Financial Markets

Walmart sales are slumping as US consumer spending pulls back, with the economic impact of tariffs and the United States’ tensions with Iran weighing on consumers, the big-box retailer’s most recent earnings report shows.

US same-store sales rose 2.6 percent in the second quarter, according to the company’s earnings released on Thursday, falling short of the 3.8 percent forecast by analysts at LSEG. That marked the slowest quarterly increase in six years.

The Bentonville, Arkansas-based retailer said heightened petrol prices are to blame for the slowdown in spending.

“When fuel prices increase and get above $4, perhaps there’s a psychological impact to that … consumers are making trade-offs,” CFO John David Rainey said on a call with analysts on Thursday.

Prices are continuing to jump. The average price for a gallon (3.78 litres) of petrol rose to $4.10 on Thursday, up from $4.07 a week ago, according to the American Automobile Association, which tracks daily petrol prices. By comparison, the average price was $2.98 when the US and Israel first struck Iran.

The big-box retailer also said it expected $2bn in incremental fuel-related costs above its original guidance.

Sales dropped in Walmart’s US pharmacy business and also dipped elsewhere. Overall, quarterly revenue rose 3.4 percent, the slowest pace since the first quarter of fiscal 2023.

Consumers are spending more in the checkout line — 1.1 percent higher than the previous quarter — but it is still well below the 3.1 percent jump this time last year.

That comes as consumer inflation ticked up last month by 0.1 percent from the month prior and 3.4 percent from this time last year, according to the US Labor Department’s Bureau of Labor Statistics (BLS).

The price of fresh fruit jumped 2.2 percent from a month ago, butter by 0.8 percent, and fresh fish by 1 percent, according to the BLS report.

This as overall retail sales dipped in July, dropping 0.6 percent, marking the biggest decrease since May 2025, according to the US Commerce Department data released last week.

Walmart also announced price cuts on Wednesday on 11,000 items, to be fuelled in part by the $2.9bn in tariff refunds it has received – a one-time boon – and a strategy also being deployed by rivals including Target.

Walmart said, however, that price changes took effect in July, so the effects might be more apparent in the company’s next earnings report.

“You don’t necessarily expect to have that offsetting benefit to the lower prices in the immediate period,” Rainey said.

However, fewer consumers are venturing into brick-and-mortar stores, with foot traffic increasing by 1.5 percent for the quarter, a drop from 3 percent in the previous quarter. However, Walmart’s e-commerce sales are on the upswing, with sales jumping 24 percent in the US.

As a result, Walmart upgraded its forecast for net sales growth, from 3.5–4.5 percent to 4–5 percent.

But that is limited because in-store sales are still the company’s premier offering.

“The bread and butter of the company is still in-store and in-person shopping,” Melius Research analyst Jacob Aiken-Phillips told the Reuters News Agency.

Mixed big-box earnings

Other big-box retailers also reported earnings in the last couple of days, with a pullback in consumer spending being an undertone. TJX, the parent company of TJ Maxx and Marshalls, reported sales growth of 1 percent for the quarter, a slowdown from 6 percent the quarter before.

“Our fear is that it relates to lower ticket [less purchases per shopping trip] given wider signs of consumer weakness and price increases over the last year-and-a-half,” William Blair analyst Dylan Carden told Reuters.

That comes alongside earnings from Target, one of Walmart’s closest competitors. On Wednesday, the Minneapolis, Minnesota-based big-box retailer reported net sales jumping 5.3 percent for the quarter compared to this time last year, at $26.5bn.

That was driven by a 3.6 percent rise in in-store traffic. The company has also cut prices over the last year on more than 10,000 items and received a $1bn tariff refund.

On Wall Street, Walmart is taking a hit on the heels of its earnings report, with shares down by 9.6 percent since the market opened. Other big-box retailers are lower, but not showing nearly as stark a drop. TJX stock was down 1.7 percent, and Target was down by 0.1 percent.

Opening statements in a landmark US case brought by a bipartisan coalition of 29 states against Meta – the parent company of Facebook and Instagram – began on Tuesday, with Colorado, California, New Jersey and Kentucky arguing that the company’s popular social media apps were designed in ways that harmed the mental health of young users.

The trial, which is expected to last several weeks, began in a US federal court in California before District Judge Yvonne Gonzalez Rogers. While there is an eight-person jury, the group is serving in an advisory role as Judge Rogers will ultimately decide the case.

Megan O’Neill, a deputy California attorney general, in her opening statement said that the company designed its products to “hook the users, hold them for as long as they can, harvest their data, and then hide the truth from the public”.

She added that it worked “especially well for kids”.

The lawsuit, which was first filed in 2023, alleges that Meta made decisions to design its apps to hook users and facilitate excessive use among the platforms’ youngest users. The coalition also alleges that the company collected data on children under the age of 13 in violation of federal law.

“Meta needed kids, and it needed to reassure the people who cared about those kids that the kids are safe,” O’Neill said.

‘Limited claims’

Meta has long pushed back on allegations against the Silicon Valley social media behemoth.

In a statement before the trial, a Meta spokesperson said the states’ claims are unsubstantiated, and the company stands by its record of creating strong protections for teenagers, including launching Instagram Teen Accounts in 2024, which limit who can contact underage users, as well as a feature that allows parents to set time limits on usage.

“The State AGs may call this a landmark case, but their limited claims are unsubstantiated and their financial demands are vastly disproportionate,” Stephanie Otway, a Meta spokesperson, told Al Jazeera in a statement.

“The AGs offer no proof anyone in their states was misled, claim benign features like having an additional Instagram account somehow harmed their residents, and attempt to penalize Meta for industry-wide challenges like age verification. Rather than sticking to the facts or the law, the states have instead decided to chase an outlandish payout.”

The potential impact on Meta’s bottom line is existential. The company could face fines as high as $1.4 trillion, which is just shy of its $1.5 trillion market cap. However, the coalition is seeking fines of roughly $200bn.

Meta has already been ordered to pay $942m in fines in a separate New Mexico lawsuit – $375m in civil penalties in a March jury verdict and $567m ordered by a judge earlier this month.

Meta has acknowledged that the lawsuits it faces, including those related to youth social media addiction, could lead to “substantial monetary damages or fines” in a Securities and Exchange Commission filing in January.

A long time coming

Meta, along with other social media giants, has faced a growing slate of cases across the United States, including from cities, states, school districts and even individuals.

The coalition of states is asking Meta to make changes to its platforms, including introducing new age restrictions and cutting the infinite scroll.

The case’s impetus came from a US Senate committee hearing in 2021, when whistleblower Frances Haugen, a former data scientist at Facebook, claimed that the company knowingly pushed products that could impact the health of young users as the Mark Zuckerberg-led company pursued higher profits.

Meta has repeatedly tried to end the coalition lawsuit, including in 2024 and as recently as June, when it sought summary judgement – a decision that a court might make without going to trial – which would have ended the lawsuit.

The case is impacting the company’s stock. On Wall Street, the social media giant is down more than 3 percent in midday trading.

The pay gap between executives and their employees has widened from 2024 to 2025, with chief executives making 312 times what their median worker earned, according to the AFL-CIO, the largest coalition of labour unions in the United States.

That’s up from the previous rate of 285 times the median worker salary for executives working in the companies listed on the S&P 500 index.

The figures were released on Thursday as part of the AFL-CIO’s annual Paywatch report, which tracks the growing gulf in wages.

The labour federation warned that the divide in pay risks having broader effects for the global marketplace. If CEOs are focused on increasing their paycheques, the AFL-CIO warned that they may be less concerned about the stability of their companies — or of the economy overall.

“Excessive CEO compensation contributes to growing economic inequality,” the AFL-CIO wrote. “It creates the risk that CEOs will make short-term decisions to maximize their pay, even if it hurts the company’s long-term health.”

In determining the executive-to-worker pay ratio, the AFL-CIO explained it had to exclude one outlier: the world’s richest man, Elon Musk.

In 2025, Musk made $158bn as CEO of the electric vehicle company Tesla — 2.5 million times more than the company’s average employee. His salary even dwarfed the company’s revenue for the year, which was $94bn.

That same year, the carmaker reported a 3 percent decline in revenue. Sales dropped by roughly 9 percent, as some consumers boycotted the company over Musk’s participation in President Donald Trump’s second administration.

Tesla also faced 11 vehicle recalls last year, accounting for 745,000 of its cars.

For the first half of 2025, Musk served as the head of the Department of Government Efficiency (DOGE), an office Trump established to oversee cuts to the federal workforce and spending.

He also oversees multiple business interests beyond Tesla, including the social media platform X and the rocket company SpaceX.

In June, the initial public offering (IPO) for SpaceX’s stock briefly ballooned Musk’s net worth, and he was listed for a short time as the world’s first trillionaire.

Including Musk, on average, the pay for a chief executive in an S&P 500 company jumped 1,700 percent last year to reach $3.1bn.

