Key Takeaways
- Japan's Nikkei 225 plummeted 3.5% to 64,497.12 in early trade, leading a broader Asian equity decline as semiconductor stocks faced a sharp selloff over AI valuation concerns.
- WTI crude futures rose 0.85% to $79.62 following U.S. military strikes in Iran and a significant drop in vessel traffic through the Strait of Hormuz, raising fears of a major supply disruption.
- Trump Media & Technology Group (DJT) announced the launch of "Truth API," a paid service offering high-frequency traders millisecond-early access to market-moving posts from the U.S. President.
- Federal Reserve Vice Chair Philip Jefferson signaled he is open to reconsidering the current policy stance if inflation does not cool soon, though he currently favors holding rates steady.
- Seven & i Holdings (3382) confirmed it is in discussions to acquire a double-digit stake in Zabka Group, Poland's largest convenience store chain, in a deal potentially worth several billion dollars.
Asian Markets and Tech Volatility
Asian equities opened sharply lower on Friday, pressured by a combination of overnight losses in U.S. technology stocks and escalating geopolitical risks. The Nikkei 225 (N225) saw its decline deepen to 3.5%, while Australia's S&P/ASX 200 (XJO) slipped 0.3% to 8,814.20. Regional sentiment was further dampened by a massive selloff in the semiconductor sector, as investors questioned whether massive AI investments would yield near-term returns.
South Korean markets remained closed for Constitution Day, providing some insulation from the regional rout. However, European equity futures pointed toward a lower open, with EURO STOXX 50 futures falling 0.4% and DAX futures down 0.2%.
Energy Surge Amid US-Iran Escalation
Oil prices continued their upward trajectory as the conflict between the U.S. and Iran intensified. U.S. Defense Secretary Pete Hegseth asserted that Iran does not control the Strait of Hormuz, following U.S. military operations targeting Iranian supply routes.
Shipping traffic through the critical waterway has reportedly collapsed by 60%, with only 14 vessels recorded on a single day compared to the usual 100. Analysts warn that if hostilities persist, local pump prices could see double-digit increases in the coming weeks.
Monetary Policy and Corporate Moves
In a speech at Stanford University, Fed Vice Chair Philip Jefferson maintained a data-dependent tone, noting that while the current policy is "well positioned," a lack of progress on inflation could necessitate higher rates later this year. His remarks come as Core PCE remains elevated at 3.4%, well above the central bank's 2% target.
On the corporate front, Brookfield Corporation (BN) received shareholder approval to simplify its corporate structure, a move expected to close by year-end. Meanwhile, Seven & i Holdings (3382) is looking to accelerate its European expansion through a massive investment in Poland's Zabka Group, though the company stressed that no final decision has been made.
Political and Legal Developments
Trump Media & Technology Group (DJT) is moving to monetize the President's social media influence by launching a Truth API for institutional traders on August 1. The service aims to provide verified, low-latency access to posts that frequently move global currencies, oil, and stocks.
Separately, the U.S. Government is reportedly considering intervening in President Trump’s $10 billion defamation lawsuit against the BBC. The broadcaster has voiced fierce opposition, citing a "clear and stark" conflict of interest as the President directs federal resources toward a personal civil matter.
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.