Key Takeaways
- U.S. and Saudi forces launched joint precision airstrikes in eastern Iraq against Iran-aligned militants following a wave of over 30 drone attacks targeting regional energy infrastructure and military personnel.
- Taiwan's TAIEX plummeted over 2,000 points (4.65%), marking its third-largest single-day decline on record, driven by a global retreat from semiconductor and AI-related stocks.
- The People's Bank of China (PBOC) strengthened the yuan midpoint to 6.7899, its highest level since February 2023, signaling a deliberate policy shift toward currency strength.
- SK Hynix (SKHY) shares fell 2.9% as the company announced it would finalize additional shareholder return plans by year-end while facing regulatory limits on converting domestic shares to ADRs.
- A 7.1-magnitude earthquake in Kumamoto, Japan, caused a chimney collapse at a Nippon Paper Industries (3863) plant, leaving two in cardiac arrest and several others missing.
Joint Military Action in the Middle East
U.S. Central Command (CENTCOM) and the Saudi Arabian Armed Forces conducted joint precision strikes on July 28 against Iran-backed terrorist sites in Iraq. The operation targeted logistics and weapons facilities in the Saladin and Kirkuk Governorates, responding to more than 30 aerial drone attacks directed by the Islamic Revolutionary Guard Corps (IRGC) over the preceding 72 hours.
The strikes mark a significant escalation in regional defense cooperation, specifically aimed at protecting Saudi energy infrastructure and U.S. personnel. CENTCOM reported that Iran-aligned militias have attempted over 600 attacks on U.S. citizens and facilities between February and April 2026, warning that further aggression will trigger additional military responses.
Asian Markets Reel from Tech Sell-off
The Taiwan Stock Exchange (TAIEX) experienced a historic "crash dive," plunging 2,030.83 points to close at 41,603.36. The sell-off was led by heavyweight TSMC (TSM), which fell 2.98%, and was exacerbated by broader concerns regarding the sustainability of AI capital expenditures and potential U.S. Federal Reserve rate hikes.
In South Korea, the KOSPI reversed a massive 3.4% opening gain to finish lower, while SK Hynix (SKHY) saw its shares slip 2.9%. The memory chip giant confirmed it is reviewing additional shareholder return measures but noted that restrictions on converting domestic shares into American Depositary Receipts (ADRs)—currently capped at a 2.5% quota—will likely maintain a significant price premium for U.S.-listed shares.
China's Currency and Trade Maneuvers
The People's Bank of China set the yuan's daily reference rate at 6.7899 per dollar, the strongest fixing in over three years. This move suggests Beijing is prioritizing exchange rate stability and "goodwill appreciation" following recent diplomatic summits, even as the domestic economy remains heavily reliant on exports.
Simultaneously, China's Ministry of Commerce intensified its rhetoric against Western trade policies. Beijing condemned the U.S. Department of Commerce for adding Chinese research bodies to its sanctions list, calling the move a "weaponization" of research ties. In Europe, China expressed "strong dissatisfaction" over the UK's nationalization of British Steel, previously owned by China's Jingye Group, citing concerns over the protection of Chinese investments and global trade regulations.
Natural Disaster Disrupts Japanese Industry
A powerful 7.1-magnitude earthquake struck Kumamoto Prefecture on Tuesday, causing significant industrial damage and human casualties. At a plant operated by Nippon Paper Industries, a large chimney collapse trapped 11 workers, with two confirmed in cardiac arrest and seven still missing. The quake also triggered an explosion at an Aeon Mall in Kashima, further disrupting local economic activity and supply chains in the Kyushu region.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.