Equity futures mostly lower despite KOSPI rebound and heavy earnings docket - Newsquawk EU Market Open

• US and Iran exchanged strikes for the 12th consecutive night; US President Trump said Iran is getting hit so hard and that they want to make a deal.
• Yemeni Houthis targeted two Saudi oil tankers in the Red Sea, while reports noted that at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis.
• Alphabet (GOOGL) shares fell -3.3%, Tesla (TSLA) slipped over 4%, and IBM (IBM) was modestly softer post-earnings.
• APAC stocks were predominantly in the green, DXY mildly softened, 10yr UST futures lingered near the prior day's trough, and crude futures extended gains.
• European equity futures indicate a slightly lower cash market open, with Euro Stoxx 50 futures down 0.3%.
• Looking ahead, highlights include Canadian Retail Sales (May), US Initial Jobless Claims (Jul/18), Chicago Fed National Activity Index (Jun), EU Consumer Confidence Flash (Jul). Policy Announcements from the ECB, CBRT, and SARB. Comments from ECB President Lagarde. Supply from the UK & the US. Earnings from Intel, Blackstone, Lockheed Martin, RTX, TotalEnergies, Thales, SAP & Repsol.

SNAPSHOT

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IRAN CONFLICT

• US President Trump said Iran is getting hit so hard and that they want to make a deal, while he added that Iran will be ready very soon but is not ready for a deal yet.
• US President Trump posted on Truth Social an image of a headline reading, "Trump orders CENTCOM to 'open the gates of hell' after US troops killed, launches strikes on Iran", which was a headline from three days ago.
• US CENTCOM conducted a 12th consecutive night of strikes against Iran, in which US forces struck Iranian military targets including maritime capabilities, missile and drone storage facilities, surveillance sites and defence assets.
• US CENTCOM redirected nine commercial vessels and disabled one vessel as of July 22nd, while it stated that Iran does not control the Strait of Hormuz despite its claims
• US military started using B-1 long-range bombers in its strikes against Iran, according to i24's Stein, citing a source that stated the first strike using the bomber was conducted on Tuesday.
• Iranian media reported that a power station was hit by a missile near the Bushehr nuclear power plant in the south of the country, while a security official said two people were killed in a US strike on the Shalamcheh Border Crossing. Furthermore, explosions were heard in Jask, Bandar Mahshahr, Sirik and Ramshir in Iran's Ahvaz.
• Iran targeted Kuwait and US military positions in eastern Jordan.
• UKMTO said it received a report of an incident 70NM of Al-Shuqaiq, Saudi Arabia, with a tanker reported to have been struck by an unknown projectile, causing a fire on board, while Yemen's Houthis announced that they targeted two Saudi oil tankers in the Red Sea. Furthermore, a Houthi military spokesperson said retaliatory naval operations against Saudi targets would continue under a ‘siege for a siege’ policy.
• IRGC said one of three offending ships that attempted to pass the Strait of Hormuz caught fire, and the other two quickly turned back, while it declared the Strait of Hormuz closed.
• Iran's top negotiator Ghalibaf said, "The equation of this war is clear: either all or none. In a region where we do not sell oil, no one will sell oil. If our security is not ensured, no infrastructure will be safe, and the security of the Strait lies in the absence of American forces." He added Iran had repeatedly said the situation in the Strait of Hormuz would not return to its pre-war state.
• Iran's Foreign Ministry said any aggression against Iran, including its infrastructure, will compel a powerful and decisive response, with its defence doctrine clear: eye for an eye. It added that those who contribute to such aggression, whatever the kind of support, will also be considered as legitimate targets.
• Iran's Deputy Foreign Minister Gharibabadi said "European governments need to be aware that providing bases and territory to the aggressor will put them among the aggressors".
• Iran's top joint military command said if the US acts on threats, Iran will stop all Gulf oil flow and will target oil, gas, electricity and economic infrastructure in the region.
• IRGC commander warned that Iran will cut off the electricity of US regional allies if its bridges or power plants are attacked.
• IRGC spokesperson warned shipping companies that the Strait of Hormuz southern route is mined, while the IRGC Navy warned against using alternative routes in the Strait of Hormuz.
• Israeli sources said the US had informed Israel it intended to escalate attacks on Iran and, for the first time during the current conflict, carry out strikes using heavy bombers.
• Israel is weighing possible entry into the war against Iran, but only under specific conditions, such as if Iran directly attacks Israel and the US approves, i24news reports.
• Mossad’s new director met with the CIA chief on Iran, while a purpose of the visit was to coordinate with the White House on negotiations with Iran on a nuclear deal, according to a source.
• US is investigating whether Russia assisted Iranian drone attacks on CIA sites in Gulf, according to reports, citing sources.

