Oil Prices Plunge as U.S. and Iran Pause Military Strikes

Crude Oil Plunges as U.S. and Iran Pause Attacks

International benchmark Brent crude futures for September delivery ended down 8.7% at $88.36 a barrel as the United States and Iran paused their mutual strikes. U.S. West Texas Intermediate crude futures settled down 7.5% to $82.61 a barrel.

The sharp pullback followed a volatile period for energy markets. Earlier in the month, Brent dropped as low as $70.14 a barrel on July 2 during a brief three-week ceasefire between the Trump administration and Tehran. That temporary calm dissolved after the deal collapsed, leading to renewed U.S. strikes on Iran and subsequent Iranian targeting of U.S. bases in the Middle East and vessels crossing the Strait of Hormuz.

Despite the recent downward price movement, physical crude exports from the Middle East remain constrained. Shipping volumes through the narrow Strait of Hormuz have collapsed, and Tehran has activated Houthi allies in Yemen to target Saudi tankers transiting the Bab el-Mandeb Strait, cutting off a primary route for Saudi oil to reach Asian refineries via the Red Sea port of Yanbu.

Stock Markets Mixed as Semiconductor Shares Slide

While energy prices retreated, major U.S. stock indexes finished the session with mixed results. The Dow Jones Industrial Average rose 262.83 points, or 0.51 percent, to end at 52,210.08. The broad-market S&P 500 added just 0.02 percent to close at 7,413.18, while the Nasdaq Composite lost 0.18 percent and settled at 24,932.08.

Stock Futures Rise and Oil Prices Fall as U.S. and Iran Pause Attacks

Semiconductor stocks faced broad downward pressure, though they bounced off their session lows. The VanEck Semiconductor ETF lost more than 2 percent, extending losses from the previous week. Advanced Micro Devices and Teradyne led the sector declines with drops of 5 percent and 4 percent, respectively, while Micron Technology shed about 2 percent.

Chipmakers had initially rallied earlier in the day following a blockbuster initial public offering by Chinese chipmaker CXMT on the Shanghai Stock Exchange. However, market sentiment remained cautious.

Martin also pointed to ongoing market adjustments. Equities also came under pressure after reporting emerged that China had begun developing deep ultraviolet lithography machines used to build semiconductors, pushing U.S.-listed shares of ASML down almost 6 percent.

Broader Market Pressures and Upcoming Catalysts

Market participants are actively reshuffling investments amid signs that air is coming out of the artificial intelligence bubble, particularly with equities sitting below record highs reached in late June. Communication services and consumer staples emerged as the top-performing sectors during the session.

Investors are looking ahead to a packed calendar of economic updates and corporate earnings. A succession of quarterly reports from major technology firms—including Amazon, Apple, Meta Platforms, and Microsoft—is slated to test investor confidence regarding artificial intelligence spending, following Alphabet’s recent disappointing results.

At the same time, the Federal Reserve is scheduled to announce its latest decision on interest rates. While market consensus points toward a rate hike in September, the CME FedWatch Tool indicates that investors are also pricing in the possibility of a quarter-percentage-point lift as early as this week.