MPC Markets Morning Call — 13 July 2026: US Renews Iran Strikes; Hormuz Closed
The Pentagon launched a fourth round of strikes against Iran in a week, hitting roughly 300 targets. Tehran declared the Strait of Hormuz closed "until further notice" — Washington says it's open. Ship traffic through the strait has all but stopped.
Wall Street shrugged it off. The S&P 500 rose 0.4%, the Dow added 0.3%, and the Nasdaq gained 0.3% — all three logging a second straight week of gains. Earnings season is approaching with unusually strong forecast upgrades.
SK Hynix jumped 13%+ on its Nasdaq debut after a record-breaking $26.5 billion IPO — the largest-ever US listing by a foreign company. Meta surged nearly 6% on a bullish AI compute report.
Oil barely flinched despite the Gulf escalation: Brent slipped 0.4% to $76.01. Wheat surged 4.8% as Ukraine attacks on Russian refineries threaten Black Sea grain exports and US wheat production heads for a 56-year low.
The RBA is bracing for a rise in private credit defaults across the $250 billion sector, with 92% of bank exposure to non-bank lending sourced from overseas. ASX 200 futures point to a 43-point gain at the open.
Equities: Wall Street Logs a Second Week of Gains
Bombs dropping across the Persian Gulf and markets couldn't care less. The S&P 500 added 0.4% on Friday to close out a second consecutive winning week. The Dow rose 0.3% and the Nasdaq tacked on 0.3%. The VIX drifted lower to 21.60, down 1.2 points — not exactly panic stations.
The star of the session was SK Hynix. The Korean memory chipmaker jumped more than 13% on its first day of Nasdaq trading after raising $26.5 billion in the largest US IPO ever by a foreign company. ADRs priced at $149 each, and chairman Kwak Noh-Jung signalled more US investment beyond the $35 billion already committed. That kind of debut tends to set the tone for risk appetite, and Friday's tape reflected it.
Meta was the session's biggest heavyweight mover, surging 5.97% after SemiAnalysis published a report painting a bullish picture of the company's AI compute buildout. Nvidia rode the same wave, up 4.03%. On the other side, Netflix slid after the Wall Street Journal reported a decline in subscriber engagement — a metric the streamer would rather you not focus on. Delta reaffirmed its full-year guidance, which was enough to keep the stock steady.
Underneath the index-level calm, there's something worth watching. Tech is knocking on record highs, but more than half the S&P 500 tech sector members sit 20% or more below their 52-week highs. The mega-caps are doing the heavy lifting, and JPMorgan flagged extreme positioning in semis and memory names. That's a market with a narrow base, even if the headline numbers look comfortable.
Earnings season is right around the corner, and the setup is unusually bullish. HSBC says S&P 500 profit estimates have been revised up to 22% year-on-year growth — the strongest since the pandemic recovery. Normally analysts are cutting numbers this close to reporting season, not lifting them. That's either a sign of genuine earnings strength or a setup for disappointment if companies can't clear a higher bar.
Piper Sandler's Craig Johnson sees "improving relative strength in Industrials, Financials, Healthcare, and SMID-cap stocks," calling this a "rotational bull market rather than a narrow leadership rally." If he's right, the breadth problem in tech may matter less than it looks.
Geopolitics: Hormuz Standoff Deepens as Strikes Escalate
Four rounds of US strikes in seven days. The Pentagon hit roughly 300 targets across Iran in its latest wave, and Tehran retaliated with strikes across the Gulf — hitting facilities in Jordan, Kuwait, Qatar, Oman and Bahrain. The tempo is escalating fast.
The Strait of Hormuz is the flashpoint. Iran declared it closed "until further notice." The US flatly denied that, with Trump insisting the strait is open and CENTCOM disputing any closure. But the data tells a different story: satellite imagery on Sunday showed almost no visible commercial traffic through the waterway. Whether it's technically "closed" or just too risky for tanker captains to test, the practical effect is the same.
