Daily Financial Markets Review | Monday, August 3, 2026

Global markets are attempting to recover at the beginning of the week, with the sharp decline in oil prices providing support for both equities and bonds. S&P 500 futures are up approximately 0.6%, Nasdaq futures are gaining around 0.8%, and European futures indicate a positive opening of roughly 0.8%. Sentiment improved after the U.S. administration held off on additional military action against Iran and announced talks aimed at reaching an agreement and reopening the Strait of Hormuz. Brent crude dropped more than 4% to approximately $83.90 per barrel, while WTI is trading near $79.40.

The decline in oil is important far beyond the energy sector. Oil has become one of the main variables influencing inflation expectations, bond yields and expectations regarding future Federal Reserve policy. A sustained move toward $80 could reduce fears of another inflationary wave and allow Treasury yields to ease. The U.S. 30-year yield declined to approximately 5.24% this morning, although it remains at a historically elevated level that continues to pressure growth stocks and highly leveraged companies.

Wall Street ended Friday higher after strong results from Amazon and Microsoft eased concerns that enormous investments in AI infrastructure were failing to generate sufficient returns. The S&P 500 gained 0.7% to close at 7,489.72, the Nasdaq advanced 1%, and the Dow Jones rose 0.53%. Beneath the surface, however, the picture remains complicated. Apple fell 7.4% after warning about supply constraints and potential pressure on demand, while the semiconductor index remains more than 20% below its June peak. For July as a whole, the Nasdaq declined approximately 3.2%, while the S&P 500 was nearly unchanged.

Asian trading presented a sharply different picture and showed that concerns surrounding the AI sector have not disappeared. Japan's Nikkei declined approximately 1%, South Korea's KOSPI fell more than 5%, and the MSCI Asia-Pacific index excluding Japan lost around 1%. Investors continue to question whether massive spending on chips, memory, data centers and computing infrastructure will generate returns sufficient to justify current valuations. The rise in U.S. futures should therefore be viewed primarily as a relief reaction to falling oil prices, rather than confirmation that the technology correction has ended.

In foreign exchange markets, the Japanese yen strengthened sharply following rare coordinated intervention by Japan and the United States. The dollar declined to approximately 156.5 yen, compared with levels close to 164 in recent weeks. The operation has temporarily halted the yen's decline, but the sustainability of the move will also depend on Bank of Japan policy and the possibility of additional interest-rate increases. A softer dollar is supporting precious metals, with gold rising approximately 0.7% to $4,069 per ounce and silver gaining 1.4% to around $58.50.

Cryptocurrencies have so far failed to join the broader recovery. Bitcoin is trading near $62,700, while Ethereum is around $1,625. These relatively weak levels reflect the crypto market's sensitivity to reduced liquidity, elevated bond yields and weakness in technology shares. Until Bitcoin recovers and holds above the resistance areas that were recently broken, it is difficult to view the cryptocurrency market as a clear signal that investors are returning aggressively to risk assets.

In Tel Aviv, Sunday's session ended with solid gains. The TA-35 rose 1.32% to 4,149.5, while the TA-125 advanced 1.25% to 4,071.76. The dollar is trading near 3.055 shekels, following an official exchange rate of 3.057. Lower energy prices are particularly supportive for the Israeli economy because they reduce both inflationary pressure and import costs. Nevertheless, the domestic market will remain highly sensitive to progress—or failure—in the talks between the United States and Iran.

Today's U.S. session will focus on manufacturing activity. The final S&P manufacturing PMI will be released at 9:45 a.m. Eastern Time, followed by the ISM manufacturing index at 10:00 a.m. The ISM is expected to rise to 54 from 53.3, while construction spending is forecast to increase by 0.3%. An unusually strong ISM reading could push Treasury yields and rate-hike expectations higher, while a moderate result combined with lower oil prices could support equities. Palantir's results after the closing bell will also be closely watched for their potential impact on sentiment toward AI and software stocks.

From a professional perspective, the opening tone is positive but remains fragile. Lower oil prices temporarily remove some inflationary pressure, but they do not resolve concerns regarding elevated valuations, semiconductor volatility or uncertainty surrounding Federal Reserve policy. As long as oil continues to fall and Treasury yields remain contained, the market may extend its rebound. A breakdown in negotiations with Iran, a renewed surge in oil or an exceptionally strong ISM report could quickly reverse the current sentiment.