South Korean stocks plunged on Tuesday as concerns over circular AI financing and China's expanding DUV lithography capabilities (read here) were top of mind among investors. Adding to the pressure, chipmakers may not have found a floor just yet because Silicon Data's LLM Token Expenditure Index continues to slide, suggesting that companies are shifting toward cheaper models, particularly open-source alternatives from China.
Top Overnight News
The Kospi index follows a weak US session lower, falling as much as 10.7% heading for the worst session since early March as both Samsung Electronics and SK Hynix slid more than 12%. Korea Exchange triggered a circuit breaker for the benchmark, marking its…
The Kospi tumbled nearly 11%, with Samsung Electronics and SK Hynix dropping more than 13% each, prompting the Korea Exchange to temporarily halt both cash and program trading for 20 minutes.
South Korea's main equity index has now lost nearly 34% from its peak one month ago, reversing a rally into a vicious bear market. Concerns over AI profitability, Chinese semiconductor competition, forced deleveraging and evaporating liquidity have accelerated the selloff.
Notably, eight of the Kospi's 14 circuit-breaker halts since the Dot-Com era have occurred this year.
Beyond circular AI financing and China potentially catching up in the chip race, weakening AI demand indicators via Silicon Data's LLM Token Expenditure Index only suggest a bottom for chip stocks has yet to materialize.
London-based UBS analyst Joe Dickinson commented on the chip stock selloff, saying it "drives sharp risk-off moves across global markets."
Dickinson added more color:
The KOSPI is down 11% following a weak US handover, dragging the MSCI APAC down 3%, led largely by semiconductors and supply chain proxies. The move was catalyzed by weakness in ASML following reports that China has begun domestic DUV tool production.
Ha SeokKeun, chief investment officer at Eugene Asset Management, said, "Sentiment toward Korean semiconductor stocks is extremely weak. Broad risk-off sentiment, forced deleveraging, widening hyperscaler CDS spreads, and deteriorating retail investor sentiment are all adding to the selling pressure."
One day the hyperscaler bond meltdown will end, but not yet.... not yet.
Unprecedented carnage in AI IG CDS continues, matched by another 3bps sweep wider (to a new record) in the hyperscaler CDS basket. pic.twitter.com/7xxTsJ7fty
The selloff is also driven by doubts about whether hyperscalers can justify their massive Capex plans, and the token index continuing to slump lower may only suggest a sustained migration toward lower-cost models (read here) could undermine forecasted demand for computing and threaten the investment boom cycle that fueled gains in Samsung, SK Hynix, TSMC and other chipmakers.
Tyler Durden Tue, 07/28/2026 - 07:45By Molly Schwartz, cross-asset strategist at Rabobank
President Trump spoke with reporters yesterday aboard Air Force One, saying that the US is “meeting with Iran” and that “good things could happen”—with the “could” doing some heavy lifting. What the “good things” are, or when they “could happen,” is still TBD. The other alternative is that “if they don’t work out, [the US] will go back to very strong military action.” That, of course, is dependent on whether or not these talks are actually happening (or at least happening with the people who matter) which Iran currently denies.
We heard announcements over the weekend that Trump was “pausing” strikes on Iran. But that doesn’t mean that Iran has paused strikes against its neighbors. Indeed, Jordanian and Israeli military forces both claimed to have intercepted drones in Jordanian airspace early yesterday morning, while sources from Saudi Arabia said that they intercepted drones launched by Iran-backed militias operating in Iraqi territory.
Markets, however, were seemingly unmoved. Brent crude oil futures traded sideways around $90/bbl after gapping lower on the open, while US rates were similarly sluggish. However, the US yield curve continues to flatten, now at 22bp down from recent heights of 73bp, seemingly poised to flatten further as short-term inflation and Fed hike expectations rise. Re-escalated tensions last week led to a sharp spike in 2-year breakeven yields, up more than 21bp from July 23, back to 2.16%. Meanwhile, the US OIS curve signals investor expectations of a hike by the September FOMC meeting, and more than two full Fed hikes by March of next year.
Trump is not taking a note from Warsh with regard to his philosophy on limiting communication on monetary policy, also making his stance on interest rates and the Fed very clear yesterday. Predictably, Trump re-emphasized that he thinks “rates should be lowered,” but qualified that “you need a consensus from people,” highlighting that “Warsh is great, but he has a board.” The tone came across as softer than that he used when speaking of Warsh’s predecessor (perhaps giving Warsh some wiggle room to hold rates (or hike?)), but the bar for softer rhetoric in this instance is on the floor.
In his recently published FOMC preview, Talking about hikes, Rabobank’s Philip Marey writes that hikes are not part of his own Fed forecasts. Still, he expects plenty of chatter around them, both in markets and within the FOMC itself. He points to Kevin Warsh’s desire for a “good family fight” and the possibility of dissents in favor of hikes at the upcoming decision.
