Morning Wrap: AI Companies and Gold Back in Favour? (22.07.2026)
Market Overview
On July 21, 2026, significant gains were observed in the US and European markets, with the Nasdaq 100 index rising by 1.9% and the Euro Stoxx 50 increasing by 0.9%. This upward trend occurred amidst escalating tensions between the USA and Iran, which pushed Brent crude oil prices above $92 per barrel.
AI Sector Performance
Companies in the AI sector regained investor interest, contributing to the market's strength. Notable performers included Nebius, Sandisk, Micron, Teradyne, and Seagate, all of which saw gains exceeding 10%.
Asian Market Dynamics
The Korean KOSPI index also experienced a 2% increase, buoyed by strong performances from Samsung (+2.8%) and SK Hynix (+2.4%). In contrast, the Chinese Hang Seng index fell by 1%, with significant losses from major companies like Tencent (-6.2%) and Geely (-4%).
Geopolitical Tensions
The ongoing conflict between the USA and Iran has intensified, with US forces conducting night attacks on Iranian targets for the 11th consecutive night. This escalation followed the deaths of three American soldiers due to Iranian attacks, prompting President Trump to threaten further military action.
Despite the violence, there are indications that both sides may be open to negotiations, with mediators from Qatar, Egypt, and Pakistan proposing a 10-day ceasefire.
Energy Commodities
As a result of the conflict, energy commodity prices have surged, with Brent crude oil reaching approximately $92 per barrel and WTI at $85, marking increases of 8% and 6% respectively over the past week. Natural gas prices on the Dutch TTF exchange also rose by 11% to $60 per MWh.
Precious Metals
In the face of rising geopolitical tensions, precious metals have seen price increases, with gold priced at $4135 per troy ounce (+1.4%) and silver at $59.8 (+1.7%). This trend reflects a risk-off sentiment among investors.
Macroeconomic Insights
Hungary
The Hungarian National Bank has implemented its second interest rate cut since the onset of the Iran conflict, driven by a drop in inflation to 1.7%. This cut leaves room for further easing, especially if wage growth remains robust.
United Kingdom
UK inflation data for June showed a decline to 2.6%, primarily due to lower fuel prices. However, core inflation remained unchanged, leading investors to anticipate potential interest rate hikes by the Bank of England.
Currency Movements
With rising global tensions and increasing oil prices, the US dollar and commodity currencies have strengthened. The Norwegian krone and Australian dollar are among the top performers. The Japanese yen has weakened, reaching a near 40-year low against the dollar, largely due to the carry trade strategy.
Cryptocurrency Market
The cryptocurrency market has also shown signs of decline, with Bitcoin dropping by 0.8% to below $66,000 and Ethereum falling by 0.2% to $1920.