Global Stock Markets
The U.S. dollar strengthened to 158.36 yen on hawkish Fed signals and rising oil prices, while Houthi attacks on Saudi Aramco's refinery reduced Strait of Hormuz traffic by 33%. Mexico's USMCA protections kept tariffs below 5%, enabling record import share gains, though the U.S. declined to renew the trade agreement for a full 16-year term.
The U.S. dollar traded around 158.36 yen on Friday, heading for a 0.7% weekly gain as doubts over a Persian Gulf peace deal sparked safe-haven demand and pushed crude oil prices higher. Brent crude rose $1.31 to $83.80 per barrel following reports that a proposal between Iran and Oman could give Tehran control over inbound shipping through the Strait of Hormuz, a condition U.S. officials maintain they will not accept. Elevated energy costs fueled fresh inflation concerns across bond markets, lifting Treasury yields and supporting the greenback. The rebound erases a substantial portion of the dollar's drop on Monday, when joint intervention by Japanese and U.S. authorities knocked the currency down from near 163 yen to a 13-week low of 155.20. Rate expectations also shifted higher after a Financial Times report indicated Federal Reserve Chair Kevin Warsh is open to a September interest rate hike if inflation data remains sticky. Traders now await the U.S. nonfarm payrolls report on Friday, with consensus estimates predicting 80,000 jobs added in July alongside an unchanged unemployment rate of 4.2%.
Saudi Aramco extinguished a blaze at its Jazan refinery complex after Yemen’s Iran-backed Houthi rebels launched a targeted drone strike against the facility, according to cnbc.com. The attack caused no reported injuries, but it directly underscores the fragility of regional energy infrastructure during ongoing geopolitical friction. The strike coincides with stalled negotiations to reopen the Strait of Hormuz, a maritime chokepoint historically carrying roughly a fifth of global energy supplies. Traffic through the waterway fell 33% on Friday as Tehran demanded the U.S. lift its naval blockade, cancel sanctions, and withdraw regional military forces before restoring full access. Higher geopolitical risk premiums pushed crude futures up on Friday, even as prices dropped over 7% for the week. Brent crude futures gained over 1% to settle at $83.55 a barrel, while West Texas Intermediate rose about 1% to $78.18 a barrel. Iranian state media has since published a draft legislative plan that would explicitly ban U.S. and Israeli vessels from transiting the strait.
Freightwaves.com reports that preferential access under the USMCA has kept Mexico's effective U.S. tariff rate under 5%, leaving 88% of its exports duty-free while Chinese goods face a 33% average tariff. That tax differential pushed Mexico’s share of U.S. imports to a record 17% in early 2026, more than double China’s 7.2% share. Massive capital expenditure by U.S. tech hyperscalers—including Microsoft, Alphabet, Meta, and Amazon—is driving the boom. Computer and data-processing shipments under Chapter 84 doubled to roughly $200 billion on a trailing 12-month basis, completely explaining Mexico's trade surplus in that category. American buyers pay lower landed costs for Mexican components because the trade agreement shelters them from broad U.S. import tariffs that now average 10% overall. Capital is moving to the border. A Taiwan-based AI firm committed $450 million to Ciudad Juárez, and SpaceX plans a $16.8 billion semiconductor factory in Texas. Cross-border trucking fleets are reallocating capacity from traditional auto parts to higher-margin electronics moving through Monterrey, Tijuana, and Guadalajara. Mexico overtook China in 2025 as the top supplier of advanced technology products to the U.S.