While Kevin Warsh does technically need a consensus to come to an interest rate decision, the current composition of the FOMC still appears to favor the doves. A look at where members generally sit on Bloomberg’s Hawk-Dove spectrum suggests an even five-to-five split, with the remaining Board members clustered closer to the middle. However, that headline balance overstates the hawks’ practical position. Warsh sits firmly on the dovish side and, as Fed Chair, has additional influence in shaping the policy discussion and building consensus. More importantly, the voting arithmetic is tilted in the same direction: five of the dovish members are voters, while only two of the more hawkish members currently have a vote, with the others either non-voters or alternates. So, unless the hawks can bring centrists with them, the balance of votes is likely to remain firmly with the doves, raising the bar for hikes even further.
That said, hikes are not entirely off the table. While energy prices have fallen by around $10/bbl from last week, a full-scale re-escalation and persistent disruptions to the Strait of Hormuz, and the Bab el-Mandeb Strait, could fuel inflationary pressures in the US. Marey writes that “if inflation expectations become unanchored…we may have to pencil in a hike later this year and push the rate cuts further into the future.”
On the other side of the Atlantic, Brussels is still grappling with the prospect that “cold shoulders” and civil discourse are not always the most effective strategies, not only when dealing with an adversary like Russia, but also when trying to wrangle EU members to make any decision. The EU’s proposed sanctions package against Russia failed to pass last week after Greece refused to sign off unless a carve-out was made to allow Greece to continue to transport Russian LNG.
EU officials were furious. According to the Financial Times, one EU official said that “this approach does not work any more” while another lamented that they “don’t want to hear anyone talk about ‘solidarity’ any more.” Still, as Trump put it, “good things could happen.”
Perhaps that means Greece eventually signs off on the sanctions package; perhaps it means a more durable de-escalation further down the line.
For now, though, markets are left trading the gap between what could happen and what has actually happened.
Tyler Durden Tue, 07/28/2026 - 07:28Futures extend Monday's losses as the Tech tape continues to unravel; global Semis were hit yesterday and again overnight (despite the best attempts of Goldman and JPM to force retail to buy the falling knives) with Asian stocks and especially Korea (-10%) bearing the brunt with fears of Chinese competition accelerating the sell-off and then spilling back over into the US. As of 7:00am ET, S&P futures are down 0.2% with tech slammed pushing the Nasdaq 0.9% lower and leaving the index set for a five-day run of losses for only the second time this year. Semis are again lower pre-market led by weakness in Nvidia, Intel and Micron, while Mag7 names are mostly bid and outperforming. While Defensives are leading Cyclicals, there are bids to Discretionary and Financials as both sectors look to outperform. As JPM writes in its Market Intel post this morning (available to pro subs), the market is swept in a risk-off tone (where all the news continues to be sold) that is continuing both the broadening in the US and a rotation ex-US where EU may continue to outperform as investors tilt towards Value; the $64 trillion question remains when do Semis / AI find a bottom. There is some good news as expectations (because they certainly are not taking place) of US, Iran negotiations are reducing commodity prices. As such yields are down 3bps, the USD is flat, and commodities are weaker led by Energy and Precious with Base and Softs the outperformers. Today’s macro data focus is on the weekly ADP print, Housing price indices, Consumer Confidence, Import / Export data, Inventories, and regional Fed activity indicators.
In premarket trading, chip producers and other AI-related firms are extending their selloff as worries about China’s progress in advanced chipmaking weighs down sentiment. This is also exasperating concerns over the sustainability of the AI spending boom that has propelled the sector in recent years.
In other corporate news Johnson & Johnson agreed to a $5.5 billion commitment to resolve litigation related to claims that its talc products caused ovarian cancer. KKR is said to be exploring options for LS Automotive India including a sale. In deals, Curium is said to be in advanced talks to acquire radiopharma company Lantheus Holdings in a transaction that could value Lantheus at up to $8 billion, including contingent value rights. Stellantis agreed to sell its car-sharing business Free2move to a German private equity firm, part of a plan by the maker of Fiat and Peugeot cars to exit unprofitable businesses and refocus investments on core brands and regions.
While the weeks-long volatility in chipmakers is rumbling on amid fresh concerns over massive debt issuance, debt-funded AI capex spending and rising competition from China, traders are rotating into consumer stocks and other sectors that tend to generate relatively stable revenues regardless of the economic cycle. Lower crude prices also eased inflationary angst, with Brent dropping 3% to below $86 a barrel. The global benchmark is falling for a third straight day as the US and Iran extended their pause in hostilities. Focus will now turn to talks between Tehran and Oman over restarting traffic in the Strait of Hormuz.