Excluding Musk, the increase was slightly more modest. Whereas in 2024 the average CEO pay was roughly $19m, in 2025 the figure increased by 21 percent to $22.8m.

That sum is nearly double the average compensation package for chief executives a decade ago.

Uneven distribution across industries

Different industries, however, saw varying ratios in executive-to-worker income.

The biggest pay disparity was in the manufacturing sector, with the average CEO making $696m and the average worker in the industry making slightly more than $93,000.

That amounted to a more-than-11,000 percent difference in their salaries. Tesla marks the biggest disparity in the sector, helping to drive the pay ratio higher.

The industry with the second-highest pay ratio was the arts, entertainment and recreation sector, where executives make an average of $24.6m, compared to an average of around $25,000 for median workers. The difference was a ratio of 1,057 to one.

One of the most stark examples of a pay divide was the coffee chain Starbucks, where the average worker made $17,279 — only $1,629 higher than the federal poverty line in 2025.

With CEO Brian Niccol earning north of $30m last year, experts estimate the pay ratio in the company is 1,794 to one.

The AFL-CIO’s report also showed that Amazon, Dollar Tree, FedEx, McDonald’s and Walmart workers are the largest recipients of social assistance programmes.

Amazon CEO Andy Jassy made 51 times more than the company’s average employee, while McDonald’s CEO Chris Kempczinski made 1,082 times more than the average worker at the Chicago, Illinois-based fast-food giant.

Trump posts surge in earnings

Thursday’s report also examined Trump’s income during the first year of his second term in office.

Trump’s campaigns for public office have largely hinged on his record as a businessman, and he has pitched himself to voters as uniquely qualified to address the country’s economic needs.

But critics have accused him of profiting from the presidency, whether through trademarks or policies favourable to his business interests, including cryptocurrency.

The AFL-CIO report found that Trump’s income surged 254 percent last year, over what he made in 2024, before his return to the White House.

The $2.2bn worth of income he earned in 2025 stemmed largely from World Liberty Financial, the Trump family’s cryptocurrency venture, and the sale of meme coins.

Those earnings are roughly 43,154 times what the median US worker made last year, according to the AFL-CIO. Approximately 37 percent of US adults cannot cover a $400 emergency expense.

This comes as US consumer sentiment slipped 8 percent, with consumers growing more wary of business conditions and the strength of their personal finances, according to a report from the University of Michigan released on Friday.

The labour market is also experiencing a downturn, with the US economy shedding 23,000 jobs in July, according to a monthly report from the US Department of Labor’s Bureau of Labor Statistics (BLS).

The Conference Board, a nonprofit think tank focused on the economy, also found last month that confidence in the state of the US economy is trending downward for the third consecutive month.

The stock was down more than 13 percent as investors were spooked by the company’s heavy investments.

SpaceX share price has plunged more than 13 percent, a day after the Elon Musk-run company reported its first quarterly earnings as a publicly listed company.

On Wednesday, the stock closed down at $108.10, down 13.6 percent from Tuesday’s close of $125.33.

Investors have been spooked by the increase in the company’s capital expenditure. At $18.37bn, it was a six-fold jump from last year, and much higher than the $13.2bn that analysts had forecast.

The majority of that investment, $15.8bn, is earmarked for artificial intelligence (AI) infrastructure, which includes specialised compute, storage, networking and software systems required to build, train, deploy and operate AI models at scale. SpaceX has said it wants to increase the capacity of its data centres from 1.4GW currently to 2GW by year-end.

Investors across the technology sector are questioning whether the large investments in AI infrastructure will actually yield returns.

“We’ve watched the same scrutiny land on Big Tech this earnings season, where investors have questioned open-ended wallets and started demanding a visible return on them,” said Josh Gilbert, lead analyst at trading platform eToro.

“SpaceX faces that test with an added degree of difficulty because it’s asking shareholders to bankroll data centres in orbit.”

SpaceX has said its computing capacity not only serves its Grok models but is also actively sold, with $14.1bn in cloud-services agreements lined up.

The one area that SpaceX saw some profit was from the “connectivity” business, with revenue jumping 66 percent from a year earlier as the number of subscribers to its Starlink satellite communications service doubled to 12 million, bringing in $1.66bn in operating income.

SpaceX’s share price faces another test on Thursday, when the first tranche of the post-IPO lock-up expires, making up to 911.5 million shares, roughly 20 percent of restricted holdings, eligible for sale.

Melissa Otto, head of Visible Alpha research at S&P Global, told Al Jazeera that the stock is “likely to be volatile” once the lock-up lifts.

SpaceX’s IPO was priced at $135 per share and climbed to $225 within days of its June 12 debut, briefly catapulting Musk as the world’s first trillionaire. The stock has since dropped.

The United States and Japan last week staged a coordinated intervention to halt the slide of the yen after the Japanese currency fell to a 40-year low against the US dollar.

While it is unusual for authorities to intervene to help prop up another country’s currency, the yen has an important role in international finance as the world’s third-most-traded currency, meaning its depreciation has repercussions far beyond Japan.

Here is everything you need to know about the currency intervention:

What is a currency intervention and how did the US and Japan coordinate?

A currency intervention occurs when a government or central bank buys or sells large quantities of foreign currency to help stabilise the value of its own currency.

In this case, the US and Japan coordinated an intervention to lift the value of the yen after it slid to 163 against the dollar for the first time since 1986.

The intervention began on July 31 when the US Treasury began selling euros for yen, while Japanese authorities also bought yen.

In the days after the intervention, the yen began to rise and reached 157 to the dollar on Wednesday.

The US last staged a currency intervention with Japan in 2011 when the yen began appreciating rapidly following the Tohoku earthquake and tsunami.

It also stepped in to support the Japanese currency during the Asian Financial Crisis in 1998.

How did the yen get so weak?

The yen’s collapse is the result of longstanding economic challenges combined with new pressures from the US-Israel war on Iran.

Japan has struggled with economic stagnation since the early 1990s.

The Bank of Japan has for decades attempted to stimulate growth with ultra-low and even negative interest rates, a policy that has exerted downward pressure on the yen.

While Japan’s weak currency has helped draw record numbers of tourists and kept exports cheap, it has also placed a strain on households by raising the cost of imported goods.

Tokyo has spent tens of billions of dollars since 2022 trying to defend the yen, but the economic policies of successive Japanese leaders, including current Prime Minister Sanae Takaichi, have partly offset these efforts.

“Takaichi wants it all: Growth, loose fiscal policy, loose monetary policy and a stable yen – but their policy mix is leading to a weak yen, which is causing an inflation problem,” Chris Turner, global head of markets at ING, told Al Jazeera.

Why does the US want a stronger yen?

While Japan is a close US ally, Washington stepped in for its own benefit as much as Tokyo’s, said Masahiko Loo, a senior fixed income strategist at State Street Investment Management in Tokyo.

“Washington isn’t trying to strengthen the yen for Japan’s sake. It’s trying to prevent a disorderly decline that could spill over into Treasury markets, global funding conditions, and broader financial stability,” Loo told Al Jazeera.

“A free-falling yen isn’t just Japan’s problem. At some point it becomes a global liquidity and financial stability issue, which is why Washington stepped in.”

The yen is the most traded currency after the US dollar and the euro, which means dramatic changes in its value can have ripple effects across the global financial system.

One of Washington’s biggest concerns is the prospect of Japan selling off its holdings of US Treasury securities, which were valued at $1.114 trillion in May.

If the yen continued to fall, Tokyo would be encouraged to sell large quantities of US Treasuries to raise cash it can use to defend the currency.

That would put upward pressure on interest rates in the US, raising the cost of servicing the country’s rapidly growing national debt, which already exceeds $39 trillion.

“The financial cost of intervention for the US is low and, given that President Donald Trump favours a weaker US dollar, the domestic political cost is minimal,” Shigeto Nagai, head of Japan economics at Oxford Economics, wrote in a research briefing on Monday.

“Coordinated intervention is a cost-effective method as it allows the US to do a significant favour for Japan, a precious loyal ally in Asia, and take some pressure off US interest rates.”

Will the intervention work?

While the joint intervention has provided short-term support for the yen, Japan will need to take more fundamental measures, such as raising interest rates, to raise the value of the currency in the long term, according to experts.

Japan’s benchmark interest rate currently stands at 1.0 percent, its highest since 1995 but far lower than other advanced economies, including the US.

The large gap between interest rates in the US and Japan is a primary driver of the yen’s persistent weakness.

Without a change in Japan’s low-interest-rate environment, the latest currency intervention is just “throwing good money after bad,” said Derek Tang, an economist and CEO of Monetary Policy Analytics, a US research advisory firm.

“Ultimately… the gravitational force of economic fundamentals will overwhelm intervention efforts,” Tang told Al Jazeera.

“Nevertheless, Japan seems very reluctant to tighten monetary policy to raise its own interest rates and allow the currency to appreciate in that manner,” Tang said.

“So this situation will persist for the time being.”

