Key Takeaways
- Iran’s IRGC launched "precise and concentrated" missile strikes against US military bases in Kuwait and Bahrain, causing US Crude oil to rise 1.1% as regional stability fears intensify.
- Copper prices topped $14,000 a ton and Aluminum hit a four-year high of $3,752.50, driven by Middle East supply risks and surging demand from AI and energy transition sectors.
- The USTR has officially launched a public comment process regarding the U.S.-China Board of Trade, seeking input on potential tariff adjustments for specific sectors through July 10.
- S&P 500 and Nasdaq futures both slipped 0.1% in late-night trading as investors reacted to the military escalations in the Persian Gulf.
- Australia’s S&P Global May PMI Composite rose slightly to 48.7 but remains in contraction territory, while New Zealand building permits surged 10.9% in April.
Iran Strikes US Bases in Kuwait and Bahrain
The Islamic Revolutionary Guard Corps (IRGC) confirmed on Tuesday that it carried out retaliatory ballistic missile strikes targeting US military bases in Kuwait and Bahrain. The IRGC stated the attacks were a direct response to a purported US strike on Iran’s Qeshm Island, warning that any further "reckless adventurism" would be met with a "seismic, crushing, and decisive response."
Reports from the Tasnim News Agency indicated multiple explosions at US facilities, while air defense activity was observed over Manama, Bahrain. The escalation marks a significant break from previous rules of engagement, with Iranian officials declaring that the "time of hit and run is over."
Markets React to Gulf Instability
Financial markets showed immediate volatility following the reports of military action. US Crude oil prices climbed 1.1%, reflecting concerns over potential disruptions to energy transit through the Strait of Hormuz.
In equity markets, S&P 500 futures dipped 0.1% and Nasdaq futures fell 0.1%. Investors are pivoting toward defensive postures as the threat of a broader regional conflict looms over global supply chains.
Commodities Hit Record Highs on Supply Risks
Base metals reached historic milestones as supply concerns merged with structural demand. Copper closed at $14,040.50 a ton, while Aluminum rose over 25% year-to-date to reach $3,752.50 a ton.
Analysts cite a "perfect storm" of Middle East supply risks, potential U.S. tariff actions, and AI-driven demand as the primary catalysts for the rally. The energy transition continues to provide a high floor for prices, as copper remains essential for global electrification efforts.
USTR and Defense Developments
The Office of the United States Trade Representative (USTR) has opened a public comment window for the U.S.-China Board of Trade. The agency is seeking feedback on which products and sectors should be eligible for U.S. tariff adjustments, with a final submission deadline of July 10.
Simultaneously, the State Department approved a possible $100 million military sale of C-130 sustainment services to Vietnam. This move highlights the ongoing U.S. effort to strengthen regional partnerships in Southeast Asia amid shifting geopolitical alliances.
Regional Economic Updates
In Australia, the S&P Global May PMI Composite printed at 48.7, a slight improvement from the previous 47.8 but still indicating a contraction in private sector activity. Meanwhile, the ACCC has granted conditional approval for Ampol (ALD) to proceed with its acquisition of EG Australia.
New Zealand reported a massive 10.9% jump in building permits for April, rebounding from a previous 1.3% decline. However, the nation's Terms of Trade Index for Q1 fell 2.0%, missing analyst estimates of a 1.0% decline and signaling pressure on the country's export-import balance.
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.