“It’s perfectly legitimate for investors to dilute their positions in semiconductors. It’s a good time indeed to take some profits and diversify,” said Vincent Juvyns at ING Groep NV. “That being said, I advise clients to stay invested as visibility is pretty good for the sector.”
There’s more than earnings to consider over the coming days, of course. Citadel Securities’ Frank Flight, the firm’s head of macro strategy, expects the Fed to raise interest rates this week. “The market may once again be underestimating the extent of the hawkish shift at the Fed,” Flight wrote in a note. A hike “would emphatically end the forward guidance era” while underscoring the Fed’s independence, he said.
Meanwhile, the increasingly interconnected web of dependencies between technology manufacturers and AI startups continues to stir unease. The risk of these “circular” deals was highlighted last year here, and although markets forgot all about it, they are now once again freaking out. For JonesTrading chief strategist Mike O’Rourke, investors can “talk about the compute storage all they want and the fundamental demand, but it is clear that a significant portion of Nvidia’s sales come from an ecosystem that Nvidia is artificially creating.” The result is that the “only certainty one can have is the high degree of uncertainty in the AI environment,” he said.
Credit-market signals are a more relevant short term gauge than EPS valuations for hyperscalers, notes Manish Kabra at Societe Generale. When there is a peak in CDS spreads, it should signal the market begining to price in an improvement in hyperscalers’ free cash flow and an end to a derating. But an inflection in FCF is not expected until the second half of 2027, Kabra adds.
The gap between single-stock and index volatility is off its highs, but remains close to historical extremes, consistent with very low implied correlation. The combined effect of dispersion and sector rotation beneath the surface have caused individual stock moves to cancel each other out at the index level within the S&P 500.
Elsewhere in markets, corn futures in Chicago rose as government data pointed to the sharpest drop in US crop conditions in three years, potentially reducing supply. The biggest US power grid, PJM Interconnection, is warning that data centers may face involuntary outages under a plan to avert widespread blackouts and protect residential ratepayers from electricity price spikes.
Asia bore the brunt of Tuesday’s selling. The regional benchmark headed for a correction after SK Hynix and Samsung Electronics Co. tumbled more than 13% in Seoul. The KOSPI tumbled 10%, closing at session lows following another 20 minute marketwide halt, on concern about circular AI financing and new DUV capability from China which may increase memory supply. The macro spillover is continuing. As KOSPI is down over 30% from the peak, Goldman estimates the retail wealth effect to reduce by ~15bp of GDP. Drop in equities also eases financing pressure from leveraged ETF, especially as govt continues to step up control on the product.
Tech stocks are also slipping in Europe, but that’s being offset by strength in consumer goods and autos stocks, with the Stoxx 600 up 0.4%. European chip giant ASML extended losses for the week to 10% following the emergence of a possible Chinese state-backed rival. Still, advancing stocks in the Stoxx 600 outnumbered decliners by more than two to one even as earnings from Barclays Plc, LVMH and Unilever Plc drew a mixed reaction. The Stoxx 600 benchmark rose 0.4%.
In FX, the Bloomberg Dollar Spot Index rises 0.1% as investors await the Fed’s decision due later this week. Interest-rate futures imply roughly a 38% chance of a quarter-point increase on Wednesday. The Fed is likely to leave rates unchanged but renewed tensions in the Middle East and Fed Chairman Kevin Warsh’s decision to hold a press conference “have made it a closer call than anyone would have thought a couple of weeks ago,” wrote Erik Weisman, chief economist and portfolio manager at MFS Investment Management
In rates, 10Y TSY yields are down 3bps to 4.62%, down 10bps since July 23 when Brent traded up to $100, with UK gilts slightly outperforming as investors trim their Bank of England rate-hike bets ahead of this week’s meeting.
In commodities, oil prices slide for a second day, with Brent sitting around $86 having touched $100 last week. That’s buoying bond markets, with yields falling across the US, Europe and the UK. Gold prices are down, though holding above $4,000/oz, and Bitcoin slipped below $64,000.
Looking the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, May FHFA house price Index, and France July consumer confidence. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.
Market Snapshot
Top Overnight News
A more detailed look at global markets courtesy of Newsquawk
APAC stocks were mostly negative amid a tech bloodbath and competition concerns following reports that China had started mass production of domestically developed DUV lithography equipment, which had pressured ASML shares and the Nasdaq yesterday. ASX 200 bucked the trend as strength in telecoms and the consumer sectors offset the weakness in miners, materials and resources. Nikkei 225 briefly fell beneath the 62,000 level amid the tech-related losses, with Kioxia heavily pressured. KOSPI triggered a circuit breaker with double-digit declines seen in Samsung Electronics and SK Hynix. Hang Seng and Shanghai Comp were lower but with downside limited in Hong Kong amid the mixed performance among the local tech bluechips, while the mainland was subdued as trade frictions lingered with the US reportedly probing Chinese factories in Vietnam.
