Global stock markets experienced a downturn on Monday, July 13, 2026, with major indexes falling and government bond yields increasing. This market reaction was driven by a fresh escalation of the conflict in the Middle East between US and Iranian forces, including new missile and drone attacks and Iran's renewed closure of the vital Strait of Hormuz. The renewed conflict pushed Brent crude prices up 3.8% to $78.86 a barrel and US crude up 4.11% to $74.36, from a recent trough of $70.14. The dollar also rose, and 2-year Treasury yields hit their highest since February 2025 at 4.2393%, signaling increased odds of interest rate hikes from the Federal Reserve.
Asian markets were particularly affected, with South Korea's KOSPI index plummeting 7.6% (following an 8% loss the previous week), largely due to leveraged bets on semiconductor shares unwinding. Japan's Nikkei also fell 1.9%. European stocks saw Europe's STOXX 600 down 0.12%, with tech stocks falling 1.1%. In the US, Nasdaq futures dropped 1.20%, and S&P 500 futures were down 0.40%. Concerns about the sustainability of the AI capex boom were cited as a catalyst for a "momentum wobble" in the tech sector, although analysts like Citi maintain an "Overweight" stance on global IT.
Key individual stock movements included a 15.4% plunge in SK Hynix shares in Seoul, though its US-listed shares, which debuted on Friday, fell 8.4% after a 13.1% jump. Nvidia, the largest stock on Wall Street by value due to AI euphoria, fell 3.4%, and Micron Technology sank 5.1%. Despite this, Taiwan Semiconductor Manufacturing Co. (TSMC) saw its shares rise 1% in Taiwan and is expected to report another record profit on Thursday. Analysts anticipate overall S&P 500 company earnings to grow 23.6% from a year earlier, marking the second consecutive quarter of growth exceeding 20%.
Further economic data of interest this week includes US inflation figures for June due on Tuesday, which could show some cooling but will likely be overshadowed by rising oil prices. Federal Reserve Chair Kevin Warsh is also scheduled to testify before Congress. In currency markets, the dollar index was up 0.05% at 101.13, with the euro rising 0.05% to $1.1394, and the greenback adding 0.24% on the yen to 162.12. Gold, a non-interest-bearing asset, slipped 1.5% to about $4,060 an ounce due to the rise in bond yields.
