Overnight Recap

1. U.S. strikes Iran for 11th straight night; Rubio says Tehran "not serious" on talks. Secretary of State Marco Rubio told the ASEAN Foreign Ministers' meeting in Manila on Wednesday that Iran is not honoring the Strait of Hormuz deal, warning that Tehran's demand to control the waterway would set "a very dangerous precedent" for global freedom of navigation. Centcom targeted military operations centers, drone storage facilities, and logistics infrastructure overnight. Rubio reiterated Washington is "committed to diplomacy" but will "do what is necessary." Source: CNBC, 03:26 ET.

2. Oil surges above $92 Brent, $88 WTI — five-week highs. Brent crude rose 3.7% to $94.43 and WTI jumped 4% to $87.67 Wednesday morning in response to the strikes and Rubio's comments. Deutsche Bank's Jim Reid noted Brent closed above $90/bbl for the first time in over a month, "reviving fears about a wider stagflationary shock." Adding to the pressure: three Saudi oil tankers U-turned in the Red Sea after Yemen's Houthis declared a blockade on Saudi crude through the Bab el-Mandeb Strait. API reported U.S. crude inventories built last week; EIA data due today. Sources: CNBC, Oilprice.com, 03:00–06:00 ET.

3. Rate-hike bets creep back up. The probability of a July Fed hike rose to 26% by Tuesday's close, the highest since the June CPI downside surprise (which had pushed it to 10%). Money markets now price a 24.1% chance of a July hike and a 69% chance of at least a quarter-point move by September (CME FedWatch). The 10-year Treasury yield is flat at 4.626%, the 2-year eased 1 bp to 4.251%. Source: CNBC, 06:00 ET.

4. New U.S. tariffs on Brazil take effect; Trump readies broader trade actions. A 25% tariff on Brazilian imports went into effect Wednesday. Separately, Trump appears ready to replace expiring 10% global tariffs with permanent duties, including a potential 100% levy on generic drug imports. Sources: AFP, MarketWatch, 01:00–06:00 ET.

5. Zelenskyy ousts Ukraine's army chief. Ukrainian President Volodymyr Zelenskyy dismissed the country's top military commander as protests in Kyiv exposed a wartime power struggle. The shake-up comes amid continued Russian pressure on the eastern front. Source: CNBC, 02:00 ET.

Previous Session Context

• Tuesday, July 21 close: S&P 500 +0.89% to 7,509.20, Nasdaq +1.29% to 25,837.21, Dow +0.74% to 52,224.64. The rally was led by a sharp bounce in semiconductor stocks. Published 16:00–18:00 ET.

• Chip stocks roared back: Micron (+12.2%), Sandisk (+14.4%), SK Hynix (+13.8%), Western Digital (+12.5%), and Seagate (+11.1%) surged Tuesday as investors reframed China's open-source Kimi K3 AI model — initially seen as a threat to hardware demand — as a potential catalyst. Bank of America's Vivek Arya said Chinese open-source releases support a "bullish thesis on memory." The PHLX Semiconductor index rallied 5.2% after entering a bear market last week. Source: MarketWatch, 16:12 ET.

Global Equity Movers

Asia overnight:

• Nikkei 225: -0.18% to 66,115.60 — flat as surging oil prices pushed Japan's import bill to an unprecedented high, offsetting modest exporter strength.
• Hang Seng: -0.95% to 24,892.66 — dragged by tech names and tariff concerns.
• Shanghai Composite: +0.07% to 3,867.03 — effectively flat.
• FTSE 100: +1.24% to 10,717.62 — energy-heavy index lifted by oil's surge.
• DAX: +0.85% to 25,224.63.

U.S. pre-market movers:

• Super Micro (SMCI): +20.5% — Q4 preliminary results showed gross margins doubling to 15–17% (from 8.2–8.4% guidance), record $60B backlog. Source: MarketWatch, 20:33 ET.
• Nvidia (NVDA): ~+2% pre-market — touted Vera Rubin AI platform performance ahead of AMD's Advancing AI event. Source: Yahoo Finance, 05:00 ET.
• TSMC (TSM): -0.4% in Taipei — Trump's push for U.S.-made chips is squeezing margins; Morningstar estimates U.S.-produced chips cost 20–50% more. TSMC has committed $200B to U.S. fabs. Source: CNBC, 02:00 ET.
• IBM: Focus ahead of Q2 report after close — stock crashed last week on a pre-earnings warning. Source: Yahoo Finance, 05:00 ET.
• Boeing (BA): Mildly positive — Ghost Bat drone leads the uncrewed fighter jet race. Source: Reuters, 01:06 ET.

Rates, FX, and Commodities

Rates: The U.S. Treasury curve is essentially flat overnight. The 10-year yield holds at 4.626%, the 2-year at 4.251% (-1 bp), and the 30-year at 5.132%. The curve steepened marginally. Bund 10-year at 3.177% (+1.2 bp), JGB 10-year at 2.735% (unch). The rate complex is caught between oil-driven inflation fears and a flight-to-safety bid from Middle East escalation. CME FedWatch assigns a 24.1% probability to a July rate hike and a 69% probability of at least 25 bp by September.

