Macro

US and Israeli strikes on Iran in February 2026 escalated into a shipping crisis in the Strait of Hormuz, threatening global oil supplies. A June truce memorandum aimed to facilitate talks but was undermined by tanker attacks and renewed US military action in early July.

Oil prices surged in early July 2026 despite reaching four-month lows, influenced by geopolitical tensions including Iran's leader assassination and tanker attacks. OPEC+ approved an additional quota increase of 188,000 bpd, helping to stabilize shipping through the Strait of Hormuz and mitigate price hikes.

The rocket and Starlink company priced at $135 and closed its debut around $161, reaching about $2.1 trillion in value and instantly ranking among the largest US companies. The record listing, dual-listed on Nasdaq and its new Texas exchange, headlined a booming 2026 IPO wave.

China's new regulations implementing the Mineral Resources Law took effect on June 15, 2026, establishing a comprehensive legal framework that transforms mineral governance from a resource-development to a resource-security model. Signed by Premier Li Qiang as State Council Order No. 839, the framework creates a three-layer strategic reserve system—physical stockpiles, production-capacity reserves, and in-ground strategic areas—giving Beijing unprecedented control over critical minerals like rare earths, gallium, and germanium. The Ministry of Natural Resources (MNR) described the regulations as a systematic safeguard for mineral resources, refining a reserve system built around 'products, capacity and origin' and introducing provisions on import-export management and countermeasures against threats to supply chain stability. Article 76 authorizes countermeasures against nations restricting China's mineral supply chains, while Article 59 permits direct government mobilization of mining, processing, and distribution during emergencies. The framework, overseen by agencies including the NDRC and MIIT, institutionalizes China's dominance over global critical mineral processing, estimated at 85–90% of rare earth capacity. The MNR announced plans to advance the 15th Five-Year Plan (2026-30) for mineral resources, boost domestic exploration and output of strategic minerals, and designate several strategic mineral reserve zones. The regulations support the revised Mineral Resources Law, amended on November 8, 2024, and effective July 1, 2025—the first major revision since 1986. During the 14th Five-Year Plan (2021-25), China discovered 398 new medium-sized and large strategic mineral deposits and oil and gas fields, with historic breakthroughs in copper, gold, potash, lithium, helium, and high-purity quartz. Experts emphasized the framework aims to improve governance and regulatory transparency, not tighten controls, providing long-term certainty for mining investment.

The United States plans to build up to 250 new nuclear reactors over coming decades to meet surging electricity demand from AI, data centers, and manufacturing. The push revives nuclear power as a low-carbon alternative, focusing on advanced reactors and small modular reactors with passive safety systems. Federal programs like the DOE's Launch Pad support development, with companies such as TerraPower, Kairos Power, and X-energy building demonstration reactors backed by the Advanced Reactor Demonstration Program. Tech giants Google and Meta have signed power purchase agreements. Critics cite unresolved safety, cost, and waste challenges, while experts stress the need for extensive testing and regulatory review of new designs.

On June 11, 2026, China enacted its most comprehensive technology transfer controls in a decade, granting the government explicit legal authority to retaliate against nations that restrict Chinese technology investments. The regulations extend controls over overseas transfer of Chinese-developed technology—covering software, algorithms, and manufacturing processes—and codify a retaliation clause with no direct precedent in Chinese law. This allows Beijing to impose counter-restrictions based on domestic legislation rather than ad hoc decisions. The cleantech manufacturing sector is specifically named, reflecting tensions over EU tariffs on Chinese electric vehicles, solar panels, and batteries. The rules complete a three-part legislative package on inbound investment, algorithmic assets, and outbound technology transfer, structurally lowering the threshold for escalation in tech decoupling disputes with the US, EU, and Japan.

Beijing's export restrictions on critical minerals like gallium, germanium, and antimony are forcing Japan's industrial rebirth, not crippling it. The consensus view that Japan is a passive victim is wrong; these curbs are catalyzing a state-subsidized operational revival. Japan's Mitsubishi Chemical and Sumitomo Chemical hold patents for advanced purification, and higher prices make domestic processing profitable. Japan can retaliate by cutting off specialized chemicals and components vital to China's chip factories. Past experience with rare earth curbs in 2010 shows Japan adapts: Sojitz partnered with Lynas, Toshiba and Honda eliminated heavy rare earths, and METI established stockpiles, reducing China's rare earth import share from over 90% to under 60%. Now, trillions of yen in subsidies are fueling domestic semiconductor ventures like Rapidus, turning geopolitical risk into a financial golden age for firms like Sony and Denso.