Top Asian News
European bourses began the session firmer despite sharp losses in APAC, particularly the KOSPI (-10%). At the time of writing, the Euro Stoxx 50 sees gains capped as ASML continued to weigh following reports China started DUV tool production, with the stock extending losses after Monday’s -8.5% decline. Sectors are mostly in the green, with Optimised Personal Care leading and Energy lagging, the former weighed on by LVMH post earnings. Broader sentiment is supported by optimism around US–Iran talks (see commodities for further details), which weighs on crude and underpins equities. Movers: ASML extends losses (-1.5%) on China DUV concerns. In earnings, LVMH (-1%) reported a revenue beat but softer Fashion & Leather Goods sales, Unilever (+6%) beat and raised guidance, while Mercedes-Benz (+3%) cut revenue guidance but maintained margins. In APAC, SK Hynix and Samsung fell ~12% amid memory concerns linked to CXMT’s listing.
Top European News
FX
Fixed Income
Commodities
Trade/Tariffs
Central Banks
Russia-Ukraine
Middle East
US Event Calendar
To the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, and May FHFA house price Index. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.
DB's Jim Reid concludes the overnight wrap
Tech concerns have been the dominant driver in Asia this morning as renewed worries over AI investment spending, and competition from cheaper Chinese companies, have triggered another selloff in global semiconductor stocks. The KOSPI (-10.11%) is the worst-performing index, heading for its steepest decline since early March during the onset of the US-Iran conflict with the sharp drop also prompting circuit-breaker measures earlier in the session. The benchmark is being weighed down by major chipmakers, with SK Hynix falling as much as -13% and Samsung Electronics declining around -12%. Additionally, the Nikkei (-4.10%) is also seeing sharp losses, falling to its weakest level since May 22 with Kioxia Holdings down another -18% and now roughly -60% lower from its peak in late June, around the time we discussed its remarkable story in the WOW! pack given it had gone from nowhere to become the largest company in Japan in a few months. A really remarkable story.
This sums up the past 24 hours as markets have been caught between a new sell-off in chipmakers and the positive news that the US-Iran pause from over the weekend would continue as both sides negotiate in talks. This meant that the S&P 500 (+0.02%) and Nasdaq (-0.16%) were little changed yesterday after an initial rally, whilst the Philly Semi Stock Exchange Index (-2.23%) fell further. The equity performance also wasn’t helped by new highs in real yields, though nominal 10yr Treasury yields (-2.8bps) came down as Brent crude fell -8.70% yesterday, in its largest decline since April. It is an additional -2.0% lower this morning, trading at $86.59/bbl, after being at $101 on Friday morning. S&P 500 (-0.22%) and Nasdaq (-0.74%) futures are lower this morning.
Elsewhere overnight, the CSI 300 (-2.12%) and Shanghai Composite (-0.90%) are also lower but we have seen CXMT Corp.’s blockbuster debut in Shanghai over the last 24 hours. Their shares surged a stunning +466% after the IPO yesterday. The listing has reinforced investor confidence in Beijing’s drive for semiconductor self-sufficiency and has propelled the company to become China’s most valuable firm. It has also helped send shockwaves around the semis world.
Turning to the Middle East, Trump said in an interview with Axios yesterday that he had paused strikes on Iran whilst negotiations are taking place, although if the talks fail, the US would “go back to very strong military action.” He also suggested in comments to reporters that “there’s a good chance” of a deal, saying repeatedly that talks were progressing. And while Iran’s Foreign Ministry suggested that no formal negotiations were taking place with the US, we saw continued reporting of talks between Iran and Oman on re-opening the Strait of Hormuz. There was also some more concerning news, not least with Houthi attacks on Saudi oil facilities over the weekend. But overall, the focus on talks sent front-month Brent crude -8.70% lower, while 6-month Brent futures were down -3.29% to $79.67/bbl.
The fall in oil prices meant that near-term inflation expectations also declined, with the US 1yr inflation swap down -10.5bps to 1.93%, while the Euro 1yr inflation swap (-18.0bps to 2.42%) fell even more. The decline in breakevens was partially offset by a rise in real yields, with the 2yr real Treasury yield up +7.7bps, while the 10yr real yield rose +1.5bps to 2.45%, its highest since October 2023. Put together, this left nominal yields a few basis points lower on the day, including for 10yr Treasuries (-2.8bps), bunds (-3.8bps), OATs (-4.5bps), and gilts (-2.6bps).
The Treasury rally was more marginal at the front-end, with pricing of a Fed rate hike as soon as tomorrow stable at 38% yesterday. Staying with the Fed, in a separate interview onboard Air Force One Trump reiterated that interest rates in the US should be lower and that “Warsh’ll do the right thing,” saying “I know what he wants.” Meanwhile for the ECB, we did see a bit more of a pullback in hike expectations, with pricing of further hikes by the December meeting down -1.6bps to 42bps.