FX: The U.S. Dollar Index is steady at 101.11 (-0.06%). EUR/USD at 1.141, GBP/USD at 1.337, USD/JPY at 162.99. The yen is marginally stronger on safe-haven flows. Quiet elsewhere.

Commodities: Crude oil is the story. WTI September futures at $88.24, up 4.6% from Tuesday's settle — the largest overnight move since the Strait of Hormuz crisis reignited. Brent at $94.43 (+3.7%). Gold August futures at $4,122.80 (+1.1%), also benefiting from geopolitical risk bids and potential stagflation hedging. Natural gas at $2.884 (+0.7%). Copper at $6.523/lb (-0.5%), weighed by tariff uncertainty and China demand concerns.

Today's Setup and Risk Map

Economic calendar (Wednesday, July 22):

• 07:00 ET: MBA Mortgage Applications (prior: -2.7%).
• 10:30 ET: EIA Weekly Petroleum Status Report — critical given the oil price surge.
• 13:00 ET: 5-Year Treasury Note auction ($70B).
• No Fed speeches on the calendar.

Earnings today:

• BMO (already reported): Philip Morris (PM), GE Vernova (GEV), AT&T (T), CME Group (CME), Moody's (MCO), TE Connectivity (TEL), Wabtec (WAB) — all $20B+ market cap reporters.
• After close (AMC): Alphabet (GOOGL, $4.1T), Tesla (TSLA, $1.5T), Texas Instruments (TXN, $294B), IBM ($255B), ServiceNow (NOW, $101B), CSX ($89B), Kinder Morgan (KMI, $74B), United Rentals (URI, $67B).

Key futures levels (S&P 500 E-mini, ES1 at 7,530.0):

• Bull case: A de-escalation signal from Iran or a strong Alphabet beat lifts ES back above 7,550 resistance, targeting Tuesday's cash close at 7,509.
• Base case: Futures consolidate in a 7,490–7,540 range ahead of Alphabet/Tesla earnings, with oil stabilizing near $88.
• Bear case: Further escalation in the Middle East (Houthi Red Sea disruption expands), oil breaks above $90 WTI sustainably, and rate-hike probability crosses 30% — ES tests 7,450 support.

Biggest risk to the base case: A Houthi attack on Saudi crude shipments through Bab el-Mandeb that materially disrupts Red Sea tanker traffic, extending the oil supply shock beyond the Strait of Hormuz into a second choke point. That scenario has no near-term off-ramp and would directly challenge the Fed's ability to hold rates steady.

Earnings Calendar and Results

Earnings Calendar — sourced from DoltHub + DuckDB warehouse:
Already reported (pre-open, BMO):
- PM (Before market open, $282B) — EPS cons 9.21 (YoY +9.6%)
- GEV (Before market open, $281B) — EPS cons 24.46 (YoY -20.3%)
- T (Before market open, $158B) — EPS cons 2.55 (YoY +9.9%)
- CME (Before market open, $80B) — EPS cons 12.72 (YoY +4.4%)
- MCO (Before market open, $79B) — EPS cons 18.47 (YoY +10.5%)
- TEL (Before market open, $59B) — EPS cons 12.71 (YoY +12.4%)
- WAB (Before market open, $46B) — EPS cons 12.22 (YoY +14.8%)
- NTRS (Before market open, $32B) — EPS cons 12.22 (YoY +8.2%)
- TDY (Before market open, $29B) — EPS cons 26.14 (YoY +8.5%)
- OTIS (Before market open, $28B) — EPS cons 4.58 (YoY +10.1%)
- PHM (Before market open, $26B) — EPS cons 11.09 (YoY +11.5%)
- Additional sub-$20B BMO reporters: RPM, SF, ONB, TNL, IRDM, BMI, FBP, CALM, BKU, FBNC, HCSG, PFBC, NWFL, FCCO, JMSB, EQNR, OTLY, RCI.
Upcoming today (after close, AMC):
- GOOGL (After market close, $4,117B) — EPS cons 14.87 (YoY +3.8%)
- GOOG (After market close, $4,084B) — EPS cons 14.87 (YoY +3.8%)
- TSLA (After market close, $1,504B) — EPS cons 2.64 (YoY +22.8%)
- TXN (After market close, $294B) — EPS cons 8.91 (YoY +15.7%)
- IBM (After market close, $255B) — EPS cons 13.35 (YoY +8.7%)
- NOW (After market close, $101B) — EPS cons 4.99 (YoY +20.8%)
- CSX (After market close, $89B) — EPS cons 2.18 (YoY +13.5%)
- KMI (After market close, $74B) — EPS cons 1.51 (YoY +1.3%)
- URI (After market close, $67B) — EPS cons 53.16 (YoY +13.5%)
- Additional AMC reporters: WCN ($39B), CCI ($36B), LVS ($31B), RJF ($29B), plus mid/small-cap names.

Super Micro (SMCI) preliminary results (after-market reaction): SMCI shares surged 20.5% in after-hours trading after the company reported preliminary fiscal Q4 gross margins of 15–17%, roughly double the prior guidance of 8.2–8.4%. New orders exceeded a record $60 billion. The margin recovery signals pricing power in AI server solutions. Official Q4 results are due August 11. Source: MarketWatch, 20:33 ET.