Major US stock indices closed lower on Tuesday. Following the market close, US Central Command announced that US forces had commenced a series of strikes against Iran in response to Iranian targeting and attacks on commercial shipping operated by civilian crews in international waterways. The US Central Command stated the strikes were a response to Iran's attacks on three merchant vessels transiting the Strait of Hormuz, calling Iran's aggressive actions "unjustified, dangerous," and a "clear violation of the ceasefire agreement."

US Markets

At the close, the Dow Jones Industrial Average fell by 155.84 points, or 0.29%, to 53,055.91. The Nasdaq Composite dropped 288.49 points, or 1.12%, to 26,121.16. The S&P 500 declined 54.19 points, or 0.72%, to 7,537.43. Memory chip stocks continued their downward trend, with SanDisk (SNDK.US) down 7%, Western Digital (WDC.US) falling nearly 8%, and Micron Technology (MU.US) dropping 4.7%. SpaceX (SPCX.US) shares fell nearly 7%. The Nasdaq Golden Dragon China Index closed 0.57% lower.

European Markets

Germany's DAX 30 index declined 362.34 points, or 1.40%, to 25,470.18. The UK's FTSE 100 gained 16.22 points, or 0.15%, to 10,667.99. France's CAC 40 fell 43.63 points, or 0.51%, to 8,436.24. The Euro Stoxx 50 dropped 79.26 points, or 1.24%, to 6,318.75. Spain's IBEX 35 decreased 38.31 points, or 0.19%, to 19,645.49. Italy's FTSE MIB index fell 475.64 points, or 0.90%, to 52,483.50.

Asian Markets

Japan's Nikkei 225 fell 2.12%, while South Korea's KOSPI Composite dropped 4.91%.

Currencies and Dollar Index

The US Dollar Index, which measures the dollar against a basket of six major currencies, rose 0.17% to 101.023. By the end of New York trading, one euro was worth $1.1419, down from $1.1443 the previous day. One British pound was worth $1.3363, down from $1.3395. One US dollar bought 161.94 Japanese yen, down from 162.06, and 0.8076 Swiss francs, up from 0.8050. One US dollar was worth 1.4195 Canadian dollars, down from 1.4209, and 9.6784 Swedish kronor, up from 9.6255.

Cryptocurrencies

Bitcoin fell over 1.2% to $63,466. Ethereum declined more than 1.7% to $1,775.52.

Commodities

Crude oil futures rose. The August WTI contract on the New York Mercantile Exchange gained 2.8% to settle at $70.44 per barrel. September Brent crude rose 3% to settle at $74.16 per barrel. Gains extended after settlement, with both Brent and WTI futures up more than 3%. Reports indicated the US revoked a general license that had allowed Iranian oil sales.

Spot gold fell to $4,106.6. Spot silver dropped below the $60 mark to $59.962.

Key Economic Developments

The US reinstated sanctions on Iranian oil. The US Treasury's Office of Foreign Assets Control announced the revocation of a general license authorizing Iranian oil sales, with wind-down transactions permitted until 12:00 AM Eastern Time on July 17. International oil prices rose in response. Iran has not yet responded. Anonymous US officials stated initial indications showed "Iran fired on three merchant vessels in the Strait of Hormuz in recent days," calling this behavior "completely unacceptable" with consequences to follow. The officials added that despite the escalation, US negotiators "continue to engage in good faith to reach a final agreement with Iran." US Treasury Secretary Besant had announced on June 22 a 60-day general license as part of the US-Iran negotiation framework, authorizing the production, delivery, and sale of Iranian oil. The announcement had exempted transactions related to Iranian crude, petrochemicals, and petroleum products until August 21, 2026.

The US trade deficit widened to its largest in over a year. The May goods and services trade deficit expanded 42.2% from the previous month to $77.6 billion, the largest since March 2025, as exports fell and imports rose. Commerce Department data showed May exports declined 3.2%, dragged down by a drop in non-monetary gold exports, while imports increased 3.3%. In prior months, oil and petroleum product exports boosted by the war in Iran had helped offset a sustained surge in capital goods imports related to domestic data center construction. The report showed oil exports continued to grow in May. Imports of computer accessories and semiconductors rose again, while imports of computers and telecommunications equipment fell. Recent PMI surveys suggest imports may also have been boosted by US firms stockpiling early to avoid war-related supply chain disruptions and price increases. The May trade data will help economists solidify their Q2 GDP estimates.

Corporate Updates

Meta Platforms Inc. (META.US) introduced a new AI image-generation model called Muse Image into its chatbots and Instagram. This marks the first such release since the company rebuilt its AI lab under Chief AI Officer Alexandr Wang. Muse Image will be embedded into Meta's social apps, including Instagram and WhatsApp. Users can generate images from text prompts or ask the model to modify existing pictures. All images created with Muse Image will contain an invisible watermark, and safety measures have been implemented to prevent users from creating content that violates Meta's terms of service.

Microsoft (MSFT.US) is transitioning some of its applications to use its in-house AI models, replacing those from OpenAI and Anthropic. The company is accelerating its push for AI autonomy to reduce reliance on external models and lower costs. According to sources, applications like Excel and Outlook have begun using Microsoft's proprietary MAI model to handle AI requests, currently processing tens of thousands of calls per week. These apps previously relied more heavily on models from OpenAI and Anthropic. While MAI still accounts for a small portion of overall AI calls, it indicates Microsoft is progressively integrating its own models into core products. Microsoft's AI head, Mustafa Suleyman, previously stated the company's goal is to reduce and eventually eliminate spending on Anthropic models. Beyond office software, the MAI model has been integrated into GitHub Copilot, and in-house speech-to-text models will be applied to products like Teams in the coming months. As Microsoft's preferential cooperation with OpenAI gradually expires, the company is hastening to build autonomous AI capabilities to enhance bargaining power and further reduce inference costs.

Amazon.com Inc. (AMZN.US) is returning to the US bond market to raise funds for its artificial intelligence infrastructure buildout. According to sources, the company will issue eight tranches of benchmark bonds with maturities ranging from 3 to 40 years. The initial price guidance for the longest-dated bond (maturing in 2066) is about 145 basis points above US Treasuries. The dollar bond issuance is expected to raise at least $25 billion. Barclays, Goldman Sachs, JPMorgan Chase, and Morgan Stanley are managing the offering. Proceeds will be used for general corporate purposes, which may include debt repayment, acquisitions, and capital expenditures. This is the latest in a series of large bond issuances by major cloud computing companies investing hundreds of billions of dollars in AI infrastructure. Investors have been actively subscribing, with order books often reaching multiples of the issue size.

Analyst Actions

Raymond James initiated coverage on SpaceX (SPCX.US) with a "Strong Buy" rating and a $800 price target.

JPMorgan raised its price target for Apple Inc. (AAPL.US) to $345 from $325.