Middle East Tensions Keep Wall Street Gains In Check

Barry Adams
15 Jul, 2026
New York City

U.S. indexes rebounded for the second consecutive session as investors overlooked escalating tensions in the Middle East. 

The S&P 500 Index edged up 0.1%, the tech-heavy Nasdaq Composite inched higher 0.4%, and investors focused on the fresh batch of earnings. 

The West Texas Intermediate crude oil price increased 0.7% to $79.88 a barrel, and the Brent crude oil price advanced 0.8% to $85.41 a barrel as the U.S. and Iran exchanged military attacks over the Strait of Hormuz. 

Increasingly, commercial shipping companies are looking for alternative routes as the war in the Middle East shows no signs of ending, despite repeated claims by the U.S. president. 

In early February, the U.S. president claimed that the war on Iran, not approved by the U.S. Congress, would be over in a week, which was later extended to a couple of months. 

Israel started the war on Iran, and the U.S. joined the attacks on February 28, and the war has since dragged to its fifth month and has already cost the U.S. Treasury more than $70 billion.  

Moreover, the surge in crude oil prices has stalled global economic growth and stoked domestic inflation after gasoline prices at pump stations soared as much as 50% over the last five months. 

 

Cooler Inflation for Now, But Higher Prices Loom Large

Producer price inflation in June edged lower on a monthly basis, the first monthly decline since August 2025, according to the U.S. Bureau of Labor Statistics. 

The seasonally adjusted annual pace of inflation in June slowed to 5.5% from 6.0% in the previous month, supported by the weakening of energy prices.

The core rate of inflation, which excludes volatile food and energy prices, rose 0.2% on the month and 4.7% from a year ago. 

Market sentiment improved after the softer-than-expected U.S. inflation reduced expectations of a near-term interest rate hike. 

The annual pace of inflation eased to 3.5% in June from 4.2% in May as lower oil prices moderate energy inflation, according to the U.S. Bureau of Labor Statistics. 

On a monthly basis, consumer prices fell 0.4% from the previous month, marking the first monthly decline since 2020.

Fed's policymakers pay close attention to consumer and producer price inflation updates, but they prefer to follow the personal consumption expenditures price index, which generally understates inflation in the economy. 

For May, the PCE price index indicated a headline inflation of 4.1% and a core rate at 3.4%, and both measures are likely to weaken in June following this week's releases.  

 

U.S. Movers 

ASML Holding NV increased 3.3% to $1,835.01 after the advanced semiconductor equipment maker raised its sales outlook for the second time this year. 

Total net sales in the second quarter surged to €9.3 billion from €8.8 billion, net income edged up to €2.9 billion from €2.7 billion, and diluted earnings per share advanced to €7.59 from €7.15 a year ago.  

The Dutch equipment maker revised the 2026 sales outlook range to between €43 billion and €45 billion, from the previous estimated range between €36 billion and €40 billion. 

ASML also lifted its gross margin range to between 54% and 56% from the previous range between 51% and 53%. 

The company said it is planning to increase its production capacity by 30% in 2027 and 2028, meeting higher demand from the makers of advanced logic and memory chips. 

The company announced an interim dividend of €1.88 on August 5 and, in the second quarter, repurchased €1.1 billion of its shares under the current buyback program, which is ending in 2028.  

Pentair PLC plunged 23% to $58.50 after the water treatment equipment maker estimated weaker-than-expected results in the second quarter. 

The company guided revenue of $930 billion and adjusted earnings per share of $1.12, sharply lower than analysts' estimates available on FactSet of $1.14 billion and $1.48, respectively.   

Morgan Stanley increased 1.5% to $231.15 after the financial service company reported record revenue and profit in the second quarter. 

Net revenue in the second quarter increased to $21.4 billion from $16.8 billion, net income jumped to $5.6 billion from $3.5 billion, and diluted earnings per share increased to $3.46 from $2.13 a year ago. 

Resurgent markets in the second quarter contributed to the rise in trading revenue in the fixed-income and equities divisions. 

The institutional securities group's revenue rose to a record $11.0 billion from $7.6 billion, and the wealth management group's revenue rose to a record of $8.9 billion from $7.8 billion a year ago.  

Return on equity jumped to 20.7% from 13.9%, and tangible book value per share rose to $53.18 from $47.25 a year ago.