{"id":65186,"date":"2026-07-21T22:38:17","date_gmt":"2026-07-22T02:38:17","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-us-trade-shifts\/65186\/"},"modified":"2026-07-21T22:38:17","modified_gmt":"2026-07-22T02:38:17","slug":"global-markets-react-to-middle-east-escalation-and-us-trade-shifts","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/global-markets-react-to-middle-east-escalation-and-us-trade-shifts\/65186\/","title":{"rendered":"Global Markets React to Middle East Escalation and US Trade Shifts"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>President Donald Trump has threatened to strike Iran\u2019s &quot;Pickaxe&quot; nuclear facility<\/strong>, driving Brent crude prices toward <strong>$92.42 per barrel<\/strong> as regional conflict intensifies.<\/li>\n<li><strong>The US House approved a stopgap spending measure<\/strong> to fund the government until <strong>December 4<\/strong>, aiming to bypass a shutdown before the November midterm elections.<\/li>\n<li><strong>The Trump administration is halving aluminium tariffs<\/strong> for companies that commit to domestic smelting investments by <strong>2029<\/strong> to secure defense supply chains.<\/li>\n<li><strong>China reported 6.95 million new urban jobs<\/strong> in the first half of 2026, while its recent submarine-launched missile test has fractured unity among Pacific island nations.<\/li>\n<li><strong>Global yields remain volatile<\/strong>, with Japan\u2019s 40-year JGB yield rising to <strong>3.895%<\/strong> and Sri Lanka maintaining its policy rate at <strong>8.75%<\/strong> amid energy-driven inflation.<\/li>\n<\/ul>\n<h2>Middle East Tensions and Energy Volatility<\/h2>\n<p>Geopolitical risk has surged as President <strong>Donald Trump<\/strong> signaled that the United States is prepared to attack Iran\u2019s deeply buried <strong>Pickaxe<\/strong> nuclear facility. This escalation follows a series of American strikes targeting Iranian capabilities in the <strong>Strait of Hormuz<\/strong>. <em>Goldman Sachs has warned that Brent crude could soar to $120 a barrel<\/em> if the vital shipping lane remains disrupted through the end of the year.<\/p>\n<p>The potential for a direct strike on Iranian infrastructure has sent shockwaves through energy markets. International benchmarks rose <strong>1.6%<\/strong> in Asian trade on Wednesday, marking a <strong>25%<\/strong> increase for the month of July. Analysts suggest that the &quot;Pickaxe&quot; site, located near <strong>Natanz<\/strong>, has recently been used to house thousands of centrifuges and a significant stockpile of <strong>60% enriched <a href=\"https:\/\/stockmarketwatch.com\/metal\/uranium\" data-internallinksmanager029f6b8e52c=\"13\" title=\"Uranium\">uranium<\/a><\/strong>.<\/p>\n<h2>US Legislative and Trade Policy<\/h2>\n<p>In Washington, the <strong>House of Representatives<\/strong> passed a short-term spending bill in a <strong>220-205<\/strong> vote to prevent a government shutdown. The measure extends funding until <strong>December 4<\/strong>, allowing lawmakers to avoid a fiscal crisis during the peak of the <strong>November election<\/strong> season. The bill now moves to the <strong>Senate<\/strong>, where it requires bipartisan support to clear the chamber before the <strong>September 30<\/strong> deadline.<\/p>\n<p>Simultaneously, the administration is leveraging trade policy to bolster national security. A new directive offers to cut the current <strong>50% tariff<\/strong> on raw aluminium feedstock in half for companies investing in US smelting plants. The move aims to reverse a two-decade decline in domestic production, as the <strong>Pentagon<\/strong> seeks to reduce reliance on foreign adversaries for materials used in <strong>fighter jets, missiles, and armored vehicles<\/strong>.<\/p>\n<h2>Asian Economic and Security Developments<\/h2>\n<p><strong>China\u2019s Ministry of Human Resources<\/strong> announced the creation of <strong>6.95 million new urban jobs<\/strong> during the first six months of 2026. While the government maintains that the labor market is stable with a <strong>5.2% average unemployment rate<\/strong>, regional security tensions are rising. A recent Chinese submarine-launched ballistic missile test near <strong>Tuvalu<\/strong> has exposed a lack of unity within the <strong>Pacific Islands Forum<\/strong>, as member nations struggle to coordinate a response to Beijing&#39;s military modernization.<\/p>\n<p>In financial markets, <strong>Indonesia\u2019s IDX Composite Index<\/strong> gained <strong>0.8%<\/strong> to reach <strong>6,394.667 points<\/strong>, its highest level since late May. The rally was supported by strong foreign direct investment in mineral projects and optimism surrounding the current earnings season. Meanwhile, the <strong>Central Bank of Sri Lanka<\/strong> held its overnight policy rate at <strong>8.75%<\/strong>, citing a rise in headline inflation to <strong>6.8%<\/strong> driven by global energy costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways President Donald Trump has threatened to strike Iran\u2019s &quot;Pickaxe&quot; nuclear facility, driving Brent crude prices toward $92.42 per [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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