Between oil and chips: the risk changes face

Between Saturday, July 25th, and Tuesday, July 28th, markets experienced a sudden risk rotation. The suspension of US attacks on Iran reduced the geopolitical premium on oil, but the energy relief was quickly overshadowed by the global sell-off in semiconductors. Attention thus shifted from the potential blockade of Gulf shipping routes to the economic sustainability of the artificial intelligence boom.

Oil prices fall, but Hormuz remains the center of the game

The American decision to halt a 13-night sequence of bombings opened a space for diplomacy, while leaving the naval blockade against Iran in place. Tehran signaled it would suspend its actions as long as Washington maintained the pause, quickly shifting market expectations.

The sharpest reaction was seen in crude oil. After surpassing $100 the previous week, Brent crude lost nearly 9% on Monday and fell further to $86.70 a barrel on Tuesday. WTI rose just above $81 . This move alleviated fears of a renewed surge in inflation, without erasing the concrete risks to supplies.

Oman has presented Iran with a Gulf-backed project for shared management of the Strait of Hormuz, with voluntary contributions for shipping companies. Before the war, about a fifth of the world's oil supply passed through that passage. However, flows remain limited, and the market is pricing in primarily a possible diplomatic solution, not yet a true normalization of trade.

Tensions have also spread to the Red Sea. The Houthis have attacked Saudi infrastructure, forcing Saudi Aramco to shut down its Jizan refinery, which can process 400,000 barrels per day . A new Ukrainian attack also affected Russian energy infrastructure in Yaroslavl, where refining capacity is close to 300,000 barrels per day . The decline in crude oil prices is therefore coexisting with a still-vulnerable logistics network.

From the energy crisis to the sale of semiconductors

The relief provided by oil failed to support the entire stock market. Wall Street closed mixed on Monday, with the Dow Jones up 0.51% , the S&P 500 almost unchanged, and the Nasdaq slightly negative. On Tuesday, pressure focused on technology: the Nasdaq lost about 1.4% during the session, and the MSCI World Index fell to its lowest level in a month.

The epicenter of the correction was South Korea. The KOSPI fell more than 10% , triggering a temporary trading halt, while Samsung Electronics and SK Hynix posted double-digit losses. The two companies had assumed enormous weight in the index thanks to the surge in AI memory; this very concentration amplified the decline.

News from China has also weakened the Western narrative on AI. Beijing has reportedly begun production of domestic machines for DUV immersion lithography, a technology previously dominated by foreign companies. The stock market launch of Chinese memory manufacturer CXMT has also reinforced the idea that competition may increase more rapidly than expected.

Investors are beginning to question whether spending on data centers, chips, and infrastructure can generate sufficient returns to justify high valuations and growing reliance on debt. The decline in semiconductors therefore signals a market less willing to accept future growth as the sole guarantee.

Europe finds support in profits and Germany

In Europe, the reaction was more measured. The STOXX 600 rose 0.3% , buoyed by results from several large consumer and automotive groups. The gains of Unilever and Mercedes-Benz offset the weakness of technology, banking, and the energy sector, which was penalized by the decline in oil prices.

An encouraging sign also came from Germany. The Ifo business confidence index rose to 86.6 , its highest since February and the third consecutive monthly increase. The figure indicates less pessimism and more favorable expectations for infrastructure investments, but it does not eliminate the fragility of European industry, which is still sensitive to energy costs.

In the United States, however, the Conference Board's consumer confidence index fell to 90.8 , against expectations of improvement. Households continue to perceive weakness in the labor market and increased economic uncertainty. The contrast between the US and German data has blurred the overall picture of global growth.

Rates, currencies and metals under the shadow of the Fed

The bond market reacted more cautiously than crude oil. The yield on the 10-year Treasury note fell to 4.61% , but remained near recent highs. Traders had placed a roughly 32% probability of a Federal Reserve rate hike at Wednesday's meeting: the decline in oil prices has reduced inflation risk, but not eliminated it.

The dollar remained near five-week highs. The euro hovered around $1.137 , while the dollar-yen exchange rate remained near $1.64 , a zone that continues to fuel speculation of intervention by the Japanese authorities.

The strength of the greenback and interest rate expectations also held back commodities. Gold fell to $4,045 an ounce , silver lost nearly 2% , and copper retreated to around $13,664 a ton . Metals reflected a complex balance: lower demand for safe-haven assets, high interest rates, and doubts about industrial growth.

The market changes its enemy

In a matter of days, the focus of volatility has shifted. The immediate threat is no longer just oil above $100 or the closure of the Hormuz pipeline, but the possibility that the artificial intelligence cycle has outpaced earnings and real financing capacity. The decline in energy prices offers relief to consumers and central banks, but it's not enough to sustain markets in which technology, interest rates, and geopolitics are now part of the same unstable equilibrium.