Oil prices fall as US officials tout progress in talks to reopen critical waterway.

The US stock market has hit an all-time high amid growing hopes for a deal to reopen the Strait of Hormuz and a flurry of bumper corporate earnings results.

The S&P 500, the most popular gauge of US stocks, surged 1.8 percent on Tuesday to top 7,700 for the first time, blasting past its previous record of 7,620.90 set on June 2.

Wall Street’s benchmark index has risen 12.80 percent so far this year, comfortably beating its historical average of about 10.5 percent.

Palantir Technologies, a data analytics company closely tied to the US and Israeli defence sectors, was among the biggest gainers, with its shares soaring 29.5 percent on the back of forecasting-busting second-quarter revenue of $1.94 bn.

The Dow Jones Industrial Average, which tracks 30 blue-chip companies, set a new record for a second straight day, climbing 1.7 percent to 54,085.88.

The rally continued in Asia on Wednesday morning, with key indexes in Japan and South Korea making major gains.

Tokyo’s benchmark Nikkei 225 was up 3 percent as of 01:00 GMT, while the Kospi in Seoul was up 4.6 percent.

Brent crude, the primary international benchmark for oil prices, edged lower after falling about 5 percent overnight on hopes for an end to the months-long disruption to shipping in the Strait of Hormuz, a conduit for about one-fifth of global oil supplies before the start of the US-Israel war on Iran in late February.

Brent futures for October delivery stood at $79.11 per barrel as of 01:00 GMT, down about 13 percent from the previous week.

The growing market optimism came as both US and Iranian officials touted progress in talks between Iran and Oman aimed at restoring shipping in the strait.

US Secretary of State Marco Rubio said on Tuesday that while an agreement had yet to be reached, he hoped that a deal would “happen very ‌shortly”.

US Treasury Secretary Scott Bessent said in an interview with CNBC that an agreement on the strait could be reached as soon as Tuesday or Wednesday.

Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, said talks with Omani officials on designating safe routes for vessels have been “positive”.

Maritime traffic in the Gulf has been severely constrained since the start of the war amid the threat of Iranian attacks on vessels in and around the strait, as well as a US blockade of Iranian ports.

Just nine vessels transited the critical waterway on Sunday, according to ship-tracking platform MarineTraffic, compared with roughly 130 daily crossings before the start of the war.

The US military said on Tuesday that the strait was “free and open” to all commercial vessels despite Tehran’s repeated insistence that it has the right to control the movement of traffic in the waterway.

“Over the past three months, US forces have assisted more than 1,000 vessels in successfully transiting the strait despite unwarranted Iranian aggression, and these transits continue today,” US Central Command said in a post on social media.

Revenue was up more than 90 percent from the same period a year ago, beating analyst expectations.

SpaceX reported a loss of more than half a billion dollars in its first quarterly statement as a public company, but the loss was less than Wall Street expected and revenue soared.

On Tuesday, the company run by Elon Musk reported a loss of $541m, or 9 cents per share, in the three months through June, less than half what financial analysts had expected.

Revenue jumped to $7.8bn, up more than 90 percent from the year-earlier period, beating analyst expectations. LSEG had forecast revenue growth of more than $6.9bn, and Bloomberg analysts had forecast $6.8bn.

The Starbase, Texas-based giant ended the second quarter with $100bn in cash, according to United States Securities and Exchange Commission filings.

The company touted several achievements in the quarter, including $6bn in new US government contracts for Starshield, its national security-centric satellite system, and two successful launches of its Starship V3 in the last 90 days.

Starlink and SpaceX’s broader connectivity operations remain the company’s primary financial engine, underpinning Musk’s push to build an AI-first business that extends beyond renting compute capacity to developing frontier models, consumer and enterprise software, and, eventually, data centres in space.

The company’s satellite-internet unit has continued to expand its global subscriber base, aided by launches of additional satellites and a growing range of consumer, enterprise, aviation, maritime and government services.

Investors are watching whether SpaceX can maintain growth while improving the economics of its network, particularly as it spends heavily to expand coverage, increase capacity and develop direct-to-device mobile services.

The company said it spent $18.37bn on Starlink and Starship expansion efforts, in addition to building out its AI infrastructure. Musk said the company expects its “Starmind” AI satellites to be launched next year.

In its AI business, the tech giant had an operating loss of $1.2bn, as the company also released its most powerful Grok model yet. This comes as the company faces lawsuits around the globe for Grok being used to generate sexualised images of people without their consent.

Separately, SpaceX said it had partnered with Nvidia to use its chips in the Starmind AI1 orbital compute satellites.

When SpaceX debuted on public markets earlier this year, it was the largest stock market debut in history, cementing Musk as the world’s first trillionaire. However, it was a short-lived title because of a sell-off in the broader AI sector and on investor worries that Musk had oversold them on the company’s future prospects for space travel and colonisation, among other issues.

The company’s stock has tumbled 8 percent since its IPO.

SpaceX surged on Tuesday trading. It finished the day up 9.4 percent, but has since tumbled in after-hours trading and was down 7.2 percent since the market close.

United States President Donald Trump has lambasted the nation’s biggest oil and gas giants as Houston, Texas-based Chevron reported record earnings while consumers struggle with soaring petrol prices.

“I don’t like it,” Trump told reporters on Monday in reference to the blockbuster second-quarter earnings, as his war on Iran has kept oil prices high for months.

“Chevron, too much money. ExxonMobil, too much. Too much money.”

Trump’s comments came on the heels of an interview Chevron CEO Mike Wirth gave on the Fox News programme Sunday Morning Futures with Maria Bartiromo. Writing on his Truth Social platform, the US president berated Wirth for not crediting his administration’s efforts to help the oil industry.

“The only thing he [Wirth] conveniently forgot to mention is that, without the genius, foresight, strength, and stability of the TRUMP Administration, the Oil Industry, and our Country itself, would be DEAD!”

Chevron reported its highest quarterly profits in six years on Friday. Adjusted earnings per share came to $6.06, or $12bn, as tensions between the US and Iran strained global oil supply chains in the strategically vital Strait of Hormuz, where roughly one-fifth of the world’s energy supply travelled through before the war, sending prices soaring.

Chevron rewarded its employees. Wirth praised them for their work and said in an email that most workers would receive a bonus equivalent to half their monthly base pay, the Reuters news agency reported, citing an internal email.

Al Jazeera has not been able to independently confirm Reuters’ reporting.

Chevron’s strong earnings come as the company is less reliant on Middle Eastern production operations than its competitors, allowing it to reap the benefits of higher global oil prices during the quarter. Brent crude, the global benchmark for oil prices, was 23 percent higher than in the first three months of the year.

“Being less dependent on the Strait of Hormuz is definitely helping them. It’s also the refining they’re able to do here. The fact that Chevron has less than 5 percent exposure there gives it some protection,” Bill Drolet, executive director, mergers & acquisitions at The Post Oak Group investment bank, told Al Jazeera.

“More than 70 percent of Chevron’s production is concentrated in America, and that’s where it’s making its biggest margins right now.”

Chevron also benefitted from the president’s move to open up oil production in Venezuela after US special forces abducted the country’s president, Nicolas Maduro, in January. Chevron had stayed on in the South American nation even after former President Hugo Chavez nationalised oil production.

Chevron did not respond to Al Jazeera’s request for comment.

Competitors also performed well. ExxonMobil on Friday posted its best quarterly profits in four years, but they fell short of analysts’ expectations. Earnings raked in $9.2bn.

Exxon did not respond to a request for comment.

On Thursday, Valero Energy reported its highest ever second-quarter profit, with net income coming in at $3.7bn as US refiners reap the benefits of tensions choking oil production across the Middle East.

But those benefits have not reached consumers, who are feeling the strain at the petrol pump. Petrol prices are above $4 a gallon (3.78 litres) across the US. The average price for a gallon of petrol is $4.09, down from $4.11 this time last week, but up from $3.82 a month ago, according to the American Automobile Association (AAA), which tracks daily petrol prices.

By comparison, when the US and Israel first struck Iran in late February, the average price was $2.98.

An analysis from Bank of America published in April showed consumers spending as much as 4.2 percent of their income on petrol in March, up from 3.9 percent in 2019. Lower-income earners are hit much harder, with more than 10 percent of households spending more than 10 percent of their monthly income on petrol.

This comes as pressure on the US Strategic Petroleum Reserve continues. The reserves hit their lowest level since 1983 this week, according to the Department of Energy. They fell by 2.8 million barrels over the week to 304.8 million barrels.

Political pushback

The condemnation of the oil industry has come from across the political spectrum.

“A decent industry would say, ‘this was money we didn’t earn, it’s a windfall we get from our cartel pricing scheme.’ Not these corrupt, greedy and grasping rogues,” Democratic Senator Sheldon Whitehouse of Rhode Island wrote in a post on X on Sunday.