US TRADE

EQUITIES

• US stocks were little changed to lower on Wednesday, with the Russell 2000 leading the losses while the Nasdaq also underperformed ahead of big tech earnings after the close. Equities largely traded sideways throughout the session as investors awaited earnings results from Google (GOOGL), IBM (IBM) and Tesla (TSLA). Sector performance was mixed, with Utilities, Energy and Materials outperforming, while Consumer Discretionary, Communication Services and Health Care lagged.
• SPX -0.14% at 7,499, NDX -0.54% at 28,998, DJI -0.01% at 52,224, RUT -0.92% at 2,960.
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TARIFFS/TRADE

• US President Trump's admin is reportedly divided about restricting Chinese AI models, with the White House mulling preventing Chinese labs from distilling US models, and the Commerce Department favours incentivising US companies to develop open models to counter China.

NOTABLE HEADLINES

• US President Trump said the government will face a shutdown in September, while he also called for an end to the filibuster rule, during a speech at an event in Georgia.
• Some Trump admin officials and allies privately discussed whether an external review of the 2023 failure of Silicon Valley Bank could provide a legal basis to remove Fed Governor Barr.
• US House voted 232-198 to pass the bill restricting congressional stock trading, while the House voted 216-212 to pass the defence authorisation bill that will be packaged with the SAVE America Act when sent to the Senate.

AFTER-MARKET EARNINGS

• Alphabet Inc. (GOOGL) Q2 2026 (USD): EPS 9.11 (exp. 2.88), Revenue 119.8bln (exp. 117.00bln). (-3.3%)
• Tesla Inc. (TSLA) Q2 2026 (USD): Adj. EPS 0.33 (exp. 0.52), Revenue 28.2bln (exp. 25.99bln). (-4.1%)
• IBM (IBM) Q2 2026 (USD): EPS 2.27 (exp. 2.90), Revenue 17.2bln (exp. 17.578bln). (-0.4%)

APAC TRADE

EQUITIES

• APAC stocks were predominantly in the green as semiconductor strength helped the region shrug off the lacklustre lead from Wall Street and the widening geopolitical escalation in the Middle East.
• ASX 200 was lifted amid outperformance in the commodity-related and materials sectors, while sentiment was also helped by strong jobs data.
• Nikkei 225 rallied at the open but is well off today's best levels amid higher oil prices and after hitting resistance around the 67,000 level.
• KOSPI remained driven by semiconductor advances with both Samsung Electronics and SK Hynix in the green, while chaebols dominated the list of biggest gainers and participants also digested stronger-than-expected South Korean GDP data.
• Hang Seng and Shanghai Comp were mixed, with Hong Kong led higher by strength in mining names, while the mainland was lacklustre as trade-related frictions lingered, with the US investigating Chinese AI firm Moonshot over chip access and whether the Co. used US chips for model training.
• US equity futures were indecisive with two-way price action seen following a mixed reaction to earnings results, including from Alphabet and Tesla.
• European equity futures indicate a slightly lower cash market open, with Euro Stoxx 50 futures down 0.3% after the cash market closed with gains of 0.5% on Wednesday.

