AI Rally Revitalizes Wall Street Amidst Declining Oil Prices and Iran Tensions Stirring Global Markets.

U.S. 10-year Treasury yields registered a slight decline ahead of wholesale inflation data, as markets continue to seek clues regarding the Fed's interest rate trajectory.### Top Headlines1. S&P 500 poised to break two-day losing streak as strong earnings from AI-focused companies reignite tech rally.2. U.S. 10-year Treasury yields edge lower, while a sharp decline in 2-year yields bolsters expectations for Fed rate cuts.3. Bitcoin tests $63,000 level amid selling pressure from short-term investors, as miners pivot to AI due to revenue squeeze.### SummaryDespite the Crypto Fear & Greed Index residing in the 'Fear' zone at 29, overall market sentiment signals a recovery in U.S. equities, led by AI-focused stocks. Macroeconomic data and bond market movements maintain uncertainty regarding the Fed's future interest rate decisions, while geopolitical tensions, particularly in the Middle East, continue to exert pressure on energy markets.### Macro & GeopoliticsU.S. 10-year Treasury yields held steady at 4.68%, declining by a modest 0.04% daily, or -0.2 basis points. In contrast, 2-year Treasury yields retreated to 3.96%, marking a significant daily drop of 5.01%, or -20.9 basis points. This divergence indicates some flattening of the yield curve, suggesting markets are reinforcing expectations for near-term Fed rate cuts. This decline in Treasury yields ahead of wholesale inflation data reveals investors are pricing in the possibility of a more dovish stance from the Fed.Oil prices declined amidst a weak demand outlook and rising U.S. inventories, while uncertainties surrounding the reopening of the Strait of Hormuz maintain expectations for a deepening global oil supply deficit by 2026. OPEC lowered its 2026 global oil demand growth forecast. Gold regained investor interest with more moderate inflation data and shifting Fed rate expectations, retreating slightly from a two-month high. The U.S. budget deficit expanded in July, and U.S. consumer prices are anticipated to show a moderate increase in July.On the geopolitical front, Iran remains a focal point. The UK and Italy are considering verifying Hezbollah's disarmament, while a major oil spill impacts Oman's coast. Saudi Arabia's Red Sea oil exports were disrupted as Houthi attack threats escalated. The Israeli military targeted a Hamas commander. Former President Trump's claims of "full control" over the Strait of Hormuz and reports of missile threats against him are escalating regional tensions. The EU and 26 countries condemned Iran's execution of protestors. Iran reported no progress in reviving the interim peace deal with the U.S. and insisted on the U.S. returning to the agreement. Saudi Arabia is investing in defense alliances. Putin warned that Russia would begin seizing EU vessels if the EU interfered with Russian ships. The UAE is facilitating oil exports from Iraq via the Strait of Hormuz. India warned that border tensions could negatively impact relations with China. Iran is expected to soon join the BRICS development bank, while maritime traffic in Hormuz declined to a one-week low due to hostilities. Ukraine struck grain terminals and a naval base in Russia's Novorossiysk port.Derivatives pricing suggests ongoing uncertainty regarding the number of Fed rate cuts in 2026, the timing of a potential Israel-Hamas ceasefire, and the likelihood of a US recession by the end of 2026. Futures and event markets also reflect skepticism about Ukraine's ability to recapture Crimean territory this year.### EquitiesThe S&P 500 is poised to break its two-day losing streak, with equities modestly higher as Goldman Sachs strengthens its asset management unit and oil prices fall below $90. Jim Cramer highlighted that the July CPI report matched expectations and CoreWeave's earnings indicated increased demand for Nvidia chips. Wall Street futures advanced ahead of July inflation data, while European equities remained stable. The Nikkei 225 surged to a record high, driven by a weak yen and the AI chip rally. AI data centers are boosting demand for Southern Copper. In Dow Jones futures, Cisco and Coherent were among the decliners, while Nebius, Lumentum, and CoreWeave led the AI rally. The Dow, S&P 500, and Nasdaq are trending upward in line with interest rate hike expectations and earnings. Michael Burry warned of a 1987-style crash. Cisco's AI-focused profit increased. Huntington Bancshares shares reacted negatively to analyst downgrades due to Q2 2026 margin concerns, while American Water Works outlined a long-term strategy for acquisitions and infrastructure investments, driven by growth expectations from its merger with Essential Utilities. Our indicator signals BUY (9.35) within a Trend Regime, featuring a 4.1/10 Momentum Strength.### CommoditiesGold retreated slightly from a two-month high as traders sought inflation clues. Oil prices declined amidst a weak demand outlook and rising U.S. inventories, while supply disruptions persist. Our indicator signals BUY (5.58) within a Trend Regime, featuring a 4.6/10 Momentum Strength for Gold. WTI Crude Oil prices, meanwhile, maintain a strong upward trend.### Digital Assets & CryptoBitcoin speculators are keeping BTC price below $68.7k, driven by weakness stemming from short-term holders' efforts to reach their break-even point. With easing U.S. CPI data, the probability of a September Fed rate pause has risen to 60%, while Bitcoin eyes the $63k level, though there's a warning that this level might fail as support. Bitcoin miners are trending near 10-year lows, earning less than 0.7% of their revenue from fees, and are pivoting to AI due to profit squeeze. Goldman Sachs announced NEOS will be acquired in a $2.25 billion deal, incorporating its $30 billion ETF business, including Bitcoin and Ether-linked income funds. Fidelity filed with the SEC to add staking to its Ethereum ETF, planning to retain 85% of rewards. Coincheck Group targets Japan's institutional crypto boom with a new infrastructure push. Kraken expanded its multi-asset offering by adding the S&P 500 to its funded trading program. The Bank of England is testing stablecoin and digital pound interoperability in cross-border payments. Wintermute is reportedly investing $1 billion in AI infrastructure and high-frequency trading as part of its expansion into traditional finance. Our indicator signals SELL (-3.7) within a Lateral Consolidation Regime, featuring a 0.5/10 Momentum Strength.### Strategic Asset Allocation1. Capital Inflow / Strong Sectors & Assets AI-Focused Technology Stocks (Strong earnings and increased demand for companies like Nvidia, CoreWeave, Nebius, Lumentum) Gold (Renewed investor interest due to moderate inflation data and shifting Fed expectations)2. High Risk / Underperforming / Liquidation Targets Bitcoin (Vulnerability at the $63,000 level due to selling pressure from short-term investors and miners' revenue squeeze) Energy Sector (Declining oil prices due to weak demand outlook, rising U.S. inventories, and OPEC lowering its demand forecasts)---Disclaimer: This intelligence brief is for informational and analytical purposes only. It does not constitute financial, investment, or trading advice.