But lowering prices might not be as easy. Beyond pressure from consumers, companies across the corporate United States are beholden to a concept called shareholder supremacy. This means that while lowering prices might be in the best interest of pinched consumers, it may not be possible given the legal framework and companies’ fiduciary responsibility to shareholders.

“They’ve [oil companies] got shareholders they’re responsible for. They could reduce share buybacks or dividend payouts, but right now, I don’t see oil companies doing much,” Post Oak Group’s Drolet said.

He said if he were advising a member of Congress or the president, providing relief to consumers might be easiest by suspending the so-called gas tax, which varies by state. In Texas, for example, the gas tax accounts for 20 cents per gallon, while in California, it is 63 cents per gallon.

“From a political standpoint, the best thing our government can do is suspend gas taxes, especially in California. If they put a temporary hold on taxes, that would help everybody get through this challenging time.”

Al Jazeera asked the White House if that policy is on the table, but the press office did not respond.

Heading into the US midterm elections, cost of living remains among the highest concerns for consumers. In a Washington Post/Ipsos poll last month, 54 percent of respondents said that high prices and the economy were a chief concern heading into November.

“They see the price of fuel and net profit for Exxon and Chevron and feel that they are abusing US consumers, especially as US consumers have access to the correct fuel, whereas other areas around the world have shortages [such as Germany, Philippines],” Babak Hafezi, professor of international business at American University, told Al Jazeera.

“The reality is that as the war [On Iran] progresses, the impacts of the lack of supply will create full price and supply shocks.”

Amid Trump’s comments, Chevron’s stock is on the downturn in midday trading, tumbling more than 2 percent from the market open. However, it is up more than 1.1 percent over the last five days.

ExxonMobil is down 0.5 percent for the day and 0.1 percent over the last five days.

Japan and the United States have confirmed a rare, coordinated yen-buying intervention to halt the Japanese currency’s slide to 40-year lows, with Tokyo signalling it is willing to take further action if needed.

The Japanese Ministry of Finance confirmed the joint intervention after a statement by US President Donald Trump on Sunday announced that Washington was helping to prop up the yen as a sign of friendship and to support the global economy.

“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan,” Trump said in response to a reporter’s query about why the US is helping to support the currency.

The yen leapt after the announcement, leaving traders on high alert for further intervention from authorities. The Japanese currency gained as much as 1.4 percent to hit a nearly three-month high of 155.20 per US dollar, compounding a 3.8 percent surge over the previous two sessions. The yen also advanced broadly against other major currencies, including the euro and sterling.

The latest bout of aggressive yen-buying heavily pressured the US dollar. In early Asian trading on Monday, the euro climbed to a 1.5-month high of $1.1559, while sterling hovered near a two-week top at $1.3476.

However, the rapid appreciation of the currency immediately weighed on the equity market. The Nikkei share average tumbled, reversing course from the one-week high it had achieved in the previous session.

Analysts say the intervention underscores both countries’ resolve to prevent global spillovers from a sell-off in the yen and Japanese government bonds, including by adding pressure on already rising US Treasury yields.

Japan has been struggling to curb a relentless drop in its currency that has pushed up import prices and stoked broader inflation, hitting household wallets and Prime Minister Sanae Takaichi’s approval ratings.

In its statement, Japan’s Finance Ministry said Friday’s yen-buying intervention with the US Treasury Department “countered excessive volatility and disorderly movements in the Japanese yen in recent months”.

“The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the U.S. Treasury,” it added. “We will not hesitate to conduct further joint intervention.”

The joint intervention is the first since a 2011 coordinated action to weaken the yen after the devastating earthquake in eastern Japan.

Tokyo may have sold as much as $58.97bn to buy yen when it intervened in New York markets on Thursday, Bank of Japan data indicated, before Friday’s confirmed joint intervention with Washington.

US Treasury Secretary Scott Bessent also confirmed Friday’s effort, noting on Sunday that Washington “will not hesitate to participate in further joint intervention”.

“We strongly support Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen,” Bessent said in a separate statement on X, repeating his calls for further interest rate hikes by the Bank of Japan.

In line with Bessent’s repeated calls for higher Japanese interest rates, the Bank of Japan on Friday offered its most explicit signal to date of an early rate hike, even as it kept monetary policy steady.

In a sign of broader policy coordination, South Korea also stepped in to buy its won currency on Thursday.

Japan intervened in April and May, buying yen, but the move triggered only a brief rebound. The Bank of Japan’s June rate hike to a 31-year high of 1 percent also gave the struggling currency little lasting boost.

GDP grew by 1.5 percent in the second quarter following a 2.1 percent increase in first quarter.

Economic growth in the United States slowed in the second quarter amid a growing trade deficit and tensions between the US and Iran which weighed on global fuel prices.

The US Gross Domestic Product (GDP), a measure of goods and services, grew by 1.5 percent between April and June, marking a slowdown from 2.1 percent growth in the first quarter of 2026, according to the Commerce Department’s Bureau of Economic Analysis report released on Thursday.

Consumer spending saw a bump of 3.2 percent for the quarter, both on the back of generous tax refunds from US President Donald Trump’s ‘One Big Beautiful Bill Act’ as well as heightened petrol prices that cost consumers.

Fuel prices are on the upswing after a brief reprieve. The average price for a gallon of petrol (3.78 litres) is $4.09, up from $3.84 this time last month, according to the American Automobile Association (AAA), which tracks daily petrol prices. By comparison, the average price was $2.98 when the US and Israel first struck Iran on February 28 .

Analysts also point to the artificial intelligence spending boom as a reason for the surge, even as those are heavily import reliant and contributing to trade deficits.

“Overall, the economy continues to rely on technology investment,” Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera.

That will likely continue into third-quarter reports, which will take into account the month of July. On Monday, it was reported that Nvidia is in talks to make a $250m investment in OpenAI.

However, there are concerns about how long such investments will last amid questions over circular financing propping up the sector.

“Data centres continue to drive investment and economic growth, increasing the sector’s role in the economy while raising questions about its sustainability,” Ziemba said.

Meanwhile, the Personal Consumption Expenditure Price (PCE) Index report, one of the US Federal Reserve’s key metrics for gauging the rate of inflation, increased 3.7 percent on an annual basis for the month of June after a 4.1 percent surge in May.

The slowdown was marked by a brief retreat in petrol prices last month before they climbed higher again over the past month.

“Today’s report is a snapshot of an economy under a ceasefire that no longer exists. Even with last month’s temporary inflation relief, prices are still elevated and families are saving less as they try to keep up,” Alex Jacquez, a member of the National Economic Council under former US President Joe Biden, said in a note provided to Al Jazeera.

On Wednesday, the US Federal Reserve opted to maintain interest rates at 3.5-3.75 percent.

US markets are on the upswing in midday trading, largely driven by an increase in Microsoft stock amid better-than-expected sales and growth in cloud services. Markets have also risen following the PCE and GDP reports.

The tech-heavy Nasdaq is up 2.6 percent, with the S&P 500 following at 1.2 percent and the Dow Jones Industrial Average up 0.5 percent.

Gold prices, which are typically considered a safe investment during economic uncertainty, extended their gains by 1.9 percent to $4,108.30 per ounce after rising 2 percent on Wednesday.

OpenAI CEO Sam Altman has met with US senators to discuss his company’s upcoming models, as President Donald Trump said he is considering AI “controls” following OpenAI’s disclosure that one of its AI systems escaped containment during a security test.

“We’re looking at controls,” Trump told reporters in the Oval Office in response to a question about OpenAI’s rogue agent, adding that he did not want to “restrict” AI developers from building new products.

A rogue agent escaped the handling of ChatGPT maker OpenAI and hacked the AI firm Hugging Face last week. Then, on Tuesday, it was revealed that a second company had been a target, too – Modal Labs, a New York City-based AI infrastructure firm.

The company itself was not hacked but an account of a customer hosted on Modal’s infrastructure. Modal’s chief technology officer, Akshat Bubna, did not confirm which customer was the target. The hack escaped a contained environment during a security test.

“We’re aware a Modal customer published an unauthenticated endpoint that allowed anyone on the internet to use their sandboxes for code execution,” Bubna said in a statement. “This was used by the rogue agent. Modal’s platform or isolation were not compromised in any way.”

Altman has long been accused of dismissing concerns that his products and the AI industry impact society at large, including in a recent lawsuit brought by the State of Florida that alleged the company put profits ahead of user safety.

Now, he appears to be walking back some of his past enthusiasm around AI’s pace of growth.

In a podcast called Invest Like the Best, Altman called the Hugging Face hack an “extremely sci-fi cyber incident” and later said that it was the “first security incident that I have felt very viscerally”.

“We may have to pace the rate of AI development to give ourselves enough time for society to harden around some of these new capability levels,” he said on the podcast.

On Saturday, Altman said that AI has reached “the singularity”, when AI surpasses human intelligence and becomes harder to control. He had previously said this would not be reached by 2030.

Washington meetings

Altman was in Washington, DC, this week, meeting with US Senators Raphael Warnock, a Democrat from Georgia, and Bernie Moreno, a Republican from Ohio on Wednesday. Altman told reporters that the hacking was discussed but was not the focus of the meeting.

