US stocks were mixed with most major indices in the green, while Nasdaq 100 dipped into correction territory - Newsquawk Daily Asia-Pac Market Open

US stocks closed mixed, with the S&P 500 eking out gains and the Dow Jones outperforming, which was driven by gains in UnitedHealth (UNH), Amgen (AMGN) and Sherwin-Williams (SHW), while the Nasdaq 100 was the clear laggard and slipped into correction territory during the session, with the index weighed on by semiconductor names, which saw the Semiconductor ETF (SOXX) and Memory ETF (DRAM) both post notable losses, tracking an extraordinary 10% decline in South Korea's KOSPI overnight as the global AI trade remained under heavy pressure. Despite the headline weakness, the equal-weight S&P 500 (RSP) advanced, highlighting positive underlying market breadth. On a sector basis, all but three sectors closed in positive territory, with Health Care, Consumer Staples and Materials outperforming, while Technology and Industrials—both heavily exposed to the AI theme—lagged alongside Energy, which was pressured by the sharp decline in crude prices.
USD was slightly weaker as the continued drop in oil prices and yields weighed ahead of the FOMC meeting on Wednesday. Optimism over the pause in strikes leading to a reopening of the Strait of Hormuz increased on Tuesday, helped by reports that mediators of the ongoing conflict in the Middle East believe the US and Iran are close to a deal that would resurrect the failed MoU. Trump recently stated that the US and Iran are in talks, although Iran reportedly said it hasn't sought talks with the US in the past 16-17 days. Separately, US data showed Consumer Confidence in July actually fell despite expectations for a slight improvement. Concerns over current business conditions worsened, with consumers less optimistic about future business conditions, while participants now look ahead to the FOMC on Wednesday.
Latest update: Iran launched missiles towards US base in Jordan.
Looking ahead, highlights include Australian CPI, Earnings from SK Hynix, Thailand Holiday.

More Newsquawk in 2 steps:

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 Australian CPI, Earnings from SK Hynix, Thailand Holiday.
Click for the Newsquawk Week Ahead.