FX

• DXY mildly softened against most major peers in rangebound trade following a quiet US data calendar so far this week and the absence of Fedspeak due to the blackout, keeping the Middle East conflict as the main focus. Nonetheless, it was reported that some Trump admin officials and allies had privately discussed whether an external review of the 2023 failure of Silicon Valley Bank could provide a legal basis to remove Fed's Barr.
• EUR/USD climbed higher heading into the ECB meeting later today, where the central bank is widely expected to stand pat after last month's rate hike, but could provide hawkish hints of a September move.
• GBP/USD eked slight gains but with upside capped following yesterday's choppy performance and muted reaction to the recent mixed UK inflation report.
• USD/JPY took a breather and proceeded sideways during Asia trade after whipsawing yesterday through the 163.00 level amid a source report that the BoJ is said to be open to faster rate increases.
• Antipodeans kept afloat with AUD/USD the biggest gainer following stronger-than-expected jobs data from Australia, in which headline Employment Change smashed estimates at 76.3k (exp. 15k), and the Unemployment Rate remained at 4.1%, despite higher Participation.
• PBoC set USD/CNY mid-point at 6.7906 vs exp. 6.7712 (prev. 6.7933)

FIXED INCOME

• 10yr UST futures lingered near the prior day's trough after recent bear flattening, as escalating geopolitical tensions lifted oil prices and supported expectations for more aggressive future Fed tightening.
• Bund futures were subdued after recent supply and as participants await any hawkish ECB signals.
• 10yr JGB futures retreated as higher oil prices stoked inflationary pressures, while a previous source report noted that BoJ officials were open to raising rates more frequently than every six months.

COMMODITIES

• Crude futures extended gains as the geopolitical situation continued to show no signs of abating, with the US and Iran exchanging strikes for the 12th consecutive night and with US President Trump recently threatening to bomb and destroy one bridge or power plant any time Iran targets a ship in the Strait of Hormuz. Nonetheless, the main key development overnight was the Houthis targeting two Saudi oil tankers in the Red Sea, while reports noted that at least 9 ships have stopped passing through Bab al-Mandeb, following the blockade on Saudi ports by Houthis.
• US President Trump said Venezuela is working with the US to produce oil, while he reiterated that oil companies are going into Venezuela and that they don't need the Strait of Hormuz.
• Russia is forced to import fuel from India as Ukrainian strikes damage refineries, according to FT.
• Spot gold was choppy with early pressure seen alongside a rise in oil prices.
• Copper futures recouped some of the recent losses, with trade largely driven by risk sentiment.

CRYPTO

• Bitcoin trickled lower for most of the session after slipping beneath the USD 66,000 level.

NOTABLE ASIA-PAC HEADLINES

• US is investigating Chinese AI firm Moonshot over chip access, with the BIS probing if the Co. used US chips for model training, according to The Information.
• Japanese Finance Minister Katayama reiterated a readiness to take decisive action on FX as needed.

DATA RECAP

• South Korean GDP QQ (Q2 A) 0.6% vs. Exp. 0.5% (Prev. 1.8%)
• South Korean GDP YY (Q2 A) Y/Y 3.7% vs. Exp. 3.3% (Prev. 3.8%)
• Australian Employment Change (Jun) 76.3K vs. Exp. 15K (Prev. 40.3K)
• Australian Full Time Employment Chg (Jun) 29.3K (Prev. 5.2K)
• Australian Unemployment Rate (Jun) 4.4% vs. Exp. 4.4% (Prev. 4.4%)
• Australian Participation Rate (Jun) 67.0% vs. Exp. 66.7% (Prev. 66.7%)

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian President Zelensky spoke with US President Trump's envoys Witkoff and Kushner, while they discussed ideas for resuming diplomatic efforts to end the war, according to Axios sources.
• EU diplomat said ambassadors failed to agree on the 21st package of sanctions on Russia. It was later reported that Russian gas cargoes are to remain exempt as the EU nears a new sanctions deal, while groups such as Greece's Dynagas will be allowed to continue carrying Russian LNG, according to FT.

OTHER

• US President Trump’s admin is weighing military action in Mali against the al-Qaeda-affiliated group JNIM, according to The Washington Post citing officials.
• China is conducting live fire and military drills in some areas of the Taiwan Strait on Thursday and Friday.

EU/UK

NOTABLE HEADLINES

• UK Chancellor Healey said the first priority is fiscal discipline.