Hormuz escalates into an infrastructure and shipping crisis

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Nine other stories

• Markets: oil rose as chip stocks extended their slide. The Dow fell 0.77%, the S&P 500 1.01% and the Nasdaq 1.40% on Friday. The semiconductor selloff came as crude jumped on the Middle East escalation and investors reassessed the durability of the AI spending boom. 4
• China: fuel prices move higher. From Saturday, Beijing will raise domestic retail price ceilings by 300 yuan per metric ton for gasoline and 290 yuan for diesel. The National Development and Reform Commission attributed the move to higher global crude prices as the U.S.-Iran conflict intensified. 5
• Hong Kong: Washington partially restores a special status. The U.S. Treasury will not renew a 2020 executive order that suspended Hong Kong's special economic and trade privileges, although other restrictions remain and 38 of 49 people covered by the order are still sanctioned. China welcomed the move as a step in a more positive direction. 6
• Europe: France and Germany deepen nuclear cooperation. Germany's conventional forces will join a French nuclear exercise before the end of the year, Chancellor Friedrich Merz said. Berlin will remain in NATO's nuclear-sharing arrangement; the move is intended to add a European layer as governments question the future shape of U.S. security guarantees. 7
• Ukraine: a leadership reshuffle lands during a new Russian strike. President Volodymyr Zelenskyy asked Major General Yevhen Khmara to take over defense-minister duties, but parliamentary approval may wait until the summer recess ends. The same night, a Russian missile strike in central Odesa killed two people and wounded 10, including a child. 8
• European banking: Brussels wants fewer cross-border barriers. The European Commission plans measures for the first quarter of 2027 to make bank mergers easier across the bloc and reduce political interference. One proposal could release about 230 billion euros in liquidity by allowing some capital and liquidity requirements to be met at parent-company level. 9
• U.S. regional banks: lending is holding up. U.S. Bancorp reported average loan growth of more than 7% year on year, Citizens Financial more than 5% and Regions Financial about 3% in the second quarter. Reuters said AI-infrastructure financing is lifting fee activity, but bank executives described demand as broader than data centers alone. 10
• China: floods hit a major manufacturing zone. Rescue workers evacuated 141 residents from an industrial district near Zhengzhou after heavy rain, using 21 boats and excavators to reach people trapped in homes, on roofs and on vehicles. The zone includes the world's largest iPhone manufacturing site; no deaths were reported in the Reuters account. 11
• World Cup: Argentina and Spain will play for a new prize as well as the trophy. FIFA will award championship rings for the first time in Sunday's final. The winning team will receive 30 custom rings; 1,996 of the 2,026 rings produced for the event will be offered to the public, with no price announced yet. 12

Quote of the day

We will have German conventional forces participate in a nuclear exercise conducted by the French armed forces before the end of this year.

Friedrich Merz, German chancellor. 7

Further reading

• Morning Bid: Chips and ships — Reuters' five-chart review of the energy shock, semiconductor volatility, bank earnings and the week's market moves.
• Degradation in progress — The Economist's July 18 weekly edition, led by an examination of the U.S. Department of Justice and the institutional consequences of its decline.