A ceasefire between the U.S. and Iran in late June briefly allowed the International Maritime Organization to begin evacuating trapped ships and over 11,000 seafarers from the Strait of Hormuz, which Iran had effectively closed since late February after U.S. and Israeli attacks. The operation routed vessels along Oman's southern coastline, but halted days later when the Singapore-flagged Ever Lovely was attacked; no one claimed responsibility, but Iran's Revolutionary Guard criticized the evacuation as lacking Iranian involvement. Iran continues to assert control over the strait, demanding ships coordinate and obtain clearance, setting a dangerous precedent for other global waterways like the Strait of Gibraltar or Malacca. The strait normally carries about 20 million barrels of oil daily—20% of global consumption—and its closure has driven oil prices up, with Brent crude at $76 and WTI above $71, threatening inflation, corporate profits, and consumer spending. International maritime law, including the U.N. Convention on the Law of the Sea, offers little recourse as neither Iran nor the U.S. have ratified it, and President Trump's suggestion that the U.S. could control the strait and collect tolls further undermined confidence in the independence of international waterways.

China escalated rare earth and critical mineral export controls twice in five weeks during summer 2026, targeting 10 U.S. companies on June 22 and 14 EU firms on July 24. The International Energy Agency warned on July 16 that full enforcement could jeopardize $6.5 trillion in downstream production globally. While rare earths like neodymium and dysprosium are used in magnets for hard drives and cooling fans, and gallium and germanium are critical for compound semiconductors and wafer polishing, the controls primarily threaten hardware supply chains rather than directly impacting GPU prices yet. This marks a return to escalation after a November 2025 truce, widening restrictions beyond gallium and germanium to broader rare earths and EU targets.

South Korea's KOSPI has now fallen for three consecutive sessions, losing about $2.18 trillion in market value and putting the index on track for its steepest monthly drop on record. The benchmark plunged as much as 12.6% intraday on Tuesday before closing down 6%, extending Monday's near-11% rout and erasing almost 40% of its value from a peak reached just over a month ago. The cumulative decline from the June 19 all-time high of 9,385.59 now exceeds 3,722 points in six weeks, wiping out approximately ₩2.5 quadrillion and dropping the KOSPI from the world's sixth-largest stock market to 11th place. Under parliamentary pressure, Finance Minister Koo Yun-cheol apologized for the introduction of single-stock leveraged ETFs, saying they had not been considered carefully enough. After an emergency meeting late Wednesday with the Bank of Korea governor and financial regulators, the Ministry of Finance announced immediate further curbs on single-stock leveraged products, including individual investment limits (capped at up to 20% of an investor's total investment amount), higher trading costs, simulated trading requirements, and preparation of a legal basis for emergency market-stabilization steps. The Blue House, with President Lee Jae-myung in Brazil, has refused a bailout, characterizing the crash as a 'reassessment process' and citing external triggers including Chinese memory chip expansion and AI investment doubts, along with structural factors: excessive retail trading, derivative proliferation, and heavy concentration in Samsung Electronics and SK Hynix. Retail investors have erupted in fury, accusing the government of encouraging market entry with 'KOSPI 5000' or '9000' targets and now deflecting blame. Despite the tumble, the KOSPI is up 41.5% in US dollar terms year-to-date, making it the best-performing major market this year. The crash remains less severe than the 57% drop during the 2008 financial crisis, which unfolded over roughly a year.

Treasury Secretary Scott Bessent faces a $40 trillion refinancing challenge as the 10-year Treasury yield hit 4.705%, its highest since a brief spike in January 2025 and levels not seen since before the 2007 financial crisis. The 30-year yield reached 5.182%, driven by Brent crude topping $100 a barrel and jobless claims falling to 187,000, well below expectations. About half of Federal Reserve officials now anticipate a rate hike this year. Total federal debt stood at $39.065 trillion as of January 1, 2026, with much of it issued when 10-year yields were under 2%. As that debt matures, refinancing at current rates raises carrying costs, while the Fed's funds rate remains at 3.75% and core PCE inflation hit a 12-month high.