After rallying at the open on the retreat in oil prices, US equities whipsawed lower after chip stocks sold off. The catalyst was chip-equipment manufacturer ASML (-8.41%), whose shares fell after the Information reported that a Chinese company had successfully started mass production of deep ultraviolet lithography machines needed to create advanced semiconductors. The news led to a decline across other chip-equipment peers, with the Philly Semi Stock Exchange Index down -2.23% yesterday. Nvidia (-4.99%) shares also fell after it was revealed that the company was working on AI deals worth more than $750bn, renewing investor worries on circular AI financing.
The broader equity mood music was better, however, with nearly two-thirds of the S&P 500 higher on the day and the small cap Russell 2000 up +0.62%. And in Europe, indices including the DAX (+1.04%), CAC 40 (+0.40%) and FTSE 100 (+0.42%) saw decent gains, although the Stoxx 600 (+0.02%) was dragged down by ASML and other semi companies.
Economic data was light yesterday but we did get Germany’s July IFO business climate release (86.6 vs 86.0) surprise to the upside, driven by the expectations component (86.7 vs 84.8 est), which may reflect the federal government’s recently adopted reform measures.
Finally, the Swiss Franc weakened after Bloomberg reported that the SNB expects to keep its interest rates at 0% until the end of 2027. The Swiss franc fell by about a quarter of a percent against the euro following the story, though its daily decline was a more modest -0.09%.
To the day ahead now, economic data includes US June advance goods trade balance, wholesale inventories, July Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed Services activity, May FHFA house price Index, and France July consumer confidence. We’ll also be getting a large batch of earnings including Visa, Coca-Cola, Boeing, NXP Semiconductors, Teradyne and Ford.
Tyler Durden Tue, 07/28/2026 - 07:25Authored by Nate Kostar via CoinTelegraph.com,
Tether’s gold-backed token XAUt has received Shariah certification from Amanah Advisors, a move that could expand access to the token among Islamic financial institutions and investors seeking Shariah-compliant exposure to physical gold.
The certification found XAUt’s structure complies with key Islamic finance principles, including full backing by physical gold, the absence of interest and leverage, and transparent reserves.
Each XAUt token represents one troy ounce of physical gold stored in Swiss vaults, according to Tether.
The designation gives Tether a clearer pathway to market XAUt to Islamic financial institutions and investors that require Shariah-compliant investment products.
Tether said it expects the certification to support adoption across markets where Islamic finance is widely used, including the Gulf Cooperation Council, South Asia and parts of Africa.
XAUt is one of the largest tokenized gold products in the crypto market. Tether’s latest reserves report showed the token was backed by more than 707,000 troy ounces of physical gold worth over $3.3 billion as of March 31.
According to RWA.xyz data, the token’s onchain asset value has climbed from about $700 million in July 2025 to roughly $2.5 billion.
Tether tokenized gold. Source: RWA.xyz
Shariah-compliant crypto products gain tractionCryptocurrencies have long divided Islamic scholars, with debates centering on whether digital assets comply with Shariah principles that prohibit excessive uncertainty, speculation and interest. As companies seek to address those concerns, Shariah-compliant digital assets have begun to emerge.
One early example came in 2025, when Bahrain-based AlAbraaj Restaurants Group adopted a Bitcoin (BTC) treasury strategy and said it planned to develop Shariah-compliant financial instruments to broaden access to Bitcoin across the Islamic world.
More recently, in April, Palm Azgar Finance expanded its Shariah-compliant PUSD stablecoin to ADI Chain, targeting the more than $3 trillion Islamic finance market. PUSD became the second stablecoin available on the network, allowing institutions to settle transactions using either a dollar-linked asset or a dirham-denominated token on the same infrastructure.
Meanwhile, Dubai has emerged as a leading crypto hub in the Middle East, continuing to expand its regulated digital asset market. Earlier this month, the emirate’s Virtual Assets Regulatory Authority (VARA) issued its 50th virtual asset service provider license, surpassing the number of licensed crypto firms in Hong Kong and Singapore.
Tyler Durden Tue, 07/28/2026 - 07:20A powerful 6.8-magnitude earthquake rocked southern Japan on Tuesday afternoon, injuring dozens, sparking fires, and damaging buildings.
The Japan Meteorological Agency has since called off a tsunami alert for the coasts of the Ariake Sea and the Yatsushiro Sea. The quake struck Kyushu Island, in Kumamoto Prefecture, shortly before 4:30 p.m. local time.
NHK footage showed severe damage to the Kyushu Expressway, smoke rising from homes, and a partially collapsed wall at Kumamoto Castle.