IRAN CONFLICT

US President Trump said Iran understood it would never have a nuclear weapon, adding that Iran is talking, in a Fox News interview. Trump stated that Pickaxe Mountain was not a big problem and they knew exactly what was going on at the location, while he stated the US would take out Pickaxe Mountain "very easily" if there was no deal, and that Israeli PM Netanyahu wanted to stay involved in Iran, as well as noted this was a good time for Iran to make a deal. Furthermore, he said the US would go back and finish the job, and he would like to avoid hitting power plants and bridges.
US CENTCOM said as of July 28, it had redirected 18 commercial vessels, disabled two, and boarded two to ensure full compliance with the US blockade.
Several loud explosions were heard in Erbil, Iraq, while it was reported that flames have risen from the American base in Al-Harir in Erbil, according to Fars News citing sources.
Saudi Arabia MoD said air defences intercepted and destroyed several drones during the past hours, which had attempted to target petroleum facilities in the Eastern Region. It added that the attempts were once again launched from Iraqi territory and carried out by Iran-affiliated terrorist militias, affirming the Kingdom's legitimate right to defend itself and its capabilities, while reserving the right to respond at the appropriate time and place.
Mediators of the ongoing conflict in the Middle East believed the US and Iran were close to a deal that would resurrect the failed memorandum of understanding, according to The Times of Israel cited by Fox. The outlet, citing an Arab official and another source familiar with the discussions, reported negotiators from Pakistan, Egypt and Qatar had been working on clarifying how the Strait of Hormuz would operate. The two sources said the White House was waiting to make a decision until after President Trump met Israeli Prime Minister Netanyahu on Tuesday.
Oman was said to have presented Iran with a proposal for a joint regional mechanism to manage the Strait of Hormuz with "voluntary fees", according to Reuters sources, while a source said Iran would not exercise sole control of the Strait.
Iran said it had not sought US talks in the past 16-17 days, while sources said Iran was demonstrating "flexibility" over Strait of Hormuz operations.
Iranian Foreign Minister Araghchi said he was assured by the Ukrainian Foreign Minister that the attack on an Iranian ship was unintentional and Ukraine seeks no escalation, while he added that Iran does not seek escalation either. Furthermore, he stated, "Iran also does not want to escalate tensions, but I clearly emphasized that any attack on our citizens or interests is unacceptable. The damages and losses incurred must also be fully compensated."
Iranian Deputy Foreign Minister said any European ship that wanted to come near the Strait of Hormuz was a legitimate target, according to Fars. He added that if the southern route to the Strait of Hormuz was opened, Iran would no longer be able to exercise sovereignty over the Strait, while Iran was not afraid of taking any action to establish its sovereignty over the Strait, including resuming war, and the Strait of Hormuz would no longer return to its pre-war arrangements.
Iranian Deputy Foreign Minister said Tehran had proposed to Muscat that Iran manage one-way shipping transit on one side of the Strait of Hormuz, while Oman would manage part of the opposite direction. He said the Omanis proposed a route that would be 50% controlled by Iran and 50% by Oman, but Tehran said this would not address its concerns. He added Iran had proposed the entry route be completely under its control and part of the exit route also remain under its control, and if accepted, negotiations would move to the next stage. The Deputy Foreign Minister also said if Oman did not agree to Iran's proposal on the shipping lane, the Strait of Hormuz would remain closed, according to Al Jazeera.
Iranian Military Commander said any company or country that received money from Iranian assets would not be allowed to pass through the Strait.
Houthi military spokesperson said Yemeni armed forces carried out a military operation targeting the Saudi oil tanker NCC GHAZAL for violating the maritime navigation ban imposed on the Saudi enemy and for refusing warning calls. The spokesperson added the armed forces affirmed their continuation in implementing the maritime blockade against the Saudi enemy under the equation of "siege by siege and comprehensive escalation by comprehensive escalation."
UKMTO received a report of suspicious activity, in which the master of a tanker reported hearing an explosion whilst transiting in the southern Red Sea.
China held direct negotiations with Yemen's Houthi movement to ensure safe passage for its oil tankers through the southern Red Sea, according to Reuters citing sources. The report added Beijing was coordinating with the Houthis to maintain oil flows from Saudi terminals such as Yanbu.
Israeli PM Netanyahu reportedly struggled to get on US President Trump's schedule, according to Axios, which suggested the Israeli Prime Minister's influence was waning. Separately, the Israeli Prime Minister's spokesperson said Israel supported whatever path President Trump chose and that the two countries were fully aligned.
Senior officials in the Israeli Prime Minister's office said the meeting was "very good" and "very positive", adding the two leaders discussed all areas, primarily Iran, and reaffirmed their joint commitment to preventing Iran from obtaining nuclear weapons, according to N12. Separately, Israeli PM Netanyahu confirmed to Trump that further strikes against rehabilitated Iranian nuclear facilities were inevitable, according to Al Jazeera.
Tensions before the Trump-Netanyahu meeting were over timing on Iran rather than the objective, according to i24 News. While Israel and the US remained closely aligned on many major issues, there were several areas where the US believed Israel was moving faster than Washington preferred.
A potential meeting in London this week on the Strait of Hormuz involving UK Defence Secretary Streeting and US War Secretary Hegseth was no longer expected to take place, according to the BBC's Watt. Conversations were continuing as the various parties worked on planning and coordination for a potential future multinational mission.

US TRADE

US stocks closed mixed, with the S&P 500 eking out gains and the Dow Jones outperforming, which was driven by gains in UnitedHealth (UNH), Amgen (AMGN) and Sherwin-Williams (SHW), while the Nasdaq 100 was the clear laggard and slipped into correction territory during the session, with the index weighed on by semiconductor names, which saw the Semiconductor ETF (SOXX) and Memory ETF (DRAM) both post notable losses, tracking an extraordinary 10% decline in South Korea's KOSPI overnight as the global AI trade remained under heavy pressure. Despite the headline weakness, the equal-weight S&P 500 (RSP) advanced, highlighting positive underlying market breadth. On a sector basis, all but three sectors closed in positive territory, with Health Care, Consumer Staples and Materials outperforming, while Technology and Industrials—both heavily exposed to the AI theme—lagged alongside Energy, which was pressured by the sharp decline in crude prices.
SPX +0.22% at 7,429, NDX -0.98% at 27,763, DJI +1.03% at 52,752, RUT +0.20% at 2,954.
Click here for a detailed summary.

