Markets Edge Lower as US‑Iran Tensions Spike and Oil Prices Surge

The S&P 500 fell 0.79%, the Dow lost 1.44%, and the Nasdaq‑100 slipped 0.61% as US‑Iran tensions escalated after President Trump declared the cease‑fire over and the United States launched strikes against Iran. Earlier gains in chipmakers and AI‑infrastructure names limited the broader market decline, though risk‑off sentiment drove a sell‑off.

Crude oil advanced more than 7%, pushing WTI to a two‑week high, while the 10‑year Treasury yield rose to 4.59% on heightened inflation expectations. President Trump also signaled further possible strikes and a potential blockade of Iranian ports. The 10‑year T‑note yield later reached a 1.5‑month high of 4.585%.

US MBA mortgage applications slipped 2.2% for the week ended July 3, and the 30‑year fixed rate edged up to 6.58%. Meanwhile, analysts expect Q2 earnings to surge about 23%, with AI infrastructure stocks contributing roughly 60% of the S&P 500’s EPS growth.

Interest Rates

On the day, September 10‑year T‑notes fell 14 ticks, pushing the yield to 4.585%—a 1.5‑month peak. A 7% jump in WTI crude lifted inflation expectations, sending the 10‑year breakeven rate to 2.277%. A $39 bn Treasury auction of 10‑year notes later today added supply pressure.

German bund yields rose to 3.083%, a 3.5‑week high, while UK gilt yields jumped to 4.961%, a 1.5‑month peak.

ECB Governing Council member Joachim Nagel said another rate hike could not be ruled out because of the Iran shock. Swaps price a 17% chance of a 25‑bp ECB hike at the July 23 meeting.

US Stock Movers

Homebuilders and Suppliers
Builders Firstsource (BLDR) fell over 6%, DHI and PHM slipped more than 4%, HD, LEN, TOL declined over 3% and KBH fell about 2% on higher Treasury yields.

Airline and Cruise Operators
American Airlines (AAL) and Alaska Air (ALK) lost over 5%, Carnival (CCL) dropped over 4%, and Delta (DAL), Norwegian (NCLH), and United (UAL) fell more than 3% as fuel costs rose.

Software Names
Palantir (PLTR), Intuit (INTU), and Workday (WDAY) declined over 4%; Atlassian (TEAM) and ServiceNow (NOW) slipped over 3%; Oracle (ORCL), Thomson Reuters (TRI), Autodesk (ADSK), and Salesforce (CRM) were down over 2%, while Adobe (ADBE) and Microsoft (MSFT) edged lower.

Energy Producers and Service Providers
Occidental (OXY) and Valero (VLO) gained more than 5%, Baker Hughes (BKR), Marathon (MPC), and Phillips 66 (PSX) rose over 4%, APA and Diamondback (FANG) up over 3%, ConocoPhillips (COP), Chevron (CVX), Devon (DVN), and Halliburton (HAL) up over 2%, and SLB up over 1%.

Chipmakers and AI Infrastructure
The iShares Semiconductor ETF (SOXX) rose near 1%. Broadcom (AVGO) gained over 4%, SanDisk (SNDK) and Texas Instruments (TXN) climbed over 2%, and Western Digital (WDC), NXP (NXPI), Analog Devices (ADI), and Lam Research (LRCX) advanced over 1%.

Lemonade (LMND) fell over 9% after Morgan Stanley downgraded it to equal weight. Navitas Semiconductor (NVTS) slipped over 8% following a patent infringement lawsuit. OLLI’s Bargain Outlet (OLLI) dropped over 7% after JPMorgan downgraded it to neutral. Bath & Body Works (BBWI) lost over 6% after Goldman Sachs cut the stock to sell. PayPal (PYPL) fell over 3% after Barclays initiated coverage underweight.

Positive moves included Beazer Homes (BZH) surging 14% on an all‑cash acquisition proposal, Dollar Tree (DLTR) up over 1% after a Raymond James upgrade, and Dell (DELL) edging higher after an Evercore price‑target increase.

Earnings Reports (7/8/2026)

AZZ Inc (AZZ), Helen of Troy Ltd (HELE), Hub Group Inc (HUBG), PriceSmart Inc (PSMT), Pure Cycle Corp (PCYO), Toyo Co Ltd (TOYO)

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