Edward Meir's week in review and thoughts on the week of July 13, 2026

On Sunday, July 6, the relative calm was shattered by reports of Iranian attacks on three Qatari and Saudi commercial tankers that apparently failed to heed Iranian warnings to avoid sailing out of the southern part of the Persian Gulf. An angry President Trump, attending the NATO summit in Turkey, then ordered a series of strikes against Iranian targets the next day.

Trump also added that he now viewed the ceasefire with Iran as basically being “over.” He in addition demanded that Tehran declare publicly the Strait of Hormuz was now open and that it would cease attacks on commercial ships. If not, the country would run the risk of getting hit by additional strikes.

The Iranians responded by launching drone and missile attacks on a number of Gulf countries, trying to hit US military bases in the process. We saw a second round of US strikes set in mid-week and a third this weekend, followed by Iranians reprisals on targets in Kuwait, Jordan, and Qatar.

Oil and energy

We will see how energy markets react to these developments this week. But last week, Brent crude gained about 5.50%. WTI was up by nearly 4%. This was the best weekly showing in crude going back two months. Product prices also worked higher last week. And pump prices wasted no time climbing higher either, up by anywhere between four to eight cents per gallon.

We suspect crude prices will open higher on Monday. But the fact that energy assets in the Gulf have not been targeted (by either side thus far) should keep sharper rallies in check. Meanwhile, there are conflicting reports as to the status of the Strait. Iran said that it considers the Strait closed. But the US insists it is open. Bloomberg reported that there was almost no visible traffic on the Strait on Sunday, with only two oil product tankers seen approaching the waterway. Moreover, a vessel that was struck by an Iranian drone earlier in the week is still stranded in the Gulf. A second one was also hit. Its status is unknown.

Despite the deteriorating conditions, neither the US nor Iran is ready to cut off all communications with the other just yet. In fact, President Trump gave the go ahead for his negotiators to continue their talks. But he did not give these much chance of success. (Talks are apparently scheduled for this week in Switzerland.)

Meanwhile, intermediaries from Qatar—ironically one of the countries hit hardest by Iran—were in Tehran late last week trying to get the ceasefire reinstated. In addition, the Iranian foreign minister will visit Oman to coordinate arrangements for future Gulf navigation. Indeed, this latest conflict traces its roots to varying interpretations of Article 5 in the MOU. The language makes it unclear as to what kind of passageway we will see and who will control it. The Iranians think it is their responsibility (along with Oman) to supervise transit. The US says that after 60 days, things must revert to their pre-war status with open navigation for all.

US equities and treasury markets

Outside of energy, US equities turned in a mixed performance last week given the sharp swings in both oil and semiconductor stocks. The S&P 500 gained 1.2% on the week. NASDAQ advanced by 1.7%. But the Dow ended 0.5% lower as economically sensitive and industry-heavy names struggled.

The information technology sector was up 3.4% for the week, while the semiconductor index tacked on 2.7%. Not surprisingly, the energy sector finished with a 3.2% gain and was the week’s best performer. Economic data played a secondary role to geopolitical developments. But the numbers we did get (itemized later) reinforce the view of a resilient US economy. Second-quarter earnings season is set to begin this week (alongside another round of inflation data) and should test the market’s ability to climb higher.

In the US treasury markets, two-year yields ended seven basis points higher on the week (at 4.2%). Ten-year rates pushed up by eight basis points to finish at 4.57%. Despite the uptick, the general dollar index lost a bit of ground.

Base and precious metals

In the base metal space, aluminum prices were up by 2% on the week. No surprise here because the complex tends to track crude oil prices closely. However, aluminum’s gains were kept in check by reports that, after a three-month outage, Emirates Global Aluminum (EGA) had restarted its alumina refinery in the UAE to 50% of capacity. However, prospects for EGA’s aluminum to flow through to export markets remain uncertain given the shipping paralysis in the Gulf.

Among individual metals, copper tacked on about 0.8% on the week, finishing at just under $13,500/ton. Prices were supported by a decent recovery in semiconductor equity names, along with reports of falling copper inventories in China and supply concerns in South America. On the latter point, Chilean production in particular has fallen off sharply so far this year. Nickel was up by about 0.8% on the week in relatively quiet trading. Tin and zinc were the best performers, up by about 3% each. Zinc finished at just over $3,600/ton on reports of a fire at a major South Korean zinc smelter. Lead prices ended with a fractional loss. In the steel space, prices remain firm because the market is still tight.

In precious metals, gold finished 0.6% lower last week at $4,115/ounce as rising crude oil prices and a stronger dollar kept the pressure on prices. Silver finished with a $2.50/ounce loss on the week, settling below $60/ounce. Platinum and palladium ended just about flat..