Diplomatic channels haven't shut down entirely. Talks are continuing through Oman, and there's been no formal severing of back-channel communication. That's the thread the market is clinging to — and it's a thin one.
The disconnect between the geopolitical reality and asset prices is stark. Oil barely moved. Equities rallied. Either the market has priced in a resolution, or it's underpricing tail risk. Those are very different bets with very different outcomes.
BMO's Carl Campus on the muted oil reaction: "Perhaps it's simply a reflection of the underlying optimism regarding ongoing talks." Translation: the market is betting diplomacy holds. If that bet is wrong, crude reprices violently.
Energy, Commodities & FX
Brent crude slipped 0.4% to $76.01. WTI fell 0.74% to $71.55. Given the scale of what's happening in the Gulf, that's a remarkably subdued move. Markets are pricing diplomacy over disruption — for now.
Wheat told a different story. Prices surged 4.8% after Ukrainian attacks on Russian refineries and tankers raised fresh concerns about Black Sea grain exports. The US wheat production forecast was cut to its smallest since 1970. That's a supply squeeze from two directions at once, and agricultural commodities don't have the same speculative cushion that oil does.
Gold was flat, down 0.1% to $4,119.93. Given the geopolitical backdrop, that's surprisingly soft — but gold has already had an enormous run this year and may just be digesting gains. Bitcoin added 0.8% to $63,798.
In FX, the yen firmed 0.4% to 161.71 after Katayama's comments on capital repatriation. The dollar index went sideways at 100.96. The Aussie dollar edged up 0.2% to US69.54 cents — not much conviction in either direction.
US 10-year yields ticked higher by 2.2 basis points to 4.561%. Australia's 10-year sits at 4.83%. No drama there.
Macro & Domestic
The RBA is worried about private credit. The $250 billion sector has grown fast with minimal transparency, and the central bank is bracing for a rise in defaults. What makes this uncomfortable is the structure: 92% of bank exposure to non-bank lending comes from overseas sources. The loans are concentrated in property. That combination — opacity, offshore funding, property concentration — is exactly the kind of thing that looks fine until it isn't.
The RBA projects default rates will "structurally increase over the rest of 2026." With $250 billion in the sector and the majority of bank exposure sourced from offshore non-bank lenders, the central bank is flagging opacity as a systemic concern — particularly given the concentration in property.
AI regulation is coming to Australia. Prime Minister Albanese is scheduled to deliver a major speech on Wednesday laying out the government's approach. Health Minister Butler has already indicated the framework will involve different regulations for different sectors rather than a one-size-fits-all model. The details will matter more than the headline, but any company with an AI strategy should be paying attention.
In tech litigation, Apple filed suit against OpenAI for trade secret theft, naming hardware chief Tang Tan in the complaint. The case will take years to play out, but it signals Apple is taking an aggressive stance on protecting its proprietary work as the AI arms race accelerates.
ASX Outlook & the Week Ahead
ASX 200 futures are pointing to a 43-point gain at the open, up 0.5% to 8814. The positive lead from Wall Street should carry through, though the Hormuz situation is a tail risk that won't show up in futures pricing until it does.
This is a packed week. Monday kicks off with consumer and business sentiment data. Tuesday brings CPI — always a market-mover. Wednesday has Fed Chair Warsh speaking and the PM's AI regulation address. Thursday delivers retail sales, BHP's operational review, and earnings from Netflix and TSMC. Wall Street calls from Friday are worth noting: Bank of America upgraded T-Mobile to Buy with a $220 target, Deutsche Bank upgraded First Solar to Buy at $272, and Evercore lifted OXY to Outperform at $65.
Monday 14 July
- 10:30am AEST — Westpac Consumer Sentiment (July)
- 11:30am AEST — NAB Business Confidence (June)
Key events later this week
- Tuesday — Australian CPI (monthly indicator)
- Wednesday — Fed Chair Warsh speaks; PM Albanese AI regulation speech
- Thursday — Australian retail sales; BHP operational review; Netflix & TSMC earnings
