Oil Jumps as Supply Risks Mount; Gold Climbs While U.S. Stocks Slip

Market Overview

Global markets traded Monday with investors focused on two primary themes: energy and interest rates.

First, renewed geopolitical tensions and supply concerns reignited the rally in crude oil. WTI September crude futures settled at $82.13 per barrel, up 5.05%, while Brent October crude futures climbed 4.99% to $87.72 per barrel. The U.S. Strategic Petroleum Reserve (SPR) fell below 300 million barrels for the first time since 1983, underscoring tightening supply conditions. With the timeline for reopening the Strait of Hormuz still uncertain, markets have once again begun pricing in the risk of supply disruptions. Natural gas also rallied, with U.S. natural gas gaining nearly 5% and European natural gas surging more than 10% intraday.

Second, precious metals extended their advance. COMEX gold rose 0.49% to 4,361.8, while silver jumped 2.8% to 65.106. Base metals also strengthened, with both copper and aluminum on the London Metal Exchange (LME) posting gains.

U.S. equities pulled back modestly from recent highs. The S&P 500 slipped 0.06% to 7,753.10, the Nasdaq Composite fell 0.32%, and the Dow Jones Industrial Average lost 0.11%. Apple declined 1.5% after multiple research firms downgraded the stock, with six institutions issuing sell ratings, the highest number since 2012. Meanwhile, the yield on the benchmark 10-year U.S. Treasury rose to approximately 4.70%.

Asian markets outperformed. China's Shanghai Composite advanced 0.67% to 3,966.59, while Hong Kong-listed Chinese equities moved higher, led by Alibaba, which gained around 3%. Taiwan Semiconductor Manufacturing Co. (TSMC) reported 44.7% year-over-year revenue growth for July.

Market OutlookSupply-Side Pricing Returns to the Forefront as the SPR Falls to Historic Lows

The U.S. Strategic Petroleum Reserve has dropped below 300 million barrels for the first time since 1983. Combined with ongoing uncertainty surrounding the reopening of the Strait of Hormuz, supply dynamics have once again become the dominant driver of oil prices.

If progress on reopening the shipping corridor and negotiations involving Iran remains slow, geopolitical risk premiums for both crude oil and natural gas are likely to persist. Investors should closely monitor the pace of U.S. SPR replenishment and whether OPEC+ adjusts its production strategy in response to higher oil prices.

AI Infrastructure Enters a Dual Race for Capital and Capacity

NVIDIA's collaboration with Wall Street to raise $500 billion, Microsoft's expansion of Maia 300 production, and Samsung's accelerated rollout of HBM4 memory all point to a simultaneous surge in capital investment and manufacturing capacity across the AI infrastructure ecosystem.

However, NVIDIA's recent share price decline alongside widening credit default swap (CDS) spreads suggests investors are beginning to reassess the risks associated with massive capital expenditures. Going forward, the key question will be whether these investments can generate sustainable cash flows and translate into long-term customer demand.

Key Events to Watch

• U.S. Treasury auctions of more than $100 billion in government securities from August 11 to August 13

• Reserve Bank of Australia (RBA) interest rate decision

• U.S. July Existing Home Sales report

• U.S. Energy Information Administration (EIA) Monthly Short-Term Energy Outlook (STEO)

• Earnings releases and conference calls from Lumentum and CoreWeave