Overnight U.S. Stocks | U.S. and Iran Demand Compensation from Each Other for Military Conflict Losses, International Oil Prices Surge 5%, Major Indexes Close Lower

Zhitong Finance APP has learned that on Monday, the three major indexes closed lower, international oil prices rose, and market confidence in a short-term agreement between the US and Iran to restore normal navigation in the Strait of Hormuz has significantly declined. US President Trump stated on social media that Iran is demanding compensation for losses caused by military conflicts over the past five months, but this demand has never been raised in previous negotiations. Trump said it was "an interesting idea" because now he is also demanding compensation from Iran for casualties in multiple conflicts, including victims of the USS Cole destroyer incident and other battle deaths. Trump also demanded Iran compensate the families of protesters suppressed over the past 50 years and claimed 52,000 people died in the conflicts over the past five months. Trump stated that he has instructed US representatives to formally raise related compensation demands in all future negotiations.

[US Stocks] At the close, the Dow Jones fell 60.949 points or 0.11% to 53,975.98; the Nasdaq fell 85.258 points or 0.32% to 26,605.35; the S&P 500 Index fell 4.53 points or 0.06% to 7,753.11. Apple (AAPL.US) fell 1.5%, SpaceX (SPCX.US) rose 4%, SK Hynix (SKHY.US) dropped 1.9%, and Intel (INTC.US) fell 4%. The Nasdaq Golden Dragon China Index closed up 1.65%, Alibaba (BABA.US) rose 3%.

[European Stocks] Germany's DAX30 index fell 26.68 points, or 0.10%, to 26,328.67; the UK FTSE 100 index fell 39.27 points, or 0.36%, to 10,861.82; France's CAC40 index rose 11.10 points, or 0.13%, to 8,726.03; the Euro Stoxx 50 index rose 10.39 points, or 0.16%, to 6,534.25; Spain's IBEX35 index fell 31.41 points, or 0.16%, to 20,155.69; Italy's FTSE MIB index fell 83.19 points, or 0.15%, to 53,634.00.

[Asian Markets] The Nikkei 225 Index rose over 2%, and the Korea Composite Stock Price Index rose 0.65%.

[US Dollar Index] The US Dollar Index, which measures the dollar against six major currencies, rose 0.27% on the day, closing at 99.809 in the late foreign exchange market. By the end of trading in New York: 1 euro exchanged for 1.1542 US dollars, down from 1.1564 USD in the previous session; 1 pound exchanged for 1.3509 USD, up from 1.3499 USD; 1 dollar exchanged for 159.24 yen, up from 157.55 yen the previous session; 1 dollar exchanged for 0.8101 Swiss franc, up from 0.8076 Swiss franc; 1 dollar exchanged for 1.3942 Canadian dollar, up from 1.3937 Canadian dollar; 1 dollar exchanged for 9.5016 Swedish krona, up from 9.4701 Swedish krona.

[Cryptocurrency] Bitcoin fell more than 1.4%, quoted at $64,119.55 as of press time; Ethereum fell more than 2%, quoted at $1,877.52.

[Crude Oil] The price of light crude oil futures for September delivery on the New York Mercantile Exchange rose $3.95, closing at $82.13 per barrel, an increase of 5.05%; the price of London Brent crude futures for October delivery rose $4.17, closing at $87.72 per barrel, an increase of 4.99%.

[Precious Metals] Spot gold rose 1.1% to $4,389.29; spot silver edged down to $65.71.

[Macro News]

Trump denies frequent communication with Fed Chair Walsh, says only spoke briefly since Walsh took office. On Monday, US President Trump stated that since Fed Chairman Walsh took office, the two have only conducted one "brief" conversation and denied reports of frequent communications. Last week, US White House National Economic Council Director Hassett stated that the two "often discuss economic issues," but other sources said the calls are neither regular nor frequent. Previous reports indicated that since Walsh was confirmed as Fed chair in May, Trump has communicated with him several times, asking for his forecasts and views on the economic outlook. Trump once again expressed his hope to lower interest rates but said he "100% supports" Walsh and emphasized that Fed policy is determined collectively by the Board of Governors.

Fed's Mester: Multiple rate hikes may be needed to curb inflation. Cleveland Fed President Mester stated that inflation has not yet returned to target and the Fed may need several rate hikes. She noted that a single 25 basis point hike "would not have much impact on the economy," but she was unwilling to predict the number of hikes or the final rate level. Mester believes that the current 3.50%-3.75% rate range has not imposed significant restraint on the economy, and companies have not reduced growth investments due to high rates, so "now is the time to act." She said the longer the wait, the harder it will be to bring inflation back to 2%. Mester also emphasized that the job market currently shows no obvious issues, and July's employment data will not change her focus on inflation. She believes the market can only assist the Fed but cannot replace the Fed's actions. Mester opposed keeping rates unchanged at the Fed's July meeting and leaned towards a 25 basis point hike.

Trump extends Jones Act waiver for 90 days, focus shifts to energy transport. Trump will extend the Jones Act waiver, which allows foreign ships to transport oil and other goods within the US, by 90 days but added new restrictions. With the Iran war disrupting crude flows and raising fuel costs, Trump continues the relevant waivers while narrowing their scope. The new waivers will focus on energy transportation, including gasoline, jet fuel, crude oil, naphtha, LNG, soybean oil, and fertilizers. In the future, the Pentagon must consult with the Maritime Administration before deciding on individual voyage waivers. The White House said the waiver helps ensure US troops and key industries have continued access to critical resources and increases domestic transportation of gasoline, diesel, and jet fuel. However, US shipbuilding companies and some members of Congress argue that the waiver weakens Jones Act protection for the domestic shipping industry.

[Company News]

NVIDIA announces partnership with six major financial giants to build a $500 billion AI infrastructure financing system. NVIDIA (NVDA.US) announced on the 10th local time that it has formed a strategic partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to create an independent computing power financing platform—mobilizing over $500 billion in third-party capital over the long term for building artificial intelligence infrastructure. NVIDIA stated that the new financing platform will turn NVIDIA computing and full-stack AI infrastructure into a global capital investable asset class, expand access to AI factories, achieve long-term revenue tied to usage, and support NVIDIA's ecosystem growth in hardware sales and software applications.

Morgan Stanley launches $1.5 trillion US Innovation Infrastructure Initiative focused on AI and other frontier technologies. Morgan Stanley (MS.US) announced the launch of the "US Innovation Infrastructure Initiative," planning to drive approximately $1.5 trillion in capital raising, financing, advisory, and related investment activities over the next decade to support the next stage of US economic growth. The plan will focus on strategic areas such as artificial intelligence, advanced computing, quantum technology, semiconductors, data infrastructure, cybersecurity, aerospace, defense, and critical minerals, while promoting the construction of digital, physical, and energy infrastructure. Morgan Stanley stated the initiative aims to support companies, technologies, and platforms vital to the US economy and national security, leveraging its investment banking, capital markets, wealth management, and investment management capabilities to assist businesses from startup to scale development.

[Major Banks Ratings]

UBS Group: Raises Berkshire Hathaway-B (BRK.B.US) target price from $585 to $604