MPC Morning Call — 7th August 2026: Hormuz Setback Rattles Markets as Oil Spikes and Memory Stocks Stumble

7 August 2026

Wall Street pulled back from record highs on Thursday as an Iranian plan to bar U.S. vessels from the Strait of Hormuz sent oil prices surging and reignited inflation fears ahead of Friday’s closely watched jobs report. The S&P 500 shed 0.2% while the Dow dropped 0.9%, with Treasury yields climbing on hawkish Fed expectations. Memory chipmakers Sandisk and Western Digital tumbled despite beating earnings estimates, dragging Asian chip stocks lower. ASX 200 futures point to a modestly lower open.

Equities: Record Run Pauses as Memory Sell-Off and Rising Yields Bite

Wall Street retreated on Thursday after a stellar start to August that had seen the S&P 500 gain more than 5% and technology stocks rally nearly 11%. The benchmark index shed 0.2% to close at 7,710.08, the Dow Jones Industrial Average slid 0.9% to 53,885.16, and the Nasdaq Composite edged down 0.1% to 26,348.35. Eight of eleven S&P 500 sectors finished lower, led by industrials, materials and real estate, each down 0.8%. Energy was the lone bright spot, rallying 1.6% on the oil spike.

The session’s biggest drag came from the memory storage sector. Sandisk tumbled 13.3% to $1,178 and Western Digital plunged 19.1% to $420 — its steepest one-day decline since April 2025 — after both companies delivered quarterly beats but issued revenue guidance that fell short of sky-high expectations. Sandisk has soared more than fivefold this year and WDC has more than tripled, vastly outpacing the Philadelphia Semiconductor Index’s near-70% gain. The weakness bled into Asian trade, with Samsung Electronics and SK Hynix tumbling and dragging South Korea’s KOSPI down more than 4%.

“After a surge that saw the S&P 500 gain more than 5% and technology stocks rise nearly 11%, a pause is both normal and healthy,” Keith Lerner, chief investment officer at Truist, told Investing.com. “More importantly, the broader message remains constructive. With the S&P 500, the equal-weight S&P 500, and small-cap stocks all reaching fresh record highs this week, market leadership continues to broaden.”

The after-hours session told a different story. Atlassian surged 23% after posting adjusted EPS of $1.87 versus the $1.50 consensus on revenue of $1.77 billion — a 28% year-on-year increase. Cloud revenue grew 31% YoY. Cloudflare jumped 16% on a beat-and-raise, lifting full-year 2026 revenue guidance to $2.864–$2.870 billion. On the downside, The Trade Desk plummeted 23% after missing Q2 revenue expectations with $715 million versus the $752.61 million consensus.

Stock	After-Hours Move	Key Figure
Atlassian (TEAM)	+23%	Adj EPS $1.87 vs $1.50 consensus; Rev $1.77B (+28% YoY)
Cloudflare (NET)	+16%	EPS $0.29; Rev $696M; raised FY26 guidance to $2.864-$2.87B
Twilio (TWLO)	+16%	EPS $1.47; Rev $1.5B; strong Q3 guide
Airbnb (ABNB)	+9%	EPS $1.37; Rev $3.61B; raised annual forecast
The Trade Desk (TTD)	-23%	Rev $715M miss vs $752.6M; weak Q3 guide $650M vs $804M
Sandisk (SNDK)	-13.3%	Beat on earnings but guidance missed elevated expectations
Western Digital (WDC)	-19.1%	Steepest one-day decline since April 2025

Geopolitics: Hormuz Standoff Deepens as Houthis Escalate in Yemen

The proposed Iran–Oman deal to reopen the Strait of Hormuz hit a major snag on Thursday when Fars News reported that the framework would prohibit passage of U.S., Israeli and other “hostile” vessels until compensation was paid. The text is under review in Iran’s parliament. According to the plan, entry into the strait would be through a northern corridor near the Iranian coast, exit via a southern corridor near Oman, and eventually all transit would be funnelled through a central corridor managed by Iran. A U.S. official responded that any temporary routes through the strait “won’t be subject to approvals, permissions, tolls or charges.”

Separately, Fars reported that Iranian naval forces had struck “hostile targets” at the entrance to the strait. “Markets have seen plenty of false dawns throughout this conflict, and while the detail is becoming more concrete, attention is now shifting from whether an agreement can be reached to what the final arrangements will look like,” Deutsche Bank’s Jim Reid said.

The Iran-backed Houthi militia conducted drone and missile attacks in northern and eastern Yemen, claiming to have killed and injured “hundreds” of troops from Yemen’s Saudi-backed government. The AP reported at least 30 killed. This marks one of the most serious escalations since the 2022 ceasefire and raises fears the U.S.–Iran conflict may erupt across the broader region.

On the U.S.–China front, Beijing unveiled a sweeping retaliation package targeting seven American entities with sanctions, launching the first national security investigation under its revised Foreign Trade Law, tightening drone export controls, and suspending cooperation with the U.S. on factory inspections. China’s cybersecurity authorities also opened a security review of Palo Alto Networks.

Energy, Commodities & FX: Oil Spikes on Hormuz Headlines While Gold Stirs

Oil prices surged on Thursday after the Hormuz deal headlines and reports of Iranian strikes. Brent crude futures jumped 4.5% to $83.04 a barrel, hitting a session high of $83.47. West Texas Intermediate rose 3.3% to $77.73. Both benchmarks remained on track for steep weekly losses despite Thursday’s rebound. The EIA reported U.S. crude inventories unexpectedly rose by 2.5 million barrels against expectations for a 1.5 million barrel drawdown.

Gold had its best day in six months on Wednesday, hitting a seven-week high around $4,250 per ounce as hopes for an eventual Iran deal eased pressure on the Fed to hike rates. Gold remains down roughly 20% since the Gulf conflict erupted in late February. The Bloomberg Dollar Spot Index rose 0.2%, with the yen weakening 0.4% to 158.42 per dollar — giving back nearly half of last week’s historic intervention gains. Bitcoin fell 0.5% to $64,476.

In the rates market, the U.S. 10-year yield advanced 5 basis points to 4.66%, Germany’s 10-year rose 3bp to 3.14%, and Britain’s 10-year climbed 5bp to 4.94%. The U.S. labour share of economic output sank to a new record low of 52.9%, highlighting the widening gap between corporate profits and worker compensation.

ASX Outlook & Day Ahead

The S&P/ASX 200 closed at a record high for a second consecutive day on Thursday, climbing 43.8 points or 0.5% to finish at 9,271.6. Mining stocks rallied (+1.1%) as copper reset its record and gold extended its best gain in six months. BHP added 0.5% to $62.80, Fortescue rose 1.4% to $18.50, and Newmont rallied 3%. AMP surged 6% after reporting a 57% jump in half-year profit and a $150 million share buyback.

ASX 200 futures were down 11 points or 0.1% to 9,183 near 6:45am AEST. Key events to watch:

• ASX earnings: Atlassian and Nick Scali reporting Friday
• Japan household spending (June)
• Taiwan trade data (July) — semiconductor demand barometer
• Germany industrial production (June)
• U.S. non-farm payrolls July (10:30pm AEST) — consensus +80K after June’s +57K
• U.S. Richmond Fed President Thomas Barkin speaks