Morning Wrap: ASX 200 to fall, Wall Street lower as Trump reinstates Hormuz blockade, Oil prices jump

In a nutshell:

• Major US benchmarks broadly lower as a renewed US-Iran conflict and a semiconductor selloff drove a risk-off session

• KOSPI tumbled 8.9%, its third largest one-day decline since Lehman  as giants Samsung and SK Hynix both tumbled more than 10%

• Oil jumped to one-month highs after Trump reinstated the Strait of Hormuz blockade and floated a 20% toll on all cargo

• Yields are now trading back at uncomfortable levels, gold and silver prices tumbled 2-3% overnight, and mining stocks are tumbling towards year-to-date lows

Let's dive in.

• Major US benchmarks lower and near worst levels after Trump's Hormuz blockade post deepened US-Iran nerves 

• Semiconductors led the decline and dragged the Nasdaq lower, as investors rotated out of AI-linked memory names for a second straight session

• Breadth was surprisingly even, with the Equal-weight S&P 500 (-0.03%) outperforming the cap-weighted index by 76 bps as Energy stocks rallied, while classic defensives like Utilities, Financials, Staples and Real Estate outperformed

• Microsoft (+1.5%), Amazon (+0.8%) and Apple (+0.6%) held up, offset by sharp declines for Intel (-6.1%), Micron (-4.3%), AMD (-4.2%), SpaceX (-4.2%) and Nvidia (-3.5%)

• Asian chips slumped earlier, the Kospi triggered a circuit breaker with SK Hynix tumbled 15.3% and Samsung down 10.7%

• Brent surged to US$83.1 a barrel, the highest since 16-Jun and trading ~16% above pre-war levels

• Yields soared on the oil rally, with the 2-year at a fresh 17-month high of 4.28% and the 10-year pushing 4.6%

• Morgan Stanley's Wilson sees broad US earnings strength to extend the rally beyond mega-cap tech (BBG)

• Trump declared the US the "Guardian of the Hormuz Strait", said the waterway would stay open with or without Iran, however plans to impose a 20% reimbursement rate on all cargo shipped for providing safety and security

• Trump reimposes naval blockade on Iran and will prevent any ships from leaving or entering Iranian ports (AX)

• US Central Command launched fresh weekend strikes on Iran, hitting more than 140 targets Saturday and dozens more Sunday, using one-way attack sea drones for the first time (CNBC)

• Iran retaliated with missile and drone strikes on US bases in Kuwait, Bahrain, Jordan, Oman and Qatar, with Kuwait reporting a hit offshore drilling platform (CNBC)

• Transits through Hormuz fell 52% week-on-week, deepening doubts over the interim peace deal the two sides signed on June 17 (YF)

• Flows through Strait of Hormuz have now fallen to two-month low, according to shipping data (RT)

• Dubai is planning a new east coast port in Fujairah to bypass the Strait of Hormuz (TI)

• TSMC Q2 revenue up 36% year-on-year to record high on surging AI chip demand (BBG)

• Stellantis says preliminary Q2 vehicle sales rose 10% year-on-year, driven by strong North America growth (RT)

• Citi lifted its Apple price target to $365 from $315, retained Buy rating, citing continued market-share gains, ahead of Jul-30 results (CNBC)

• SK Hynix US-listed shares fell 9% after the memory maker soared 13% in its Nasdaq debut on Friday (YF)

• Bank stocks eased before Q2 results, with JPMorgan, Goldman Sachs, Wells Fargo, Citigroup and Bank of America reporting Wednesday and Morgan Stanley on Thursday (CNBC)

• Volkswagen CEO says company may need to cut about ~50,000 jobs to match competitiveness of rivals (GD)

• Fed Chair Kevin Warsh delivers his first semi-annual testimony to the House Financial Services Committee tonight, analysts see Warsh unlikely to offer much new, in-line with his strategy to avoid telegraphing Fed policy outside of meetings

• Fed Governor Waller warns Fed will need to consider rate hikes soon if CPI comes in hot (FT)

• ECB rate hike likely "one-and-done," contingent on falling energy costs and limited conflict spillover (FT)

• China's June imports seen rising 24% year-on-year, slowing from 27.4%, with demand driven mainly by semiconductors and tech components, a Reuters poll showed (RT)

• China's expected Q2 slowdown from weak domestic raises expectation for additional stimulus (RT)

• Australia's July consumer sentiment and NAB business survey are due Tuesday, with June sentiment stuck near 50-year lows at 80.6 amid cost-of-living strain (TE)

• US June CPI is due tonight, with consensus for a 0.2% fall month-on-month and a 3.8% rise year-on-year, the first negative monthly headline print in over a year (CNBC)

• Arafura Rare Earths holder Hancock Prospecting lifts stake to 17.5% from 15.6% (ARU)

• KKR said to have joined Amwins and Dragoneer's consortium in the bid for Steadfast Group (The Aus)

• Light & Wonder reiterates FY26 outlook of mid-to-high single-digit consolidated AEBITDA growth and remains committed to deleveraging net debt to below 3.0x during H1 CY27. Has ~$180m left under its buyback after repurchasing 1.6m CDIs in Q2 for ~$134m (LNW)

• Commodity selloff: A classic oil up, everything else (copper, platinum, gold, silver etc.) down. Our overnight ETF watchlist showed heavy selling across most commodity-related names, with the Global X Uranium ETF (-5.2%) closing at the lowest since 5-Sep-25 and now down 6% YTD, VanEck Rare Earth/Strategic Metals (-4.3%) now slightly positive for the year and trading at the lowest since 2-Jan-26 and VanEck Gold Miners (-2.8%) down 15.7% YTD and at the lowest since 21-Nov-25. The commodity complex continues to struggle against classic macro drivers, a higher US dollar and renewed yield/rate hike expectations.

• Energy stocks: S&P 500 Energy sector up 3.0% overnight and now up 7.4% since the 1-Jul low. Energy stocks will always be reluctant to price in these geopolitically driven catalysts (I mean, this escalation could all be over in 24 hours who knows). Nevertheless, the recent spike in oil prices will continue to buoy the energy complex, including coal (NHC, WHC, YAL etc.) and refiners (ALD and VEA).

• Elevra Lithium initiated Buy with $12.00 target (UBS)

• ResMed downgraded to Neutral from Buy; target cut to $235 from $270 (Citi)

• Rural Funds Group upgraded to Buy from Neutral; target up to $2.32 from $2.10 (UBS)

Stocks trading ex-dividend: 

• Tue 14 Jul: Metcash (MTS) – $0.095, Whitefield Income (WHI) – $0.006

• Wed 15 Jul: None

• Thu 16 Jul: None

• Fri 17 Jul: Wam Income Maximiser (WMX) – $0.006

Other ASX corporate actions today:       

• Dividends paid: None

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 10:30 am: Westpac Consumer Confidence

• 11:30 am: NAB Business Confidence

• 1:00 pm: China Balance of Trade

• 10:30 pm: US CPI

• 12:00 pm: US Fed Chair Warsh Testimony