US stocks investors will focus on second-quarter corporate earnings and June inflation indicators this week amid renewed US-Iran conflict. Trump declared the ceasefire memorandum of understanding with Iran ended, and US military conducted consecutive strikes on Iran, yet WTI August futures declined 0.93% on July 10. Market participants interpret the muted oil price reaction as indication both sides may resume dialogue despite intermittent military clashes.
US-Iran Conflict Shows Limited Market Impact Despite Military Strikes
Trump declared the ceasefire memorandum of understanding with Iran ended on July 10, and US military conducted consecutive strikes on Iran over multiple days. Hormuz Strait passage effectively halted again. Despite Trump's declaration, WTI August futures fell 0.93% on July 10 and declined 1.96% on July 9 during ongoing US airstrikes on Iran.
Iran Foreign Minister Abbas Araghchi stated "compliance with the memorandum of understanding is the only solution," confirming willingness to resolve the situation through dialogue. Brian Leonard, portfolio manager at Kirigabelli Fund, said "it is too early to determine whether this is a temporary clash or full-scale escalation" and noted "there have been intermittent clashes over the past six weeks, and if it develops into full-scale escalation, the market will need to reprice factors."
June CPI and PPI Data Scheduled for Release This Week
June Consumer Price Index and Producer Price Index will be released this week. According to Yonhap Infomax market consensus, June CPI is expected to decline 0.1% month-over-month, while core CPI is expected to rise 0.3%. The expected decline follows particularly high inflation rates in April and May.
CME FedWatch Tool shows federal funds rate futures market prices 30.4% probability of rates remaining unchanged through end of September and approximately 70% probability of 25 basis points or more increase. Fed Chair Kevin Warsh previously stated at European Central Bank conference this month that constructive "family fight" is expected in July. June CPI results will provide basis for this debate.
Fed Chair Warsh to Testify Before House and Senate Committees
Fed Chair Kevin Warsh will testify before US House of Representatives and Senate this week. Warsh tends to refrain from commenting on monetary policy, so market participants may seek hints from his overall tone.
Multiple Fed officials are scheduled to speak this week. Fed Vice Chair for Supervision Michelle Bowman and Fed Governor Christopher Waller will speak on July 13. Fed Governor Michael Barr, Chicago Fed President Austan Goolsbee, and Fed Governor Lisa Cook will speak on July 14. New York Fed President John Williams and Fed Governor Lisa Cook will speak on July 15. Dallas Fed President Lorie Logan will speak on July 16.
Major Banks and Tech Firms to Report Second-Quarter Earnings
Second-quarter corporate earnings announcements will begin in earnest this week. Banks will report results first following convention. Goldman Sachs, JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup will announce results on July 14. Morgan Stanley, BlackRock, Johnson & Johnson, and United Airlines will report on July 15. Netflix will announce results on July 16.
ASML and Taiwan's TSMC earnings will also provide indicators for semiconductor sector momentum.
Additional scheduled economic data releases:
- July 16: Weekly initial jobless claims, June retail sales, July NAHB Housing Market Index, June pending home sales
- July 17: June export-import price index, June industrial production, July University of Michigan consumer sentiment and inflation expectations
FAQ
What did Trump declare regarding the US-Iran ceasefire on July 10?
Trump declared the ceasefire memorandum of understanding with Iran ended on July 10, and US military conducted consecutive strikes on Iran. Hormuz Strait passage effectively halted again.
What are the market expectations for June CPI data?
According to Yonhap Infomax market consensus, June CPI is expected to decline 0.1% month-over-month, while core CPI is expected to rise 0.3%. The expected decline follows particularly high inflation rates in April and May.
Which major banks will report second-quarter earnings this week?
Goldman Sachs, JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup will announce results on July 14. Morgan Stanley will report on July 15.
