Ten Stories Moving the Market

Ten Stories Moving the Market:

The U.S. destroyed five Iranian oil tankers in response to fresh attempts by Tehran to strike U.S. warships in the Middle East in recent days, according to U.S. Central Command; since Friday, Iran has fired ballistic missiles at a U.S. aircraft carrier, Navy destroyers and at least one Marine ship, according to U.S. officials – WSJ. (Why you should care – the attacks are a sign of increasing frustration from the government in Tehran regarding its lack of ability to export oil via the Strait of Hormuz)

The European Union and Canada are working toward a new, all-encompassing relationship that will range from trade to security, as the transatlantic partners seek to build a new alliance to offset the global power politics dominated by the U.S. and China – Bloomberg. (Why you should care – European Union President Ursula van der Leyen is expected to make a more formal announcement next week)

South Korean President Lee Jae Myung and French President Emmanuel Macron discussed cooperation on security and freedom of navigation in the Strait of Hormuz during a summit in Paris on Tuesday, but the talks did not concern troop deployment, according to Seoul – Reuters. (Why you should care – a group of 41 nations has pledged to police the Strait of Hormuz once the current conflict is over)

Treasury Secretary Scott Bessent said his move last month to expand a buyback program for older U.S. government securities was aimed at quelling a “fever” in the bond market; Bessent was speaking on the eve of the first scheduled buyback operation of longer-dated securities since his announcement last month – Bloomberg. (Why you should care – Bessent said the effort is to restore equilibrium in the financial markets)

Over a decade ago, Ohio lawmakers exempted tech companies from sales taxes on computer servers and other equipment needed for data centers, betting that changes worth millions of dollars would lure much-needed investment to the state; it worked, until the artificial-intelligence boom supersized the tax exemption, pushing it to more than $1.5 billion last year, more than 10 times the original state estimate – WSJ. (Why you should care – states like Ohio, who are reaping the benefits of the data center buildout, are hitting the pause button on tax breaks)

The U.S. government accused Chinese ​artificial intelligence companies of maliciously copying technology from American AI firms, ‌potentially complicating relations ahead of a planned meeting between leaders of the world's two biggest economies later this month – Reuters. (Why you should care – trade strain between the two nations started a decade ago due to concerns over intellectual property theft by China)

U.S. Treasury Secretary Scott Bessent challenged traders to counter his efforts to strengthen Japan’s currency, saying when he makes market calls these days he’s effectively doing so with inside information – Bloomberg. (Why you should care – Bessent’s efforts to stabilize the yen could remove one of the hedge fund communities’ favorite short trades to pair against longs like stocks)

The United States issued 36 Iran-related sanctions targeting the country's aviation sector and other companies as part of a broad ​push to escalate economic pressure on Tehran as the war in the Middle East has moved into a seventh month – Reuters. (Why you should care – the U.S. is seeking to get Iran back to the bargaining table to sign its peace proposal)

Chip maker Kioxia Holdings’ Chief Executive Officer Hiroo Ota brushed aside the likelihood of deeper ties with rival and stakeholder SK Hynix, while pledging to keep surging memory prices at bay to avoid denting long-term AI demand – Bloomberg. (Why you should care – Ota said prices have run too far, and companies should work to bring them back down)

Qualcomm said Amazon ‌could buy up to $60 billion of its AI data-center chips and related products under a long-term partnership, bolstering the chipmaker's effort to become a major supplier of AI infrastructure – Reuters. (Why you should care – under the agreement, Amazon and Qualcomm will work together to develop custom AI data center chips for inference)

Economic Calendar:

Earnings: COO

France - Industrial Production for July (2:45 a.m.)

U.S. - MBA Mortgage Applications (7 a.m.)

U.S. - ADP Employment Change (weekly) (8:15 a.m.)

Treasury Auctions $39 Billion in 10-Year Notes (1 p.m.)

ECB's Nagel (Germany) Speaks (1 p.m.)

ECB's Lagarde (President) Speaks (1 p.m.)

U.S. - American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)

Australia - Melbourne Institute Inflation Expectations for September (9 p.m.)