Macro readings and other news from the past week

• Minutes of the Fed’s June meeting showed all participants supported keeping the federal funds rate at 3.50%-3.75%. But a few saw a case for an increase. Participants split into two broad groups on year-end rates. One expected policy to finish at or just below today’s range. Another saw a higher setting. The post-meeting statement also dropped language pointing to an easing bias. Tariffs, Middle East supply disruptions, and strong AI-related demand were among the inflation risks discussed. “Several participants commented that price pressures had become more broad-based, with a large share of goods and services—including transportation, air fares, petrochemical products, and agricultural inputs—experiencing substantial increases. … Several participants remarked that services price inflation excluding housing had declined little and [also] remained high,” the minutes said.

• The Fed’s semiannual report depicted an economy increasingly shaped by high-tech investment and productivity gains. AI-related spending is said to be supporting manufacturing output with data-center construction being the main driver. Strong productivity gains have helped keep wage gains just about in line with inflation. (But there have been certain months when this has not been the case.) Separately, New York Fed respondents raised one- and three-year inflation expectations to 3.7% and 3.3%. The five-year measure held at 3.0%.

• US services activity continued to expand in June despite the fact that ISM services readings eased to 54.0 in June from 54.5 in May. Business activity and new orders slowed, while employment rose to 51.2 from 47.9 and is now back in growth mode. Prices paid declined to 67.7 from 71.3 but remain elevated. The key takeaway: activity is still running at a good clip despite ongoing pricing pressures. In fact, the June ISM reading is still about 0.9% above the 12-month average of 53.1%. Separately, the S&P Global services index increased to 51.2 from 50.7, its strongest reading in four months.

• The US trade deficit widened by 42% in May to $78 billion as exports fell 3.2% and imports rose by 3.3%. The goods deficit increased by $23.6 billion to $106.5 billion, with purchases of consumer items, industrial supplies, and vehicles all moving higher. Even after May’s sharp drop, the cumulative deficit for January-May remains 41% below the year-earlier level.

• Existing-home sales slipped 2.4% in June to an annualized rate of 4.09 million. But sales remain 2.8% above a year earlier. The median price increased 1.8% year over year (y/y) to a record $440,600. Inventory edged down to 1.56 million homes, equivalent to 4.6 months of supply.  Although affordability improved across all regions, overall sales are still being held back by high prices and elevated mortgage rates. Meanwhile, the WSJ ran a story last week saying that the summer sales season for existing homes is off to a strong start after an anemic spring season.

• Consumer credit decreased by a slight $200 million in May after increasing by a revised $20.8 billion in April. Revolving credit decreased by $5.3 billion while nonrevolving credit increased by $5.1 billion.

• The US Department of Commerce opened a circumvention case covering corrosion-resistant steel processed in Thailand from Chinese inputs. Nucor and Steel Dynamics allege that Thai finishing is being used to route Chinese material around existing duties. A preliminary ruling is due within 150 days.

• US steel mill shipments rose to 8.14 million short tons in May, up 6.2% from April and up 8.5% y/a, according to the American Iron and Steel Institute. Shipments totaled 39 million short tons in January-May, up 4.6% from a year earlier. Year-to-date shipments of sheet and strip increased 13%, while hot-rolled sheet and strip rose 4%. Separately, there has been a steep drop in US imports of hot-dipped galvanized sheet and strip, off 44% y/y in January-May to about 422,000 metric tons.

This week’s US macro readings

Nothing comes out on Monday. Tuesday brings us the NFIB optimism index (expected at 95.8, last 95.3) followed by June CPI (expected at -0.2%, last 0.5%). The y/y CPI is expected to drop to 3.8% from last month’s 4.2% reading as the recent downward spiral in oil prices makes its way through the data. Core CPI is expected to come in at -0.2% (last 0.2%) while the annual core is expected to come in at 2.8% (last 2.9%). A number of Fed governors speak on Tuesday, including Chair Kevin Warsh, who begins his annual testimony to Congress.

Wednesday brings us June producer prices (expected at -0.2%, last 1.1%), while the core PPI is expected at 0.3% (last 0.8%). The July Empire manufacturing index also comes out Wednesday (expected at 9.4, last 5.7) as does the Fed Beige Book.

Thursday brings us June retail sales (expected at 0.2%, last 0.9%), with the ex-auto number expected at unchanged (last 0.5%). Weekly initial claims also come out Thursday (expected at 218,000, last 215,000).

On Friday, we get June housing starts and building permits data (expected at 1.31 million and 1.41 million, respectively, last 1.18 million and 1.41 million). We also get June industrial production (expected at 0.3%, last 0.1%), July consumer sentiment readings (expected at 50.5, last 49.5), and the July home-builder confidence index (expected at 35, unchanged from the previous month).

We wish all our readers all the best for the upcoming week.