Altman is also set to meet with Democratic Senator Mark Warner of Virginia, the top Democrat on the chamber’s Intelligence Committee.

CNBC reported that Altman is also to make a trip to the White House to meet with Trump’s chief of staff, Susie Wiles. Last month, the president signed an executive order requesting that AI companies assess their models before full release.

Financing concerns

The hacking and meetings come alongside pressure from Wall Street amid renewed concerns about potential circular financing, following reports that semiconductor chip giant Nvidia is undergoing talks with OpenAI to provide funding guarantees for a data centre in Ohio.

The $250bn deal would help the ChatGPT owner lease a 10-gigawatt project that SB Energy, a subsidiary of SoftBank, is building in Piketon, Ohio, 109km (68 miles) south of Columbus, Ohio. It is part of a public-private partnership that allowed SoftBank to build the world’s largest AI data centre on government land owned by the US Department of Energy.

“The demand is not as big as it appears to be because, again, the companies are buying from each other using their own money to some degree, as opposed to, say, OpenAI having such tremendous demand from customers, monetising it properly, and then using customers’ money to buy Nvidia chips. They’re essentially using Nvidia’s money to buy Nvidia chips,” said Aleksandar Tomic, associate dean at Boston College.

The development comes as the Altman-led company is leaning towards an initial public offering, which, according to reporting from The New York Times last month, could be in 2027.

The United States Federal Reserve is set to hold interest rates steady as inflationary pressures mount, driven by heightened fuel prices as tensions between the US and Iran continue.

The central bank said on Wednesday that it will maintain rates at 350-375 basis points during the second monetary policy decision under new Chairman Kevin Warsh.

“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability,” the central bank said in a statement upon the release of its decision.

CME FedWatch, which tracks the likelihood of monetary policy decisions, forecast a 66.3 percent chance of maintaining rates, while there was a 33.7 percent chance that rates would increase to 375-400 basis points.

Of the 12, three members, Beth M Hammack, Neel Kashkari, and Lorie K Logan, voted to raise rates by 25 basis points.

“My colleagues and I considered the economic shocks of recent years, strained supply chains arising from the pandemic, military conflicts, energy supply disruptions, substantial increases in tariff rates, and yes, the surge in AI-related investment,” Warsh told reporters.

“We are not relying on any one individual piece of data as cover or as an excuse, or as validation. What I care about and what I think the Committee cares about is trends on the data.”

Monetary policy decisions have become more uncertain as Warsh has scrapped forward guidance, which typically helps financial institutions and journalists better understand upcoming policy choices.

Flying blind

That is putting pressure on analysts.

“With little guidance on the reaction function under the new chairman, markets are filling the void with speculation that Warsh may be eyeing a surprise hike to reinforce anti-inflation credibility,” Barclays economists said in a note.

Citadel Securities earlier this week forecast a rate hike. Meanwhile, analysts at S&P Global forecast that rates would hold steady.

At the last meeting, the central bank’s governors were evenly split on whether to raise interest rates this year, as the central bank maintained rates during its first meeting under Warsh.

Warsh had previously said that there was “no tolerance” for inflation as the central bank pushes to reach the Fed’s 2 percent target.

Market shifts

Financial pressures on the broader market eased last month, with consumer inflation moderating. The Consumer Price Index report released in July for the month of June by the US Labor Department’s Bureau of Labor Statistics showed a 0.4 percent decline in consumer inflation, marking the first monthly decline since April 2020 in the early days of the COVID-19 pandemic. However, that was a correction from the previous month, when the CPI rose by 0.5 percent.

The CPI remains elevated at 3.5 percent on an annual basis, according to the report, though that is still a slowdown from 4.2 percent in May. However, consumers are still feeling the pinch, especially at the petrol pump.

Prices are on the upswing. The average price for a gallon of petrol is $4.09 ($1.08 per litre), up 3 cents from this time last week, and up from $3.86 ($1.02 per litre) this time last month, according to the American Automobile Association (AAA), which tracks daily petrol prices. By comparison, daily petrol prices were $2.98 ($0.78 per litre) when the US and Israel first struck Iran on February 28.

Those pressures are echoed by a slump in consumer confidence for the third straight month, according to The Conference Board, which released its report on Tuesday.

“Consumers anticipate little improvement in business conditions over the next six months,” Dana M Peterson, chief economist at The Conference Board, said upon the report’s release.

Political flashpoint

The decision is overshadowed by pressure from the White House. Interest rates have been a point of contention between Trump and the central bank. Trump has long pushed the Fed to cut rates, putting former Chair Jerome Powell in the crosshairs and making him the subject of investigations by the US Department of Justice.

But Warsh has yet to become a target of Trump’s scorn. “Kevin is fantastic,” he told reporters on Monday on board Air Force One. “He’s got a board, and the board members are very political.”

Trump made those claims despite the central bank’s longstanding commitment to maintaining its independence from political pressure.

EDITOR’S ANALYSIS

Houthi blockade for now is shaping who moves Saudi crude, not whether it moves, analysts say, even as oil prices soar.

As oil prices hit $100 a barrel on Thursday, experts say they are watching to see which vessels Yemen’s Houthis allow to pass through in the Red Sea as that will indicate how the crude market trends.

Brent futures rose $6.58 or 6.96 percent, to $100.65 a barrel, exceeding $100 for the first time since late May.

That was on the back of the Iran-aligned Houthis saying they were cutting off the passage Riyadh had been using to ship parts of its crude oil once Iran closed the Strait of Hormuz to retaliate against United States and Israel attacks.

On Monday, the Yemeni group declared a naval blockade on shipments from Saudi Arabia and said they would target Saudi, Israeli, and United States-linked tankers in the Bab el-Mandeb, which links the Red sea to the Indian Ocean.

On Thursday, the Houthis attacked two Saudi Arabian oil tankers, the group said, with a Saudi news agency later confirming that one of the two vessels was set ablaze.

It is not clear if the second one was also hit, according to marine analysis firm, Windward.

“The Houthis are quite mercurial and there is no complete clarity on what the blockade means,” said Michelle Bockmann, a senior maritime intelligence analyst at Windward.

“We’re watching now the ability of Chinese-owned tankers at [Saudi port] Yanbu if they are allowed to go through Bab el-Mandeb. Two have gone through but those had been loaded before the blockade was announced.”

The Houthis have previously relied on China for help, including for drone components, and “the Chinese have previously had a free pass”, said Bockmann, including between 2023 and 2025 when the Houthis attacked cargo ships aligned with Israel and the US in the Red Sea in the wake of the war on Gaza.

Windward tracking shows the cargo that moved through the Bab el-Mandeb chokepoint on July 20 was Saudi in origin but Chinese in crew and destination, and it drew no interdiction. The two vessels passed through the same corridor that Western- and Saudi-linked operators were being warned to avoid.

The enforcement is calibrated to affiliation rather than cargo and the blockade is shaping who moves Saudi crude, not whether it moves, Windward said.

“No one has ever been able to predict their actions… but they know you don’t have to do a lot to get the oil markets to react,” said Bockmann referring to the rise in benchmark oil prices on Thursday.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, underscored that the standoff in Bab el-Mandeb is happening while crude buffers have nor been replenished after the peak of the Hormuz crisis earlier this year.

“The multiple chokepoints are new and an example of littoral states looking to use their leverage,” Ziemba said.

Diesel also impacted

For now, both the Houthi threats and the continued closure of the Strait of Hormuz through which nearly one-fifth of the world’s oil transited before the US-Israel war on Iran, has sent prices soaring, including at the pump in the US reaching the national average of $4.09 per gallon (3.4 liter).

“Today’s rise in oil prices could cause $0.10 to $0.20 rise over the next week or two per gallon average price in US,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

But De Haan is looking beyond the two straits and says he’s watching the availability of diesel as price per gallon averages $5.34.

“Diesel prices are being impacted more significantly,” he told Al Jazeera.

One reason behind that is that Ukrainian drone attacks have taken offline some of Russia’s oil refineries. The shortages are being felt domestically leading to Russia banning diesel exports, De Haan said.

“Oil exports are one story, but supplies of diesel gasoline, jet fuel is another story,” he said.

Another unknown in the mix is the role of China which, historically has been a major importer but slashed those imports in the past few months, helping stabilise global prices as some pressure on demand eased.

“It’s been one of the reasons that oil prices haven’t gone up dramatically – that china slashed its imports, and no one predicted that,” De Haan said. “For now, we don’t know if china is using its own strategic reserves or if it will start import again.”

Between those geopolitical plays and the upcoming hurricane season in the US, there is “another wildcard ahead for global refining capacity” and prices, De Haan said.

Apple regained world’s top spot with $4.88 trillion valuation, overtaking Nvidia which saw a 3.5 percent market value drop.

