US-Iran Pause Holds, Oil Slumps as Chip Selloff Hits Wall St
As of 2026-07-28 00:00 SGT
Key points
- The US and Iran held a fighting pause for a third straight night; Trump told Axios he chose to pause strikes to give negotiations "space," warning of renewed military action if talks fail
- WTI crude tumbled 6.83% to $83.21 and Brent slipped below $90 as easing Middle East supply fears drove the sell-off
- Dow futures gave back most of an early rally of more than 600 points as chip stocks tumbled; the Philadelphia Semiconductor Index fell close to 5%, with ASML and BE Semiconductor Industries automatically halted after reports China is producing domestic DUV lithography tools
- USD/JPY held near-flat at 163.71 and EUR/USD at 1.1379, both within 0.1% of unchanged as traders await this week's FOMC decision
- Asian equities closed higher: the Nikkei 225 added 0.50% to 64,931 and the Hang Seng gained 0.98% to 25,207, its first close above the 100-day moving average in more than two months
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 163.71 | -0.05% |
| EUR/USD | 1.1379 | +0.04% |
| Nikkei 225 (close) | 64,931 | +0.50% |
| Hang Seng (close) | 25,207 | +0.98% |
| Dow futures | 52,233 | +0.21% |
| S&P 500 futures | 7,427.25 | -0.27% |
| Nasdaq 100 futures | 28,004 | -0.98% |
| Gold futures | 4,079.30 | +0.21% |
| WTI crude | 83.21 | -6.83% |
| Bitcoin | 64,488 | -1.29% |
| US 10-yr yield | 4.645% | -3.4bp |
Foreign exchange — USD/JPY rangebound
USD/JPY is little changed at 163.71 (-0.05%), holding inside the prior day's 163.93-163.65 range as easing geopolitical risk from the Iran pause offsets dollar demand ahead of this week's FOMC decision. EUR/USD is similarly flat at 1.1379 (+0.04%), stuck inside the 1.1400-1.1368 band. Bank of America strategist Shusuke Yamada said the Bank of Japan needs to signal a hawkish stance to successfully defend the yen, flagging 165 as the next intervention-watch level for USD/JPY; swaps currently price just a 27% probability of a 25bp BOJ hike in September. Ahead of the Tokyo open, USD/JPY should stay rangebound in the high-163s, with intervention chatter likely to build should the pair approach the 165 level.
Equities — chip selloff caps early Iran-pause rally
US stocks opened sharply higher, with the Dow briefly up more than 600 points on the Iran fighting pause, before paring gains through the New York morning; Dow futures now show +0.21% (52,233) while S&P 500 futures have slipped into the red at -0.27% and Nasdaq 100 futures are down -0.98%. The Philadelphia Semiconductor Index fell close to 5%, AMD dropped more than 8% and Nvidia more than 5%, while ASML and BE Semiconductor Industries were automatically halted in Amsterdam after falling 8-8.7% on reports a Chinese state-linked firm has begun producing DUV lithography equipment. In Asia, the Nikkei 225 closed up 0.50% at 64,931 and the Hang Seng rose 0.98% to 25,207 — its first close above the 100-day moving average in over two months, though on still-thin volume. Shanghai-listed memory chipmaker CXMT surged 466% on its trading debut, briefly making it China's most valuable listed company. Through the rest of the NY session, the tug-of-war between chip-sector weakness and Iran-pause optimism should keep the major indices mixed.
Macro — Treasury yields fall as tensions ease
Treasury yields tumbled broadly as Middle East tensions eased, with the 10-year yield at 4.645% (-3.4bp). The Treasury's $69bn 2-year note auction priced at a high yield of 4.315%, up from 4.189% on June 23 and the highest since February 2025, though a 2.66 bid-to-cover ratio pointed to solid demand. The Fed is widely expected to hold its policy rate at 3.75% at this week's FOMC meeting. Into the Asia session, positioning ahead of this week's FOMC and BOE decisions should keep macro trading cautious.
Commodities — oil slumps, gold holds firm
WTI crude fell 6.83% to $83.21, breaking well below the prior day's $92.83-$87.68 range, while Brent dipped under $90 as the Iran pause eased supply concerns; Trump himself pointed to falling oil prices and rising stocks after announcing the halt. Gold futures held firmer at $4,079.30 (+0.21%), above the prior day's tight $4,068.00-$4,067.60 range. In early Asia trading, oil should stay pressured near the $83 handle while gold consolidates on dollar direction.
Geopolitics — Iran pause enters a third night
The US-Iran fighting pause has now held for a third consecutive night. Trump told Axios he decided to pause strikes to give negotiations "space," saying talks are "very deep" but that Washington could resume military action quickly if diplomacy fails. US Central Command said it has redirected 17 commercial vessels, seized two ships and boarded two others to enforce compliance in the region. Netanyahu is due to meet Trump at the White House on Tuesday. The durability of the pause remains the key swing factor for oil and risk sentiment heading into the Asia session.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 07/28 11:05 | AU | RBA Gov Bullock Speaks | High |
| 07/28 22:00 | US | CB Consumer Confidence (forecast 92.1) | Medium |
| 07/29 09:30 | AU | CPI y/y (forecast 4.0%) | High |
| 07/30 02:00 | US | Fed Funds Rate (forecast 3.75%) | High |
| 07/30 19:00 | UK | Official Bank Rate (forecast 3.75%) | High |
| 07/31 10:30 | JP | BOJ Policy Rate Decision | High |