebanon, while it was later reported Israel was ordering residents of towns in southern Lebanon to evacuate.
• Yemeni Houthis said they attacked a Saudi oil tanker off Yanbu with missiles and that "operations will continue and escalate in targeting Saudi oil tankers." Yemeni Houthis also later announced they targeted a Saudi oil vessel in the Gulf of Aden.

US TRADE

• US stocks were mixed as weakness in Communication Services and a slump in Alphabet (GOOGL) weighed on the Nasdaq, while the S&P 500 closed little changed and the Dow Jones outperformed. Market breadth was slightly negative, with the equal-weight S&P 500 (RSP) edging lower. On a sector basis, Communication Services lagged after Google (GOOGL) tumbled during US trading on reports of further AI brain drain, with chief scientist Jeff Dean reportedly leaving the company to launch his own startup. Technology, however, was among the outperformers, supported by gains in Nvidia (NVDA) after SpaceX said it will no longer purchase AMD (AMD) chips, instead building its AI infrastructure solely on Nvidia hardware. The comments weighed on AMD, despite the company reporting strong earnings, while its capital expenditure exceeded expectations. Crude prices were choppy, with early gains pared as optimism grew around an agreement between Iran and Oman regarding the Strait of Hormuz. Reports suggested the framework would see Iran oversee inbound and outbound shipping through the Strait. However, Iranian officials stressed the agreement does not imply the Strait would fully reopen. Reports also suggested the framework would exclude tolls or transit fees, although Iran may seek compensation for providing maritime security.
• SPX -0.17% at 7,723, NDX -0.83% at 29,488, DJI +0.49% at 54,354, RUT -0.59% at 3,019.
• Click here for a detailed summary.

TARIFFS/TRADE

• China's MOFCOM said it will impose countermeasures on six US entities and will take countermeasures against US compliance-testing firms.

NOTABLE HEADLINES

• Fed's Cook (voter) said she supported holding rates steady at the last FOMC meeting while waiting for more data, while she stated that it may yet turn out that the Fed does not need to raise rates, but commented that she is ready to raise rates if the disinflation trend does not return. Cook also stated the sour consumer mood is tied to a number of factors, including high inflation, and that the job market has been resilient.
• Fed's Kashkari (2026 voter, hawkish dissenter) said he was undecided whether to vote for a hold or hike into the FOMC meeting, according to a CNBC interview. He said he believes now is the time to start slowly moving rates up, while adding the objective is to bring inflation to the 2% target, not slow the economy down. Kashkari also said the economy is way better than it was in the 1970s and he is not calling for a dramatic increase in rates, but noted that there is more work to get inflation back to the target.
• US Treasury Q3 QRA reiterated that based on current projected borrowing needs, it anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters. US Treasury kept all nominal coupon and FRN auction sizes unchanged for August-October, including 2-year notes at USD 69bln, 3-year at USD 58bln, 5-year at USD 70bln, 7-year at USD 44bln and FRNs at USD 28bln/USD 28bln/USD 30bln (exp. unchanged).

DATA RECAP

• US S&P Global Services PMI Final (Jul) 54.6 vs. Exp. 53.6 (Prev. 51.2)
• US S&P Global Composite PMI Final (Jul) 54.5 vs. Exp. 53.6 (Prev. 51.9)
• US ISM Services PMI (Jul) 54.1 vs. Exp. 54.5 (Prev. 54.0)
• US ISM Services New Orders (Jul) 57.2 (Prev. 55.1)
• US ISM Services Business Activity (Jul) 59.1 (Prev. 55.4)
• US ISM Services Prices (Jul) 70.3 (Prev. 67.7)
• US ISM Services Employment (Jul) 47.4 (Prev. 51.2)
• US ADP Employment Change (Jul) 44K vs. Exp. 70K (Prev. 98K)

FX

• USD was once again weighed by a pullback in short-end US yields. The move came amid a slight decline in prices of crude and refined products in response to optimism about an imminent announcement of the Iran-Oman deal, which is expected to kickstart the path back to the reopening of the Strait of Hormuz. Earlier today, US President Trump said they will know regarding Iran in the next 48 hours. Separately, US data showed an ISM Services PMI miss, albeit still in expansion, while employment moved back into contraction and prices remained elevated. Ahead of NFP on Friday, the July ADP figure eased to 44k from June's 98k (exp. 70k), with Pantheon Macroeconomics in response noting it suggests that the risks to the July private payrolls figure are skewed to the downside.
• EUR gradually edged higher amid the softer buck but with resistance seen around the 1.1560 level, while in terms of data, Eurozone PMIs did not deviate enough from prelim figures to spark a reaction.
• GBP eked marginal gains but with trade contained within the 1.3400 handle amid quiet UK newsflow.
• JPY was choppy at the 157.00 handle and ultimately heads into Asia trade flat.

FIXED INCOME

• T-notes settled marginally higher as treasuries continued to track swings in oil prices, while economic data had little lasting impact.

COMMODITIES

• Oil prices pared their initial upside as reports pointed towards an Iran-Oman deal being in its final stages.
• US EIA Crude Oil Stocks Change (Jul/31) 2.479M vs. Exp. -1.85M (Prev. -7.167M)
• Israel and several Gulf countries are holding talks to promote alternative solutions for exporting oil and gas through routes that bypass the Strait of Hormuz and the Bab el-Mandeb Strait, according to Hayom.

ASIA-PAC

NOTABLE HEADLINES

• Chinese tax authorities have begun levying personal income tax on returns of offshore insurance policies, according to Caixin citing sources.

EU/UK

DATA RECAP

• UK S&P Global Services PMI Final (Jul) 52.1 vs. Exp. 51.8 (Prev. 48.8)
• UK S&P Global Composite PMI Final (Jul) 52.2 vs. Exp. 52.1 (Prev. 49.3)
• German Industry Orders (Jun) +21% Y/Y (Domestic Orders +1%, Foreign Orders +29%)
• German S&P Global Services PMI Final (Jul) 49.8 vs. Exp. 49.6 (Prev. 48.6)
• German S&P Global Composite PMI Final (Jul) 51.3 vs. Exp. 51.2 (Prev. 49.5)
• French S&P Global Services PMI Final (Jul) 49.6 vs. Exp. 49.8 (Prev. 46.8)
• French S&P Global Composite PMI Final (Jul) 49.4 vs. Exp. 49.6 (Prev. 47.2)
• EU S&P Global Services PMI Final (Jul) 51.7 vs. Exp. 51.6 (Prev. 49.4)
• EU S&P Global Composite PMI Final (Jul) 52.0 vs. Exp. 51.9 (Prev. 50.0)
• EU PPI (Jun) M/M -0.3% vs. Exp. -0.2% (Prev. 0.2%)
• EU PPI (Jun) Y/Y 4.6% vs. Exp. 4.6% (Prev. 5.9%)