Oil surged to $100 per barrel, its highest since May, after Iran-backed Houthi rebels attacked two Saudi oil tankers in the Red Sea and threatened to blockade the Bab el-Mandeb Strait, escalating Middle East conflict. The House approved a non-binding resolution to remove U.S. forces from the Iran war, while a Senate version failed. Separately, the Trump administration imposed new tariffs on 59 countries and the EU, with rates of 10% and 12.5%, covering over 99% of U.S. imports, citing forced labor concerns. The tariffs took effect as a previous global tariff expired. In Madison, Wisconsin, a vigil was held for Corey Ruiz, a 38-year-old man shot and killed by police after allegedly producing a knife; four officers were placed on leave.

The US-China trade war has escalated beyond tariffs into targeted restrictions on semiconductors, drones, and critical minerals like gallium and germanium, weaponizing supply chain dependencies. China dominates rare mineral refining, while the US controls advanced chip fabrication, creating a strategic standoff. These measures aim to starve rival sectors and accelerate domestic production, but decoupling is costly and slow, forcing corporations to duplicate supply chains. The conflict reflects a deeper technological arms race, pushing global tech toward parallel, incompatible systems with no compromise in sight.

Chinese President Xi Jinping warned in April that the international order is 'crumbling into disarray,' criticizing a U.S. naval blockade of the Strait of Hormuz as 'dangerous and irresponsible' for threatening a key oil route. His comments came amid ongoing Iran conflict impacts on global markets, despite a fragile ceasefire. Xi's warning also addressed rising U.S. tariffs and protectionism, adding uncertainty to the world economy. Oil prices have fluctuated wildly, from nearly $113 to $68 per barrel. While China's exports grew 27% in July, driven by AI demand and U.S. holiday purchasing, its Q2 GDP saw the slowest growth in three years, raising concerns about dependency on global demand. Xi's remarks signal potential fragmentation of market systems as U.S.-China tensions persist over trade, tariffs, and security.

Indian stock markets crashed on Monday, with the Sensex tumbling 2,345 points and the Nifty 50 plunging 704 points below 24,000, as escalating US-Iran war fears drove crude oil to a 52-week high above $110 a barrel. The Indian rupee hit a record low of 92.3350 against the dollar, falling 0.6%, amid a broader sell-off across Asian currencies. The conflict, now in its second week following US-Israeli air strikes on Iran, has severely restricted shipping through the Strait of Hormuz. Over the weekend, Iranian drone strikes hit Saudi Arabia, Kuwait, and the UAE, heightening supply concerns. Global markets also slumped, with Dow futures sliding nearly 1,000 points and Asian indices dropping up to 8%.

US stocks dipped Tuesday after Iran kept the Strait of Hormuz closed, pushing Brent crude above $88 per barrel and pressuring markets. The S&P 500 fell 0.3%, led by tech shares, while energy stocks gained. Choppy trading preceded key US consumer price data due Wednesday, which could influence Federal Reserve rate hike odds—now near 50% amid rising oil prices. Analysts were split on inflation outlook, with some expecting cooling core CPI and others warning of sticky services costs. Small business optimism hit a one-year high, but existing home sales fell to a three-month low. Bears outnumbered bulls for the 20th time in 25 weeks.

The U.S. stock market faces severe risks in 2025, with the S&P 500 in negative territory after President Trump’s April 2 announcement of high reciprocal tariffs on major trading partners and a 10% across-the-board levy. Markets tumbled 3.5% to 5% on April 3. Analysts cite slowing economic indicators, rising consumer debt, and low consumer confidence, warning of a potential recession by Q3 or Q4. The Federal Reserve may cut rates by 50 basis points in the second half of 2025, but persistent inflation at 2.8% could delay action. A $1.9 trillion federal deficit, geopolitical uncertainty, and risks like a government shutdown or Fed chair conflict heighten volatility. Experts predict a 15% market correction or worse, urging caution for near-retirement investors.