TARIFFS/TRADE

US President Trump said new tariffs would not hurt the economy and that tariffs had saved General Motors (GM), while stating that he did not want to update the USMCA, and that the USMCA was important for Canada and Mexico but not for the US.
Nvidia (NVDA) CEO Huang met US Commerce Secretary Lutnick on Tuesday as the Trump administration investigated potential violations involving Nvidia chip exports to China, according to Axios citing sources. It was separately reported that Chinese AI startup Moonshot sought more Nvidia (NVDA) Blackwell chips for its next model, according to The Information.
Germany was said to be working on mapping China's weaknesses in preparation for a potential future trade war, according to Bloomberg.
EU imposed anti-dumping duties on imports of polyamide yarns (nylon) from China, with tariffs ranging from 60% to 67.6%, effective from Wednesday.

DATA RECAP

US CB Consumer Confidence (Jul) 90.8 vs. Exp. 92.2 (Prev. 92.1)
US Wholesale Inventories Adv (Jun) M/M 0.3% vs. Exp. 0.2% (Prev. 0.1%)
US Retail Inventories Ex Autos Adv (Jun) M/M -0.2% vs. Exp. 0.3% (Prev. 0.3%)
US Goods Trade Balance Adv (Jun) -101.50B vs. Exp. -101.3B (Prev. -105.9B)
US Richmond Fed Manufacturing Index (Jul) 5 vs. Exp. 10 (Prev. 4)
US Richmond Fed Manufacturing Shipments Index (Jul) 8 (Prev. 3)
US Richmond Fed Services Revenues Index (Jul) -3 (Prev. -1)
US Dallas Fed Services Index (Jul) 6.6 (Prev. 2.9)
US Dallas Fed Services Revenues Index (Jul) 9.5 (Prev. 9.8)
US ADP Employment Change Weekly 15.0K (Prev. 16.5K)

FX

USD was slightly weaker as the continued drop in oil prices and yields weighed ahead of the FOMC meeting on Wednesday. Optimism over the pause in strikes leading to a reopening of the Strait of Hormuz increased on Tuesday, helped by reports that mediators of the ongoing conflict in the Middle East believe the US and Iran are close to a deal that would resurrect the failed MoU. Trump recently stated that the US and Iran are in talks, although Iran reportedly said it hasn't sought talks with the US in the past 16-17 days. Separately, US data showed Consumer Confidence in July actually fell despite expectations for a slight improvement. Concerns over current business conditions worsened, with consumers less optimistic about future business conditions, while participants now look ahead to the FOMC on Wednesday.
EUR was among the beneficiaries of the softer dollar, while there were few fresh catalysts from the bloc, although there were comments from German Chancellor Merz that the next EU financial framework could not afford exorbitant spending, and he did not agree with the EU's proposal.
GBP was ultimately flat as newsflow remained light for the UK and with participants also looking ahead to the BoE meeting on Thursday.
JPY failed to take advantage of the softer US yields and lower oil prices as price action was choppy with USD/JPY briefly approaching near the 164.00 level.

FIXED INCOME

T-notes rose across the curve as oil prices extended Monday's losses amid further signs of de-escalation between the US and Iran.

COMMODITIES

Oil prices sold off aggressively through the US afternoon, with WTI and Brent hitting troughs of USD 77.78/bbl and 80.67/bbl, respectively, after it was reported that mediators said the US and Iran are close to reviving the MoU.

GEOPOLITICAL

RUSSIA-UKRAINE

Ukrainian President Zelensky said he had a good meeting with US President Trump and discussed Patriot licences.
US envoys Witkoff and Kushner agreed to visit Kyiv for the first time in an effort to revive diplomatic efforts to end Russia's war in Ukraine, according to the FT citing sources. Timing had not yet been set and remained subject to change, although the Trump and Zelensky teams envisioned the visit taking place within the next two weeks.

ASIA-PAC

NOTABLE HEADLINES

An earthquake with a preliminary magnitude of 7.1 hit Japan's Kyushu, while Toyota (7203 JT) suspended operations at three facilities in Fukuoka following the earthquake, and Honda (7267 JT) suspended operations at its Kumamoto Prefecture motorcycle site.
Fitch affirmed Taiwan at AA with a Stable outlook.

EU/UK