熊本 宇城市と氷川町で震度7 被害相次ぐhttps://t.co/fAoIlTGbTd pic.twitter.com/XUUqaauCBg
— NHKニュース (@nhk_news) July 28, 2026【速報 JUST IN 】【地震】熊本 八代 橋の一部が崩れる 上空からの映像https://t.co/5yeg6MbbQN #nhk_news
— NHKニュース (@nhk_news) July 28, 2026【地震】熊本 イオンモール熊本で爆発https://t.co/cc3ru0syKJ pic.twitter.com/aI4j4ELEv5
— NHKニュース (@nhk_news) July 28, 2026イオンモール熊本で爆発音 多数が閉じ込めか けが人もhttps://t.co/cc3ru0syKJ#nhk_video pic.twitter.com/KTraNyJ1mR
— NHKニュース (@nhk_news) July 28, 2026There were no reported abnormalities at the nearby Sendai Nuclear Power Plant, Cabinet Secretary Minoru Kihara told reporters.
Tyler Durden Tue, 07/28/2026 - 06:55Authored by Guy Birchall via The Epoch Times,
Newly appointed British Defence Secretary Wes Streeting said on July 26 that Europe will one day thank U.S. President Donald Trump for “shaking us out of our complacency” on defense spending.
Speaking to British broadcaster Sky News, Streeting said that he genuinely believes “when this period of history is written, Europe will thank President Trump for shaking us out of our complacency and forcing us to stand on our own two feet and end the period of overreliance on the United States for defense.”
Former Health Secretary Streeting was appointed to the defense role on July 20 by the new British Prime Minister Andy Burnham after he reshuffled the Cabinet following the resignation of his predecessor Keir Starmer.
“What he’s said about Europe isn’t unique to President Trump, the MAGA movement or the Republican Party. This has been a long-standing grain of U.S. frustration with Europe under Democratic and Republican presidents,” Streeting said, adding that “in the world we live in, it is right that we can act to secure ourselves.”
Trump has repeatedly called on the UK and other European countries to spend more on defense and become less reliant on the United States for the continent’s security.
The push for NATO allies to do more to secure their own defenses came as the United States reoriented its defense and security priorities.
Asked if he trusts Trump, Streeting said, “I don’t know him, but I do trust the United States,” adding that in his first week in the role he has had “a unique insight into just how close and integral that relationship [between the UK and the United States] is when it comes to defense and security.”
Discussing his conversation with U.S. Secretary of War Pete Hegseth, Streeting said he was “clear that we’ve not supported offensive action in Iran and we won’t support offensive action [in] Iran,” but added that there are “plenty of things that we can and should do together when it comes to securing the Strait of Hormuz.”
Streeting’s predecessor but one, John Healey, who now has the role of chancellor of the exchequer, the UK’s equivalent to treasury secretary, resigned his post last month in protest over the previous government’s reluctance to adequately fund defense spending, in a move that contributed to Starmer’s eventual downfall.
Healey announced his resignation in a highly critical public letter posted on X, in which he accused Starmer and the Treasury of being “unable” and “unwilling” to “commit the resources that the nation needs to defend the country at this time of rising threats.”
Burnham, in one of his first interviews since becoming prime minister, told the BBC he was “absolutely committed” to what was promised to NATO partners.
The UK has pledged to spend 3.5 percent of GDP on defense by 2035, in line with a new NATO target.
Burnham said that when he appointed Healey to be chancellor he was “very aware of what he had said about the critical importance of defense spending and the position that he had taken about that.”
“The first challenge facing us both is to ensure that the defense investment plan is fully funded and that’s the thing that’s right in front of us and we need to work that through as we go towards the budget later this year.”
Burnham also stated that he would be prepared to publicly disagree with Trump if British and American interests didn’t align but added that he had had a good first exchange with the president, finding him to be “really warm.”
Trump, discussing his phone call with Burnham in a July 20 post on Truth Social, said he had a “very good conversation” with the new British prime minister.
“We discussed many subjects, including the outstanding relationship we have had with the UK. We will be meeting in the not too distant future for topics of mutual interest,” Trump said, adding that Burnham “has got a big job ahead of him, but he will be able to do it and, of course, the U.S.A. will be there to help!”
He added that they discussed “North Sea Oil, Trade, the Military Alliance, Demining of the Hormuz Strait, and many other topics,” and said the call “went very well.”
Tyler Durden Tue, 07/28/2026 - 06:30Prime Minister Benjamin Netanyahu departed from Israel on Monday afternoon for the United States, where he will be hosted in the Oval Office on Tuesday. "This is my eighth meeting with him since he was elected President, more than any other international leader," Netanyahu told reporters ahead of the Trump meeting. He acknowledged that Iran will be top of the agenda, and asserted: "I am setting out on this mission with one clear goal: to ensure the security, strength, and future of our dear State of Israel."