Apple has surpassed chipmaker Nvidia as the world’s most valuable company as artificial intelligence-driven market pressures weigh on investors.

Apple is now worth $4.88 trillion compared with Nvidia’s $4.86 trillion, following a 3.5 percent decline in Nvidia’s market value. The milestone marks the first time the Cupertino, California-based iPhone maker has held the top spot in more than a year.

Nvidia was previously the world’s most valuable company after surpassing the $5 trillion market valuation mark in October.

Last month, Apple unveiled a revamped version of its assistant, Siri AI, which enables the personal assistant to better understand the personal context of users’ questions, access real-time information from the Web, and perform more complex tasks on behalf of users.

“Market sentiment has shifted from rewarding model makers, then to semis, and now on to those companies that can turn compute into experiences and outcomes the customer will pay for, thus driving corporate earnings,” Michael Monaghan, founder of Founder ETFs, told Al Jazeera.

“Apple investors first questioned Apple’s lower AI spend, but now have treated Apple’s lower AI capital expenditure as an advantage, with the bull case being that Apple benefits from consumer AI without spending at cloud-infrastructure scale.”

The surge comes in advance of the company’s third-quarter earnings, which are scheduled for release on July 30. Last quarter, Apple executives forecast sales growth of 14 percent to 17 percent.

Apple has long trailed competitors in the AI space and only publicly debuted its enhanced Siri last week. However, analysts believe the trove of personal data stored on the typical iPhone could become a major advantage for the company’s AI ambitions.

“This is a natural extension of Apple Founder Steve Jobs’ thinking of starting with the customer experience and working backwards to the technology needed to deliver the experience,” Monaghan added.

It comes as CEO Tim Cook is set to hand over the reins of the tech giant to John Ternus in September. Ternus has served as Apple’s head of hardware engineering since 2021.

Pressure on Nvidia comes amid increased competition in the semiconductor industry, with competitors such as Micron crossing the $1 trillion market valuation in May and South Korea’s SK Hynix joining the Nasdaq in May.

“The new entrants to the market could spread out the focus away from the pure Magnificent Seven names into a wider number of names,” Benjamin Hall, vice president of alpha research at Segal Marco Advisors, told the Reuters news agency.

Despite Apple’s surge, the broader market trended downward. The tech-heavy Nasdaq was down 1.6 percent in midday trading, while the S&P 500 fell 0.9 percent and the Dow Jones Industrial Average dropped 0.25 percent from Friday’s market open.

Oil prices have jumped amid the latest outbreak of hostilities between the United States and Iran over the Strait of Hormuz.

Brent crude, the main international benchmark, rose more than 4 percent on Monday as Washington and Tehran traded attacks amid their escalating standoff over control of the critical waterway.

Brent futures for September delivery stood at $79.26 a barrel as of 05:00 GMT, the highest since June 22.

US Central Command (CENTCOM) said on Sunday that it had carried out dozens of strikes on Iran to degrade its ability to attack vessels in the strait, hours after striking hundreds of targets in the country.

US forces launched the earlier round of strikes after accusing Iranian forces of “blatantly” attacking a Cyprus-flagged container ship, the MV GFS Galaxy, as it was transiting the strait.

“The Strait of Hormuz is a vital maritime corridor for global trade. Iran does not control it,” CENTCOM said in a statement late on Sunday.

“US forces are postured and prepared to ensure that freedom of navigation remains available to commercial shipping despite Iran’s continued unwarranted aggression, harassment, threats, and arbitrary declarations.”

Iranian forces on Sunday launched a wave of missile and drone attacks against the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain in response to the US strikes.

Iran’s Persian Gulf Strait Authority, which claims the right to control traffic through the Strait of Hormuz, earlier reiterated that vessels attempting to cross the waterway without using its preferred route would “not be covered by safe passage guarantees”.

“The consequences arising from transit through unauthorized routes shall be the responsibility of the owner, operator, and vessel commander,” the authority said.

After ticking up following Washington and Tehran’s signing of a memorandum of understanding on ending the war last month, maritime traffic in the Strait of Hormuz has declined sharply amid the renewed fighting between the sides.

Just six vessels were tracked crossing the strait between 18:00 GMT on Thursday and 06:00 GMT on Friday, compared with 18-22 daily crossings earlier this month, according to maritime intelligence platform Windward.

Nine vessels were tracked in the waterway between 18:00 GMT on Saturday and 06:00 GMT on Sunday, four of which were flying the Iranian flag, according to Windward.

Roughly 130 vessels transited the strait, a conduit for one-fifth of the global oil trade in peacetime, each day before the start of the war.

Oil prices, which had returned to pre-conflict levels following the signing of the memorandum on June 17, are now about 9 percent higher than before the US and Israel launched their initial strikes on Iran in late February.

Mukesh Sahdev, founder and chief oil analyst at XAnalysts in Sydney, Australia, said he expects the per-barrel price of Brent to remain in the upper $70s during August and September amid the heightened geopolitical uncertainty.

“There could be occasional spikes and dips outside that range,” Sahdev said in a note to clients on Saturday.

“Long-haul procurement forces refiners to make supply decisions weeks in advance,” Sahdev added.

“Those decisions have already reduced immediate reliance on the Middle East, and the latest escalation is likely to reinforce rather than reverse that trend.”

Fabien Yip, a market analyst at IG in Sydney, Australia, said prices are unlikely to approach the much higher levels seen earlier in the war despite the latest turmoil.

“Oil’s return towards pre-war levels in June reflected markets pricing in a best-case outcome for the fragile US-Iran arrangement; last week’s re-escalation exposes how fragile that assumption was,” Yip said in a note to clients on Monday.

“Near-term, the risk premium should keep prices supported, though a repeat of the earlier spike appears unlikely, as demand remains slow to recover while stranded-tanker releases and OPEC+ output quota expansion continue to add barrels to an already oversupplied outlook.”

Major Asian stock markets fell on Monday amid the renewed fighting in the Middle East.

Japan’s benchmark Nikkei 225 fell more than 2 percent in afternoon trading, while South Korea’s Kospi plunged more than 8 percent.

Hong Kong’s benchmark Hang Seng Index dipped about 0.2 percent.

Brent falls below $71 a barrel amid reports of progress in talks to end the war.

Oil prices have fallen to levels not seen since the start of the US-Israel war on Iran amid rising hopes for a breakthrough in negotiations aimed at sealing a permanent peace deal.

Brent crude fell more than 1 percent on Thursday to below $71 a barrel, returning the international benchmark to pre-war prices.

Brent futures for August delivery stood at $70.82 per barrel as of 04:30 GMT, lower than at any point since February 27.

Following the latest drop, Brent prices are down more than 38 percent from their post-war peak of more than $126 a barrel on April 30.

The slide came after Qatar, a key mediator between Washington and Tehran, said that US and Iranian officials had made “positive progress” in indirect talks aimed at resolving issues related to their memorandum of understanding (MoU) on ending the war.

US President Donald Trump also cast a positive light on the talks on Wednesday, saying the “denuclearisation of Iran is moving along well”.

Vandana Hari, the founder of the Singapore-based oil market analysis provider Vanda Insights, said a steady uptick in oil flows out of the Gulf and “cautiously optimistic geopolitical sentiment” had driven prices lower.

“Several key issues in the MoU remain unresolved, but the two sides appear to have backed off confrontation on the issue of the interim Hormuz transit regime, at least for the time being,” Hari told Al Jazeera.

“I expect crude to continue grinding lower until the backlog of stranded barrels has cleared, and prices could even swing into oversold territory,” she said.

“The real test of normalisation of Persian Gulf supply will come after that, necessitating fresh supply-demand balance recalibration.”

Shipping in the Strait of Hormuz, a conduit for one-fifth of the global trade in oil and liquefied natural gas in peacetime, has shown tentative signs of recovery in recent days after a sharp decline following attacks on two commercial vessels in the waterway on Thursday and Saturday.

At least 40 vessels transited the strait on Tuesday, according to data from MarineTraffic, up from 27 crossings on Monday and 22 on Sunday.

Maritime traffic nonetheless remains far below its pre-war level of roughly 130 daily crossings amid persistent concerns about safety in the waterway.

While Iran agreed to make its “best efforts” to arrange the safe passage of vessels in the MoU it signed with the US on June 17, Tehran has since repeatedly claimed the sole right to control movement through the strait.

At least 49 attacks on commercial vessels have been recorded in the strait since the start of the war, according to MarineTraffic, most of which were claimed by Tehran or blamed on its forces.

Brent crude rises after cargo ship comes under attack in key waterway.

Oil prices have jumped after the United Nations maritime agency called off its planned evacuation of ships stranded around the Strait of Hormuz following an attack on a cargo vessel in the waterway.

Brent crude, the international benchmark, rose as much as 4 percent on Thursday after the International Maritime Organization paused its evacuation plan amid renewed violence in the strait.

Brent futures for August delivery stood at $74.89 per barrel as of 02:00 GMT, after earlier dropping below $72.48, their closing price the day before the United States and Israel launched their war on Iran.

