Strait Traffic Falls to Multi-Week Low: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, equity futures point to a weak start for U.S. listed equities.

1. U.S. and Iranian forces have exchanged heavy missile and drone assaults, with Tehran targeting U.S. facilities in states across the Gulf on Sunday and saying it had again closed the vital Strait of Hormuz. The renewed violence casts further doubt on the future of an interim U.S.-Iranian agreement signed last month that aimed to ‌reopen the strait and end the war after a further 60 days of negotiations. (Reuters)

2. The number of vessels transiting the Strait of Hormuz fell to multi-week lows on Sunday, shipping data showed, as renewed strikes between the U.S. and Iran and attacks ‌on ships in the Middle East heightened safety concerns. Six vessels transited the strait on Sunday, ship-tracking data from Kpler showed, the lowest number in five weeks. (Reuters)

But the U.S. and Iran traded fresh barrages of strikes over the weekend, driving up oil prices as investors fretted about the disruption of crude shipments through the Strait of Hormuz. Brent international futures rose 3.8% to $78.89 a barrel and West Texas Intermediate U.S. futures climbed 3.7% to $74.04 a barrel in early trading on Monday. (Barron’s)

Last week, we shared with you that, amid renewed fighting between U.S. and Iran, our focus would remain on traffic passing through the strait and its implications for oil and other petrochemical prices, and potential supply chain pressures. The key will be the duration of this renewed slowdown and the degree to which it rekindles inflation pressures, which, for now, appear to have peaked in May. We’ll get confirmation on that with this week’s June CPI and PPI data.

Should the duration above go from days to weeks, more than likely the market’s recent ping-ponging on the number of potential rate hikes in the coming quarters will shift back to two. That would likely cast some renewed pressure on homebuilders and other interest rate sensitive sectors.

3. South Korea’s AI-fueled stock rally came under renewed pressure Monday as SK Hynix Inc. tumbled by a record 15%, underscoring growing investor concerns that the boom has become overstretched. Traders pointed to fears of lower-than-expected earnings and a rotation into the company’s newly listed American depositary receipts, which surged 13% in their debut on Friday. The selloff sent the benchmark Kospi index down 9% and triggered a market-wide trading suspension. Peer Samsung Electronics Co. dropped nearly 11%. (Bloomberg)

As a rule of thumb, TheStreet Pro Portfolio does not partake in company IPOs, but the above is likely to weigh on our position in Micron (MU), which we hold as part of our EPS All-Stars strategy. The expectation is that the memory market will continue to be in a supply-demand imbalance for some time with SK Hynix (SKHY) Chief Executive Kwak Noh-jung sharing his view that the global memory industry is heading for its worst-ever supply shortage in 2027. He sees demand for memory continuing to exceed the company’s ability to produce it well into the next decade despite aggressive capacity expansion.

Some may say that Noh-jung is talking his book, but Samsung (SSNLF) looking to hike memory prices by another 20% this quarter that pushes back on the likelihood earnings are poised to disappoint.

4. Taiwan Semiconductor Manufacturing Co. reported a 36% jump in quarterly sales, meeting elevated expectations while signaling global demand for AI computing remains intact. The main chipmaker for Nvidia Corp. and Apple Inc. reported revenue for the June quarter of NT$1.27 trillion ($39.6 billion), according to Bloomberg’s calculations, matching the average analyst estimate. It got a boost from a 68% jump last month alone. (Bloomberg)

What that report doesn’t say is that Taiwan Semi’s (TSM) revenue climbed 6% month over month and an accelerated year-over-year ramp in the trailing three-month revenue data from 28% in April and 30% in May to 36% in June. Given recent reports from research firms about Q2 2026 smartphone and PC industry volumes, we can conclude AI and data center silicon was the driving factor. Despite the pre-market red we are seeing on Monday morning, we see that as very supportive of the Pro Portfolio’s chip positions.

TSM reports later this week, and its outlook for H2 2026 will be a must watch event for us as will its comments about its capital spending plans. We would not be surprised to see TSM lift its outlook for chip shipments and its cap-ex plans.

5. Apple accused OpenAI on Friday of stealing secrets about products still in development, setting up a legal face-off between two of the world’s biggest tech companies. In a lawsuit filed in U.S. District Court for the Northern District of California, the consumer tech giant said OpenAI, a leader in artificial intelligence that has a new hardware business, had asked job candidates from Apple to share details about secret projects and to bring device components and prototypes to their interviews. Apple also accused an OpenAI employee of downloading internal documents from a laptop owned by the iPhone maker. That employee and OpenAI’s top hardware executive were named as defendants in the suit. Both used to work at Apple. (The New York Times)

No doubt this will be a drama that plays out over time. Our thinking is that it will implications for Apple (AAPL) are likely to be minimal as it has already pivoted to Google’s (GOOGL) Gemini and is bringing flexibility to AI model usability in its upcoming software releases. For OpenAI, it will bring some fresh questions about its planned hardware products at a time when others are entering the fray, and it heads toward its eventual IPO.

6. Saudi ⁠startup Riyadh Air is studying the purchase of between 25 ‌and 30 more Boeing 787 ⁠Dreamliners by exercising ⁠most of its contractual options with the U.S. planemaker, industry sources said. The carrier, ‌which last month staged its first commercial revenue flight, ordered up to 72 Boeing Dreamliners in ‌2023, including 39 definitive orders and options for ‌a further 33. An announcement that Riyadh Air is converting the bulk of those options into outright ‌purchases could come as early as next week’s Farnborough Airshow… (London South East)

Such an order would add to Boeing’s (BA) backlog and argue in favor of higher production levels in the coming quarters. That growing likelihood and the corresponding operating leverage was at the heart of our thinking when we added (BA) shares to TheStreet Pro Portfolio.

Here’s the thing: The Farnborough Airshow, which runs from July 20 to 2026, is the aviation industry’s premier global event and is a showcase for aircraft orders. That makes it a big potential catalyst for not only our BA shares, but for our Eaton (ETN) ones as well. While Eaton is well known for its role in electricity and power management, it still derives a sizable piece of its overall revenue and profits from the aerospace market, where it supplies hydraulics, fuel systems, power management, and engine solutions.

7. Economic data today per TipRanks: There are no fresh economic data points out today, however, ahead of Fed Chair Kevin Warsh’s two-day testimony that begins on Tuesday (July 14), the market will be listening intently to what Fed Governors Lisa Bowman and Christopher Waller say on Monday.

8. Companies reporting today per TipRanks: There are no market moving earnings reports expected, but we will want to be on watch for any earnings pre-announcements and their implications.

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At the time of publication, TheStreet Pro Portfolio was long AAPL, GOOGL BA, ETN and MU.