US stocks drop on latest Middle East fighting, tech earnings caution
“The whole US Iran situation is sounding a little dicey at the moment,” said Briefing.com analyst Patrick O’Hare.
Traders work on the floor of the New York Stock Exchange during morning trading on Jul 17, 2026 in New York City. (Photo: AFP/Michael M. Santiago)
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NEW YORK: Wall Street stocks retreated Monday (Jul 20) with early gains fading as the escalating US-Iran conflict lifted oil prices while markets awaited key earnings reports.
Iranian President Masoud Pezeshkian described the country as “engaged in a full-scale war” with the United states, while Tehran’s Yemeni allies, the Houthi rebels, announced they would blockade Saudi ports, putting at risk Riyadh’s ability to bypass the Strait of Hormuz for some of its oil exports.
Fresh fighting came after a weekend in which the US announced three new US military fatalities and one service member missing in action.
Oil priced pushed higher, with Brent oil futures finishing up 1.3 per cent at US$89.22 per barrel after earlier breaching US$90 a gallon. US gasoline prices jumped back above US$4 a gallon, according to the AAA motor club.
“The whole US Iran situations is a sounding a little dicey at the moment,” said Briefing.com analyst Patrick O’Hare.
After last week’s losses, semiconductor stocks advanced, but O’Hare said investors remained hesitant about whether tech company earnings will live up to outsized expectations due to artificial intelligence.
“There is not a lot of conviction right now,” O’Hare said. “The question is not so much if giants like Alphabet or Tesla will beat the expectations, but ‘Will they beat them by enough?’”
Earlier Asian stock markets ended the day mostly lower under the weight of higher oil price, alongside lingering concerns that the AI sector may be overbought.
Crude futures have surged over the past week as Washington and Tehran traded fire, raising fears of a sustained disruption in the Strait of Hormuz, through which around one fifth of the world’s oil normally passes.
On Monday, markets weighed aggressive rhetoric out of Tehran and Washington against more conciliatory statements that at times moderated the oil market.
“We have received messages – without going into details – but the main point is that the diplomatic apparatus has been active in recent days and ideas have been conveyed to us by certain mediators,” Iranian foreign ministry spokesman Esmaeil Baghaei told a news conference in Tehran.
Oil markets were also pressured by uncertainty over Saudi oil supplies.
Saudi Arabia has been able to continue exporting millions of barrels of oil a day despite the Hormuz blockade — although far below its prewar totals – via its Red Sea port of Yanbu.
Oil markets have for months feared that the Houthis would return to attacking shipping in the Red Sea and Gulf of Aden, as they did during the Gaza war, potentially cutting off yet more crude from global markets.
The Houthis, who have been at war with Riyadh for over a decade, have not said how they will enforce their blockade.
Elsewhere, The British pound dipped against the dollar as Andy Burnham took over as Britain’s prime minister, naming former defence secretary John Healey as finance minister in an unexpected appointment.
London’s blue-chip FTSE 100 shed 0.7 per cent as investors faced down “a renewed oil shock, rising shipping fears around the Strait of Hormuz and uncertainty over the policy direction of Britain’s new prime minister,” said Patrick Munnelly at Tickmill.
Source: AFP/fs
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