After dropping sharply following the US and Iran’s signing of a memorandum of understanding on ending the war last week, the price of Brent currently stands at about 3 percent above its pre-war level.

Asian markets opened lower on Friday, with key indices in Japan, South Korea, Hong Kong and Taiwan seeing steep losses.

Tokyo’s Nikkei 225 and Seoul’s Kospi both fell more than 3 percent in morning trading, while the Taiex dropped about 1 percent.

In Hong Kong, the Hang Seng Index was down about 1 percent.

The latest attack in the strait, through which about one-fifth of global oil and liquified natural gas supplies transit in peacetime, dealt a blow to hopes for a return to normal shipping in the region after a recent resurgence in traffic.

On Wednesday, 70 vessels transited the waterway, a more than twofold increase from the previous day and the highest daily figure since March 1, according to ship tracking platforms MarineTraffic and Kpler.

The United Kingdom Maritime Trade Operations (UKMTO) centre said on Thursday that a cargo vessel reported being struck by an “unknown projectile” on its starboard side while attempting to cross the strait near the Omani coast.

Multiple media outlets, including The New York Times, CBS News and the Reuters news agency, cited unnamed US officials as saying the attack had been carried out by Iran.

Iran’s Persian Gulf Strait Authority, which claims the right to regulate shipping in the strait, said after the attack that any vessel attempting to use routes outside its designated “framework” would not be guaranteed safe passage.

“The consequences arising from passage through unauthorized routes shall be the responsibility of the owner, operator, and vessel commander,” the authority said on X.

June Goh, a senior oil market analyst at Sparta in Singapore, said the attack was a reminder to markets of the fragility of peace in the strait amid the tenuous US-Iran ceasefire.

“There is a pressing need for tankers to enter and offload the high crude stocks from onshore tanks in order for normal production to resume again,” Goh told Al Jazeera.

“Thus, security of the passageway is paramount to recover the lost supply.”

Alan Greenspan, one of the most influential economic policymakers in modern US history, has died aged 100. Greenspan led the Federal Reserve for nearly two decades under four presidents, overseeing a long period of economic growth but also faced criticism linked to the 2008 financial crisis.

United States President Donald Trump has taken to social media to boast about the state of the economy amid a looming peace deal between the US and Iran, which yesterday signed a memorandum of understanding (MoU) to end the US-Israel war on Iran.

In a post on his social media platform Truth Social, the president claimed that “OIL IS FLOWING” and added that “THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!)”

While some of his claims are accurate, others are misleading. Al Jazeera takes a look:

‘Stock Market Just Hit A RECORD High’

That is true specifically for the Dow Jones Industrial Average. That index hit a record high of 51,999.67 for its close on Tuesday amid the potential of a ceasefire and a rally for the newly listed SpaceX.

The Dow slipped from that high on Wednesday amid the US Federal Reserve’s announcement that it would maintain the benchmark interest rate in the target range of 3.5-3.75 percent, and closed down on Wednesday at 51,494.99. The Dow has since jumped 0.35 percent in midday trading on Thursday at 51,671.

The Nasdaq Composite Index and S&P 500 both slipped.

However, this may not directly impact the 38 percent of Americans who do not invest in the stock market.

“The idea that the stock market is doing well does not reflect people’s experiences. There’s a saying that the stock market is not the economy, and that’s an important thing to keep in mind,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University, told Al Jazeera.

And that lived experience is at the petrol station and at the grocery store.

‘Prices are dropping’

Petrol prices have started to tumble in the last few days. The average price of a gallon of petrol (3.78 litres) on Thursday is at $3.99, according to the American Automobile Association (AAA), which tracks daily gas prices. That’s down from a high of $4.48 in May, but still well above $2.98, where prices were on February 28 when the US and Israel first struck Iran.

Despite the deal, experts believe that a petrol price decline will plateau for general consumers as the US strategic petroleum reserve, which earlier this week reached its lowest level since 1983, is refilled, all while oil extraction and shipping bottlenecks weigh on supply chains.

“The persistence of the price spikes is the key issue. Transportation, rerouting, insurance premiums, and manufacturing costs don’t normalise overnight, so even when oil stabilises, the cost base across the supply chain will stay elevated,” Tammy Kulesa, director of product marketing for supply chain execution at Blue Yonder, a supply chain management firm, said in remarks provided to Al Jazeera.

Mark Jones, professor of political science at Rice University in Houston, Texas, says prices will not return to prewar levels until the last quarter or close of 2027.

“Even once everybody believes the truce is going to hold [and] there’s no danger going through the Strait of Hormuz, those tankers take months to reach their final destination and come back,” Jones told Al Jazeera. “So the ability to replenish the stocks is going to take until, I think, the early fall [third quarter].”

Consumer inflation, which has jumped at the fastest pace in three years and is at 4.2 percent, has driven prices up on several key goods and has weighed on consumers. While energy prices have risen by nearly eight percent in the last two months alone, prices at the supermarket have jumped by 0.1 percent in May from the month prior after a 0.7 percent increase in April, with the highest increases in goods like bakery products, cereals, nonalcoholic beverages, as well as fruit and vegetables.

“There are real problems facing a lot of people. Prices are high, and wages have not kept up with prices. So people’s real purchasing power has fallen,” Klein said.

Supermarket chains have taken notice. Kroger, the largest supermarket chain in the US, said on Thursday that it will cut prices on thousands of products within its roughly 3,000 stores nationwide. This comes amid increased pressure from Costco and Walmart for value shoppers.

“Customers are being more deliberate with their spending and at times, shopping us selectively. We’re getting too many promotional trips and not enough of the full basket,” Kroger CEO Greg Foran said in a statement.

‘Jobs are at records’

Jobs are not at record levels, despite Trump’s assertions.

The US economy added 172,000 jobs in May. The highest during the second Trump term was 214,000, in March. By comparison, on average, 300,000 jobs were added monthly under his predecessor, former US President Joe Biden, a Democrat, with some months much higher – including July 2021, when the economy added 943,000 jobs, albeit that was on the back of the COVID-19 pandemic as businesses rushed to hire after massive layoffs.

Under Trump, there have been several months of limited job growth that have been hyper-focused on specific sectors like healthcare. On average, employers added only 15,000 jobs a month in 2025. Meanwhile, the US economy lost 92,000 jobs this year in February.

Layoffs are also on the upswing. Job cuts jumped 16 percent between April and May, marking the most layoffs since May 2020 during the height of the pandemic, according to Challenger, Gray and Christmas, with artificial intelligence (AI) as a driving force behind the cuts. Slightly more than 97,000 people lost their jobs in May.

‘Oil is flowing’

Overnight, 12.5 million barrels of crude oil travelled through the Strait of Hormuz, through which roughly a fifth of the world’s oil is normally shipped, according to US Vice President JD Vance. However, data from Kpler shows that travel through the strait is still low, with six verified crossings on June 17.

With the strait starting to open, oil prices tumbled to their lowest levels since the early days of the war as the temporary deal to end fighting and pull back sanctions elevated pressure on global supply.

Brent crude futures LCOc1 dropped $0.78 or one percent to $76.51 in midday trading.

Shipments of liquefied natural gas (LNG) have also ramped up, and a QatarEnergy LNG vessel has returned to Ras Laffan, where it has loaded more than 209,000 cubic metres, according to Kplr.

The value of Iran’s currency has risen by more than 15 percent against the US dollar, and its stock market has shattered records in the wake of the memorandum of understanding agreed between the United States and Iran on Sunday.

However, Iranians suffering for years from extremely high inflation and a plunging rial have found little economic relief as the prices of basic goods, such as food, remain high despite the diplomatic breakthrough.

The Iranian economy has suffered due to decades of US sanctions. The economic crisis was exacerbated after the US and Israel launched a war against Iran on February 28. As subsequent US naval blockade on Iranian ports further added to the misery of Iranians.

In Ferdowsi Street, the beating heart of Tehran’s foreign exchange market, the scene on Thursday was a stark departure from the panic of recent months. Exchange office boards flashed rapidly changing numbers as foreign currencies, led by the dollar, took a sharp dive.

“We closed our doors just hours before the official announcement of the US-Iran understanding at a rate of 1.8 million rials to the dollar,” Amir, a 35-year-old exchange office worker who asked to remain anonymous, told Al Jazeera. “Now it has fallen to 1.54 million rials, and we expect further declines.”

Amir noted a significant increase in sales volumes although buyers remained scarce as many anticipated the rial would strengthen further, potentially dropping to 1.4 million to the dollar or lower.

The recent gains mark a sharp turnaround. After the outbreak of the war, the exchange rate jumped to a historic peak of 1.9 million rials (190,000 tomans) to the dollar in March before settling at about 1.685 million just before recent attacks carried out despite a ceasefire.

A disconnect in the grocery aisles

Despite the rial’s recovery, a walk through Tehran’s grocery stores reveals a starkly different reality. For Iranians grappling with the economic fallout of crippling sanctions and the US naval blockade, the diplomatic thaw has yet to lower the cost of living.

