Market Summary - July 15, 2026
Key Highlights
- First price decline in the US in 6 years due to June inflation.
- Core inflation at 2.6%, lower than expected, affecting Fed interest rate expectations.
- Kevin Warsh's hawkish comments influence market sentiment.
- President Trump's withdrawal from a proposed fee on cargo in the Strait of Hormuz.
- Rising oil prices amid restricted traffic in the Strait of Hormuz.
- Asian markets show positive performance, particularly in South Korea.
- IBM's disappointing earnings lead to a significant drop in share price.
- Cryptocurrencies see gains following lower US inflation readings.
US Inflation and Interest Rates
June inflation in the US surprised markets with a 0.4% monthly decline, marking the first drop since 2020. Core inflation, which excludes volatile food and energy prices, was reported at 2.6%, leading to a reassessment of the Federal Reserve's interest rate trajectory. Initially, investors anticipated two rate hikes by the end of the year, but this expectation has shifted back to a single increase, with the probability of a September hike now at approximately 68%.
Comments from Kevin Warsh
Kevin Warsh, a member of the Federal Reserve, testified before Congress, asserting that inflation is a choice and emphasizing the Fed's commitment to maintaining price stability. He stated that inflation exceeding the 2% target would not be tolerated and highlighted the strength of the US labor market, influenced by investments in AI infrastructure.
Geopolitical Developments
President Trump retracted a proposal for a 20% fee on cargo passing through the Strait of Hormuz, which was intended to fund US protection of the route. Instead, he announced that trade agreements and investments from Middle Eastern countries would replace the fee, promising significant job creation in the US.
Market Reactions
Energy Commodities
Despite geopolitical tensions, oil prices have risen, with Brent crude at approximately $85 per barrel and WTI at $80. Gas prices on the Dutch TTF exchange have also increased to $54 per MWh.
Precious Metals
Precious metals remained stable after a brief rise, with gold priced at around $4030 per troy ounce and silver at $58.4.
Equities
Asian markets are performing well, led by the Korean KOSPI, which rose by about 7%. Notable gains were seen in semiconductor companies like SK Hynix and Samsung. However, the Shanghai SE Composite lagged due to poor economic data from China.
IBM Earnings
IBM's earnings report revealed a revenue of $17.2 billion, below the expected $17.8 billion, leading to a 24% drop in share price, the largest since 1987. The CEO noted a shift in client spending towards memory, raising concerns among investors.
Macroeconomic Data
China's GDP growth fell to 4.3% year-on-year in Q2, the lowest since 2022, impacted by a property market crisis and weak domestic demand, although exports remain strong in the technology sector.
Currency and Cryptocurrency Markets
The US dollar experienced a sell-off following the inflation data, with the EUR/USD pair closing 0.3% higher. Cryptocurrencies also benefited from the positive sentiment, with Bitcoin rising over 4% and Ethereum increasing by 6.5%.