"From my experience as prime minister, during these complex times we must act with both great determination and great wisdom," he stated. "Our joint efforts have brought about a tremendous victory over our common enemy - Iran."
via GPO"We have already transformed the face of the Middle East beyond recognition, and we now have the opportunity and the ability to change it even further and bring a great future to the State of Israel, the people of Israel, and the entire [region]," Netanyahu said, mentioning the Abraham Accords.
In an appearance on Fox News just before his trip, he laid out that the Iran war must end with either regime collapse or total nuclear program halt. He said that Tehran must understand that continuing to cause "global economic chaos, kill thousands of its own citizens, and attack others" carries severe consequences.
He emphasized the Islamic Republic's nuclear program must end "with or without a deal." According to more:
The Iran war will end "when the Iranian regime falls, or weakens to such an extent that it understands that it must end its nuclear program," Prime Minister Benjamin Netanyahu said during a Sunday interview with Fox News.
Netanyahu insisted that Iran end its nuclear program "with or without a deal," noting that US-Israeli attacks against the Islamic regime had set the program back by "a good few years."
He added that an Iranian nuclear weapon would be a "mortal peril to every citizen in the United States," saying that Israel would "pursue all the means to prevent that" from happening.
And Netanyahu reiterated that any Iranian or proxy militant attacks against Israel would be met with a "very decisive" response, adding that the country would be making a "huge mistake".
He also told Fox that he eagerly awaits being informed by Trump of next potential decisions on Iran, and added: "In many respects, it is his decision."
Curt Mills of The American Conservative has commented in reaction to Netanyahu's comments as he heads to Washington to sell Trump on an Israeli vision for the war...
Plain as day. And fair enough (for him). Nothing -- nothing -- about how this is in the interest of the United States of America.
At the moment there has been a 'pause' in fighting in effect, which could flare up again at any time.
In Washington, the late Senator Lindsey Graham's funeral proceedings will start Tuesday. There's a big of irony to Netanyahu meeting Trump the same day, as Graham was an outspoken pro-Israel, anti-Iran hawk who had for many years advocated for regime change war against Iran.
Netanyahu before leaving for Washington:
I am on my way to Washington for a meeting with our friend, President of the United States Donald Trump.
his is my eighth meeting with him since he was elected President, more than any other international leader. It is a great… pic.twitter.com/uZ13SOo4ez
There's a chance Netanyahu may even appeal to Graham's legacy as well will no doubt seek to convince Trump to stay the course on Iran, and continue the bombing campaign until results that are favorable to Israel are achieved.
Tyler Durden Tue, 07/28/2026 - 05:45* * *
Trump Cites 'Deep Talks' - Warns of Expanded Action; Houthis Claim Responsibility for New Aramco AttacksPresident Trump has told Axios on Monday that he decided to pause American military attacks on Iran in order to give negotiations another chance, despite there currently being no evidence that Tehran has been urgently requesting them. Trump warned in the comments that war could immediately return with expanded strikes if diplomacy fails.
But it seems there's at least some indirect 'note passing' between capitals going on, even as Saudi Aramco facilities have apparently come under drone assault from Iran-aligned militants in Yemen and Iraq. Axios writes that "The talks are being conducted mainly between Iran and Oman. But Qatar, Pakistan, Egypt and Trump's envoys, Steve Witkoff and Jared Kushner, are actively involved."
"We are in very deep talks with Iran. If they don't work out, we will go back to very strong military action," Trump said in an interview. Again, very deep talks?... The Iranian side is certainly not confirming this, but instead quite the opposite. Tehran has definitively stated its position that there are no talks currently happening. It seems it is merely the mediating powers that are most urgently trying to get the sides back to the negotiating table. Trump said he won't give diplomacy "much time" and that it "either goes fast or not at all."
"All of the people that deal with Iran asked me: 'Don't fire,'" he also said, perhaps alluding to reports like the following:
The top U.S. military commander in the Middle East recommended ending the bombing campaign around the Strait of Hormuz after concluding it reached the limits of its effectiveness, a recommendation that helped shape President Donald Trump's decision to pause strikes against Iran, Axios reported Sunday.
Adm. Brad Cooper, commander of U.S. Central Command, advised Pentagon leaders, the Joint Chiefs of Staff, and the White House last week that two weeks of sustained airstrikes had weakened Iran's ability to threaten commercial shipping through the strategic waterway, multiple sources familiar with the discussions said.
As for new reported strikes on Saudi Aramco facilities (below), and particularly the sprawling Abqaiq site, the Houthis are claiming responsibility.
The last time Abqaiq (in 2019) was attacked by drones, Brent prices rose 20%.