Reza, a 42-year-old Tehran resident, told Al Jazeera that prices for daily staples like milk, cheese, cooking oil and flour remain unchanged. “They say the dollar dropped, but my shopping basket costs the same as last week,” he said. “This means the agreement hasn’t reached our pockets yet.”

From behind the cash register, 55-year-old shop owner Ramin echoed his customer’s frustration. He explained that while the government continues to distribute subsidised goods like bread, the fluctuations of the free-market dollar do not immediately impact basic food prices.

The value of the dollar on the free market varies from the official exchange rate.

Pointing to a shelf of imported goods, another shopkeeper named Karim noted that items like shampoo, toothpaste and laundry detergent are still locked at inflated prices.

“Distributors say they bought these goods two months ago at the old dollar rates,” Karim explained. “Prices will remain high until the old stock runs out and new goods enter at the lower exchange rates.” He estimated it would take at least two weeks for the market to adjust, meaning Iranians will continue to face compounding inflation in the interim.

Euphoria on the trading floor

While Main Street struggles, Tehran’s stock market is experiencing an unprecedented boom amid expectations of improved economic conditions. The trading floor has been awash in green since the initial leaks of the Washington-Tehran agreement emerged.

On Monday, the main index jumped by a record-breaking 161,000 points in a single session, marking the highest-ever influx of cash from individual investors.

By Tuesday, the market continued its staggering ascent, climbing another 112,000 points to cross the psychological barrier of 5 million, ultimately settling at a historic high of 5.1 million.

Saeed, a 40-year-old investor, called it a “historic day”. He noted that investors are rushing to buy shares in the energy and petrochemical sectors, betting heavily on the resumption of exports and the reopening of global markets.

However, Saeed remained cautiously optimistic. “The stock market is often driven by rumours,” he warned. “I don’t want to repeat the experience of the 2015 nuclear deal when the market soared and then collapsed after the US withdrawal.”

He was referring to US President Donald Trump’s 2018 withdrawal from the agreement, under which Iran agreed to restrictions on its nuclear programme in exchange for sanctions relief.

Stagnation in real estate and electronics

The wait-and-see approach in effect has paralysed other sectors of the economy. In central Tehran’s electronics hubs, 38-year-old shop owner Reza reported that while the prices of imported appliances have dropped in tandem with the dollar, sales have stalled because customers are holding out for steeper discounts.

A similar freeze has gripped the housing market. Nasrin, a 36-year-old real estate agent in northern Tehran, observed that a recent price surge that accompanied the initial truce has now given way to stagnation. Many property owners are clinging to inflated prices, seemingly unaware that the market dynamics have shifted, bringing property transactions to a virtual standstill.

‘Not a magic wand’

For macroeconomic experts, the mixed market signals are entirely expected. Hossein Selahvarzi, the former head of the Iran Chamber of Commerce, Industries, Mines and Agriculture, cautioned that the new agreement is “not a magic wand” capable of instantly fixing years of structural issues in the economy.

While the war severely damaged Iran’s infrastructure, Selahvarzi emphasised that the roots of the country’s economic malaise were firmly planted well before the bombing began.

“War is the enemy of investment, production, trade and public welfare,” Selahvarzi told Al Jazeera. He warned against the analytical mistake of believing that a peace memorandum alone would revive the economy.

“Ending the military confrontation does not necessarily mean the beginning of economic prosperity,” he said, stressing that restoring stability to the business environment remains the country’s most urgent priority.

“What we have before us is a limited and fragile opportunity to correct course and rebuild the economy, and this opportunity could be lost quickly if not managed correctly.”

Brent crude drops as much as 1.6 percent, while key stock indices in Japan, South Korea and Taiwan climb.

Oil prices have dropped following the United States and Iran’s signing of an interim peace agreement, resuming a slide interrupted by US President Donald Trump’s warning that he could restart his military campaign.

Brent crude fell as much as 1.6 percent on Thursday morning in Asia, returning the international benchmark to almost exactly where it was 24 hours previously.

Brent futures for delivery in August stood at $78.23 as of 04:00 GMT, only about 7 percent higher than before the US and Israel launched their war on Iran on February 28.

After several days of declines, Brent briefly spiked above $81 a barrel on Wednesday after Trump warned that the US could “go right back to dropping bombs” on Iran if it doesn’t “behave”.

Asian stock markets rallied on Thursday on renewed optimism for an end to nearly four months of disruption to global energy supply chains.

Japan’s benchmark Nikkei 225 and South Korea’s Kospi both hit all-time highs, gaining 1.8 percent and 1.4 percent, respectively.

Taiwan’s Taiex rose as much as 1.3 percent.

Hong Kong’s Hang Seng Index bucked the trend, dropping 1.7 percent.

US stock futures, which are traded outside of regular market hours and often foreshadow the next day’s performance, climbed, with those tied to the benchmark S&P 500 and the tech-heavy Nasdaq Composite climbing about 0.8 percent and 1.3 percent, respectively.

Pakistani Prime Minister Shehbaz Sharif, who mediated the negotiations between Washington and Tehran, said on Wednesday that the US-Iran memorandum of understanding (MoU) had entered into force with “immediate effect”.

Sharif said Iran would “instantly reopen” the Strait of Hormuz and the US would “immediately” lift its naval blockade of Iranian ports, though it was not immediately clear if the announcement had any effect on boosting maritime traffic in the critical waterway.

Shipping in the strait has been reduced to a fraction of peacetime levels due to the threat of Iranian missiles, drones and mines, as well as the US blockade.

While more than 500 vessels are estimated to be waiting to exit the Gulf through the strait, shipping companies have expressed concern about the lack of clarity on how to ensure the safety of their vessels and crews in the channel.

In a statement earlier this week, the Baltic and International Maritime Council (BIMCO), one of the world’s largest associations for shipowners, said the US and Iran had yet to provide information about “key aspects such as timings and safe routes”.

“Due to lack of details and a history of overly optimistic reassurances, we believe the security situation for the shipping industry remains volatile, and we still consider it very risky for ships to commence transits at this point,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement on Monday, responding to the initial announcement of the MoU.

“We advise shipowners to continue doing thorough risk assessments and appeal to all parties to put the safety of seafarers first.”

Brent crude drops to lowest price since early March before signing of framework deal to end US-Israel war on Iran.

Oil prices are continuing to drop, as hopes rise for a return to stability in global energy markets before the signing of a framework agreement on ending the United States-Israel war on Iran.

Futures for Brent crude due for delivery in August dipped nearly 1 percent on Wednesday, extending declines of about 5 percent on each of the previous two days.

The international benchmark stood at $78.24 a barrel as of 08:00 GMT, the lowest price since March 3, three days after the start of the war.

After rising more than 50 percent during the conflict, the price of crude on Wednesday afternoon in Asia was only about 7 percent higher than before the US and Israel launched attacks on Iran on February 28.

“The immediate prognosis, it seems, is optimistic and assumes no significant setbacks,” Tamas Varga, an analyst at PVM Oil Associates in London, said in a commentary.

“Over the last four trading sessions, Brent, for example, has fallen by $17 [per barrel], a discernible vote of confidence that the worst, at least as far as supply disruptions are concerned, is behind us,” Varga said.

Vandana Hari, the founder of the Singapore-based oil market analysis provider Vanda Insights, said that while the announcement of the US and Iran’s memorandum of understanding (MoU) has brought relief to markets, the “hardest part, on delivering the pledges and promises, is yet to come”.

“Crude’s slide is entirely sentiment-driven,” Hari told Al Jazeera.

“The market is front-running the prospective reopening of the Strait of Hormuz and likely pricing in the best-case scenario for the normalisation of flows, which means the potential hiccups from logistics to renewed geopolitical tensions are not being adequately factored in,” Hari said.

While many details of the MoU due to be signed on Friday remain unclear, Iran is expected to end its near-total closure of the Strait of Hormuz in exchange for the US lifting its blockade of Iranian ports, among other concessions.

The full reopening of the strait would be a crucial step towards restoring confidence in energy supply chains, after nearly four months of turmoil arising from the war.

Maritime traffic in the strait, which flows between Iran and Oman, has been reduced to a trickle due to the threat of Iranian missiles, drones and mines, reducing the global oil supply by an estimated 14 million barrels each day.

Even if the war does end, global energy flows are expected to take months to fully recover.

More than 500 vessels are estimated to be waiting to exit the Gulf through the strait, while the process of ensuring the channel is free of naval mines is likely to take weeks at a minimum.

Stephen Cotton, the general-secretary of the International Transport Workers’ Federation, said the signing ceremony scheduled to take place in Geneva, Switzerland, would be “at best the beginning” of a process of normalisation.

“The backlog of stranded vessels and the need for crew changes and rest mean a realistic return to normal shipping patterns is weeks, if not months, away,” Cotton said in a statement on Monday.