US Iran Hormuz Deal Signals Boost Risk Assets Amid Tech Capex Concerns

Prospects for Strait of Hormuz reopening lift global equity markets, while heavy AI infrastructure spending by SpaceX and AMD triggers post-earnings sell-offs despite revenue beats.

Woofun AI reports that US Treasury Secretary Yellen indicated a potential agreement with Iran to restore freedom of navigation in the Strait of Hormuz could be reached as early as Wednesday. The US Central Command confirmed the southern route remains open for commercial vessels, though diplomatic tensions persist with Iran accusing the US administration of escalating conflict risks.

In equity markets, investor attention shifted to technology earnings and capital expenditure levels. SpaceX reported second-quarter revenue exceeding expectations but saw its stock drop 7% in after-hours trading due to $18.4 billion in capital expenditures, largely for AI computing. Similarly, AMD’s stock declined after reporting an increase in capital expenditures to $808 million, reflecting market scrutiny on the conversion of infrastructure investment into revenue growth.

Additionally, Paramount Skydance raised its full-year profit guidance due to revenue performance exceeding Wall Street's expectations and growth in its streaming business.