Index Surges, Natural Gas Skyrockets | TradeXYZ Weekend Market Watch

US-Iran Tensions

This weekend, Iran and Oman both stated that the shipping lane negotiations were close to completion. Oman also called on all parties to cease military actions in the strait area to facilitate the agreement.

What has truly stalled the negotiations is Iran raising the price for reopening the strait. Iranian Foreign Minister Alaragzi refused to resume direct talks with the United States, citing ongoing violations of the interim peace understanding agreement signed by both sides in June. Tehran's conditions include lifting the naval blockade, withdrawing U.S. forces deployed around Iran, lifting sanctions, unfreezing assets, compensating for war damages, and halting military actions against Iran and its regional allies.

These demands were previously more related to the nuclear agreement negotiations and are now being brought up before the strait's reopening. The Iranian Revolutionary Guard has stated that they will continue to control the strait until the other party accepts all conditions. The previously agreed-upon trilateral passage management arrangement involving Iran, Oman, and the U.S. has also been put on hold for several days, awaiting approval from Iran's top decision-making level.

Meanwhile, Trump has markedly toned down his rhetoric. On Sunday, he stated that the U.S. is handling the Iran issue "with low key," and both sides are only in a "semi-negotiation" state. The U.S. is currently observing Iran's high inflation and financial pressure and relying on the naval blockade to continue exerting pressure.

The diplomatic window has not closed yet, with both sides waiting for the other to make concessions. Meanwhile, the Houthi forces claimed to have attacked a Saudi Jizan oil refinery, and the UAE also reported that one of its oil company vessels was attacked by Iran.

Crude Oil / Indices

At 10:20 p.m. on Saturday night, Iranian President Pezeshkiyan stated that Iran is currently strong, united, and seen as the victor in the war, making it the best time to reach an agreement. CL subsequently experienced a short-term dip, reaching a low of around $76.48, but the oil price quickly recovered.

Early Monday morning, Trump's statement that "US-Iran is in a semi-negotiation" further confirmed that the U.S. has transitioned from military escalation to waiting for economic pressure to take effect. Oil prices then rose to around $79.12.

The two major indices performed steadily, with the S&P 500 and XYZ 100 rising by 0.13% and 0.22%, respectively. Against the backdrop of rising oil prices, the gains in the two major indices foreshadow a strong performance in the U.S. stock market.

Stocks

The storage sector saw mixed movements, with Micron rising by 0.44%, SanDisk by 0.66%, SK Hynix and DRAM dropping by 0.33% and 0.12%, respectively.

Optical communication performed the best, with MRVL and LITE both rising by about 2.4%.

Cryptocurrency-related stocks opened high and then fell but rebounded in pre-market trading. MSTR, CRCL, COIN, HOOD, and STRC all ended up in the green, with STRC continuing its upward momentum, returning to above $95.

Commodity Futures

Gold, silver, and copper all rose over the weekend, initiating a V-shaped recovery after the futures market opened. Gold was up by 0.29%, silver by 1.09%, and copper by 0.98%.

The commodity futures with the largest increase were natural gas, which rose by 3.10% after the opening bell, primarily driven by a mid-term heatwave. The heat dome over the southern and eastern U.S. is expected to last through the second half of August, leading to an anticipated increase in natural gas demand for power generation. Partial pipeline maintenance, a slight decrease in dry gas production, and high utilization of LNG export terminals are also tightening the supply-demand balance.