Key Takeaways
- US and Iranian forces exchanged direct fire for the first time in over a month, with US strikes on Larak Island triggering retaliatory missile attacks on US bases in Jordan.
- SoftBank's (SFTBY) data-center venture, SB Energy, reportedly issued $5.5 billion in warrants to OpenAI to secure the AI giant as a primary tenant ahead of a planned $5B–$7B IPO.
- North Korea reaffirmed its "unchanged" hostile policy toward Washington, dismissing US denuclearization demands and vowing to strengthen its nuclear arsenal as an "absolute guarantee of sovereignty."
- Japan's housing starts for July rose 8.2% year-on-year, slightly exceeding estimates of 7.8% but marking a sharp deceleration from the 18.6% growth recorded in June.
- Oil prices surged over 2%, with Brent crude climbing above $90 per barrel as traders reacted to the escalation of hostilities in the vital Strait of Hormuz shipping lane.
US-Iran Hostilities Resume in the Strait of Hormuz
Military tensions in the Middle East reached a new peak on Monday as US forces struck two rocket launchers on Iran's Larak Island. According to U.S. Central Command, the "limited, precise action" was taken after detecting preparations by the Islamic Revolutionary Guard Corps (IRGC) to deploy sea mines into the Strait of Hormuz, a waterway responsible for 20% of global oil flow.
Iran responded swiftly, launching a combined missile-and-drone operation against two US air bases in Jordan. The IRGC claimed the strikes targeted technical infrastructure at the King Hussein and Al Azraq bases. This exchange marks the first direct military confrontation between the two nations since late July, abruptly ending a brief lull in a conflict that has persisted for over six months.
SoftBank’s SB Energy Offers Multi-Billion Dollar "Perk" to OpenAI
SoftBank Group (SFTBY) is deepening its financial ties with OpenAI through its data-center subsidiary, SB Energy. Draft IPO documents reviewed by the Wall Street Journal reveal that SB Energy issued warrants worth an estimated $5.5 billion to OpenAI. The incentive was designed to land the AI firm as a major tenant for its upcoming data-center campuses.
SB Energy is reportedly preparing to make its IPO filing public as early as this week, aiming to raise between $5 billion and $7 billion. The venture currently has 800 megawatts of capacity under construction and maintains a pipeline of nearly nine gigawatts. The deal underscores the aggressive competition among infrastructure providers to secure the computing power necessary for next-generation AI models.
North Korea Rejects US Denuclearization Demands
North Korea’s Foreign Ministry issued a defiant statement on Monday, asserting that its policy toward the United States remains "completely unchanged." A spokesperson emphasized that the country's nuclear status is irreversible and will not be weakened by "repeated U.S. denuclearization demands."
Pyongyang characterized Washington’s "hostile policy" as a permanent fixture, rendering any expectations of eased regional tensions "meaningless." This rhetoric comes despite recent conciliatory gestures from the Trump administration, including the scaling back of joint military exercises with South Korea. The ministry maintained that its nuclear program is the only guarantee of national sovereignty against external threats.
Japan Housing Data Shows Cooling Trend
In economic data, Japan’s annualized housing starts for July came in at 0.774 million, marginally beating the 0.768 million consensus estimate. On a year-on-year basis, starts grew by 8.2%, a significant drop from the 18.6% surge seen in the previous month.
While the data exceeded analyst expectations, the sharp month-on-month deceleration suggests that elevated building costs and base effects are beginning to weigh on the residential construction sector. Analysts noted that while the print was a "marginal beat," the cooling trend in Japanese construction could have long-term implications for regional demand in construction steel and lumber.
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.