Global markets tick up with Hormuz and inflation in focus

Global equities inched higher on Monday after Wall Street hit a record high on Friday, with markets focused on the outlook for Federal Reserve interest rates and a potential deal to reopen the Strait of Hormuz energy transit route. Europe's continent-wide Stoxx 600 index `.STOXX` rose 0.2%, while futures for the U.S. S&P 500 `ESc1` climbed 0.1% and those for the tech-focused Nasdaq firmed 0.2% `NQcv1`. U.S. stocks hit a record high on Friday after a weaker-than-expected jobs report caused traders to cut their bets on Fed rate hikes. As markets focus on inflationary pressures, Iran said on Sunday that a deal with Oman about transit through the Strait of Hormuz was in its final stages. Yet Iran reiterated that the waterway would only reopen once the United States met other conditions, including compensation and an end to sanctions and military threats. Brent `LCOc1` crude rose 2% to $85 a barrel as shipping through the strait remained at a trickle, although it remained well below late April's peak of more than $126 a barrel. Asian shares rose overnight, tracking Wall Street stocks, with Japan's Nikkei `.N225` up 2.1% while South Korea `.KS11` added 0.7%. Overall, the MSCI index of global stocks `.MIWD00000PUS` climbed 0.1% on Monday. Stock markets around the world have hit record highs in recent weeks, boosted by strong corporate earnings. Analysts at BofA said that with nearly 90% of S&P 500 results in, earnings per share were up 30% on the year after excluding investment gains at Alphabet and Amazon. A 76% EPS beat rate matched the strongest level since 2021. Strategists at JPMorgan revised up their 2026 EPS estimate to $365, marking annual growth of 35%, and lifted their S&P 500 price target to 8,000 from 7,800. It is currently at 7,758. Earnings are lighter this week, but include semiconductor company Applied Materials `AMAT.O`, networking equipment maker Cisco `CSCO.O` and cloud infrastructure technology company CoreWeave `CRWV.O`. Yields on 10-year Treasuries `US10YT=RR` rose very slightly to 4.664%, with the market bracing for $125 billion in new issuance this week. Currency markets were broadly steady, with the euro just off a seven-week top at $1.155 `EUR=EBS`. The dollar rose 0.5% against the yen to 158.68 `JPY=EBS`, though investors were still wary of intervention. Bank of Japan policymakers warned of mounting inflation risks that could require a faster-than-expected pace of interest rate increases, a summary of opinions at their July meeting showed, boosting the case for a September hike. The key event for markets this week is the U.S. inflation reading for July on Wednesday, which will impact Fed officials' thinking on rates. Economists polled by Reuters expect the consumer price index to have risen 3.4% year-on-year in data on Wednesday, compared to 3.5% the previous month. "We are keeping our view of no hikes from the Fed for this year," said Mohit Kumar, a senior European economist at Jefferies. "Key would be this week's inflation report." "If oil prices remain contained and move lower from the current levels, that would prevent the need for the Fed to hike rates," Kumar said.

Global markets tick up with Hormuz and inflation in focus

Global equities inch higher

Hormuz and oil prices in focus

Earnings, yields and currencies

US inflation data is the key event this week

Related News

Brinker International Inc <EAT.N>: UBS raises target price to $260 from $190

RTX Raytheon wins $745 million Missile Defense Agency contract for SM-3 IIA interceptors

Duke Energy dips after unveiling planned $1.75 bln equity units offering

Allstate Corp <ALL.N>: UBS raises target price to $275 from $261

LiveRamp announces special shareholder meeting on merger proposal