Today, they're down 7% https://t.co/FNfEjBHQRQ
Previously Trump vowed to hold Iran directly responsible for any attacks carried out by its proxy groups.
PHOTOS OF THE DAY: Significant amount of **flaring** in the Eastern Province of Saudi Arabia, including the processing facility of Abqaiq and linked facilities of the Ghawar giant oilfield.
(**Flaring doesn't mean damage. More photos below speculating about potential damage**) pic.twitter.com/5U1e9IaJkS
Saturday saw a final break in what was 13 consecutive days of tit-for-tat attacks between the United States and Iran, with US Ambassador to the United Nations Mike Waltz having confirmed to Fox News Sunday that President Trump is trying to give peace talks "some space".
"He's giving it a little bit of room," Waltz said. "We’ve had both Oman and Iran and a number of our other negotiators engaged at every level, from the most senior levels all the way down to the technical level, over the past few weeks and particularly in the past few days."
via CENTCOMWalsh has brushed aside emerging reports that US defense interceptor supplies are running low, "I want to be crystal clear: The U.S. military, and I’ve verified this every which way, has everything that it needs to conduct this campaign as effectively as it needs to be," he said.
But a who's who of top admin and military officials have voiced concerns, including the following:
An Iranian military official warned Sunday that the country would expand its 'retaliatory' attacks in the region if the US restarts airstrikes. This as a pause has held for two days.
Iran Warns it will Expand Strikes of US Bombing Resumes"I believe that if the Americans once again fall for the Zionists' deception, or move in line with them, and insist on continuing the war, particularly through airstrikes, geographically this will expand further," Iranian army spokesman Mohammad Akraminia told AFP. Iran is also boasting that it still controls the Strait of Hormuz, and that Washington is "stuck" in the region - and that only Tehran decides when the conflict ends.
Tehran has at the same time once again confirmed there are no negotiations happening. "It’s possible that mediators share messages from the US side about current developments in the region, but at the moment we have no negotiations with the US," Iranian Foreign Ministry spokesman Esmail Baghaei told reporters on Monday.
The ARAMCO refinery in Jizan, eastern Saudi Arabia, is still burning more than 2 days after the impact of ballistic missiles launched by the Houtis.
A massive trail of smoke which extends for about 70 km can be seen on Sentinel-2 satellite imagery, 26/07/2026. pic.twitter.com/v05cwhMRjY
He also batted down claims that Iran has requested negotiations - after Trump recently asserted it was begging for talks - as "fake news". Baghaei further explained that Iran won't hesitate to use diplomacy to protect national interests, as cited in Bloomberg. He also described that Iranian and Omani officials held several rounds of "useful" talks about the management of ship traffic in the Strait of Hormuz.
US strikes and Iranian counterattacks could restart at any moment, given that the US continues to enforce a blockade on Iranian ports.
Still, an unnamed Iranian official separately told Reuters that Tehran's position "remains 'attack for attack': if the attacks stop, Iran will also halt its operations. That message has already been conveyed to the United States."
Reports of KSA's Abqaiq Oil Facility HitMeanwhile there are emerging Monday reports that Saudi Aramco's Abqaiq oil processing facility in the kingdom's eastern province is on fire after probable drone and/or missile strikes by the Houthis, or from Iran-aligned Iraqi militias.
Newsquawk reports based on emerging Iranian state media that "Hours ago, the huge Abqaiq oil facility in eastern Saudi Arabia, one of the world's most important oil processing centers, was set on fire in drone and missile attacks, reports Tasnim citing sources and images." Below are the distant images posted by Tasnim on Telegram:
Some various OSINT accounts are also seeking to verify the fires. If confirmed this would be a very serious development, which potential significant impact on the kingdom's crude output. An official response is emerging from Saudi media, as Arab sources report explosions in the kingdom:
Saudi Arabia's Ministry of Defence said it intercepted drones from Iraqi territory that attempted to target oil facilities in the Eastern Province and Riyadh regions, Al Hadath reports
Massive 300 mw fire at Abqaiq refinery and east west pumping station. Unclear what the cause is. This saudi oil facility is on fire.
25.92676, 49.68748 is not at a flaring location pic.twitter.com/0iFh1zhEc0
International reports commonly estimate that the sprawling Abqaiq facility - as the largest crude oil stabilization and processing facility in the world - has a maximum processing capacity of 7 million barrels per day (bpd) and typically operates at around 4.9 million bpd.
Houthi media has also been highlighting the fires at the site on Monday, following prior alleged Houthi attacks on key Aramco sites in Jizan and Yanbu over the weekend. The group's military spokesperson Yahya Sare identified that these sites were hit, with international press agencies citing, "There is no immediate Saudi confirmation, though footage shows plumes of black smoke rising into the air from the Aramco refinery in Jizan."
Tyler Durden Tue, 07/28/2026 - 05:35