Financial Markets Today: Oil Rises and Mexican Peso Faces Pressure Due to USMCA

What is Moving Financial Markets This Monday?

Factors marking the start of the week include:

• Brent crude oil surpassed $90 per barrel again.
• The conflict between the United States and Iran continues to escalate.
• The Federal Reserve faces renewed inflationary pressures.
• Wall Street awaits financial results from major tech companies.
• Gold remains stable as investors seek safe-haven assets.
• The Mexican peso holds firm amid USMCA review.
• Asian markets started the week with losses, particularly the technology sector.

Oil Prices Rise Again

The markets’ primary concern stems from the energy sector. Brent crude oil prices advanced 2.8% to settle at $90.56 per barrel, reaching a level not seen in several weeks. Meanwhile, West Texas Intermediate (WTI) gained 2.3%, trading around $84.39 per barrel. The trigger was the intensification of tensions in the Middle East over the weekend. Military operations between the United States and Iran continued for the ninth consecutive day, heightening investor nervousness. Among the most significant developments were attacks on oil facilities in Kuwait; damage to oil tankers; new military actions in Jordan, Syria, and Kuwait; as well as increased risks to navigation in the Strait of Hormuz. The latter is particularly sensitive to the global economy, as a significant portion of global oil and liquefied natural gas exports transit this maritime route. Furthermore, statements from Tehran indicated that the ceasefire had practically collapsed, increasing uncertainty regarding international energy supply.

Rising Oil Prices Revive Inflation Fears

The behavior of the oil market has implications far beyond fuel prices. A sustained increase in crude oil prices typically translates to higher transportation, production, and logistics costs, which eventually puts upward pressure on inflation. Although the United States has recently shown signs of inflationary deceleration, the new rise in energy prices could alter that outlook. Analysts believe that oil prices above $90 could complicate the Federal Reserve’s objective of returning inflation to near 2% levels. If this scenario persists, the U.S. central bank would have less incentive to reduce interest rates in the coming months.

Gold Finds Stability, But Remains Limited

Amid rising geopolitical tensions, many investors once again turned to gold as a safe-haven asset. However, the precious metal’s performance was moderate. During Monday’s early trading:

• Spot gold (XAU/USD) advanced a mere 0.1%, settling at $4,020.63 per ounce.
• Gold futures increased by 0.8% to $4,030.20. Despite the slight rebound, the metal continues to recover from a decline of over 2% recorded last week. The explanation is relatively straightforward. While geopolitical conflicts typically favor gold, high interest rates strengthen the dollar and increase yields on U.S. Treasury bonds. As gold does not generate interest, it loses attractiveness compared to these financial instruments when rates remain high. Meanwhile, other metals showed better performance:
• Silver rose 1.8%, reaching $56.97 per ounce.
• Platinum gained 0.2%, up to $1,598.45.

Wall Street Starts the Week with Moderate Optimism

Following Friday’s losses, futures for major U.S. indices showed a slight recovery. Before the opening:

• Dow Jones futures were up approximately 0.1%.
• The S&P 500 added 0.2%.
• The Nasdaq 100 led with a gain of 0.5%. The primary driver of optimism is the start of a new corporate earnings season. This week, several major technology companies will present their quarterly reports, which could define the market’s direction for the remainder of the summer. However, doubts about the technology sector persist. The strong focus on artificial intelligence boosted valuations for much of the year, but some investors have recently begun reducing positions due to the high prices of many stocks. The most evident case is the Philadelphia Semiconductor Index, which has fallen over 20% from its June highs, officially entering a bear market. Specialists at Vital Knowledge noted that the recent correction is more a reflection of a shift in market narrative and excessively optimistic positioning rather than a significant deterioration of economic fundamentals.

Asian Financial Markets Open with Losses

Uncertainty also reached Asian markets. The MSCI Asia-Pacific index, excluding Japan, retreated 0.3%, while South Korea’s Kospi fell 4.2%, accumulating losses of nearly 9% from the previous week. The semiconductor sector continues to be one of the hardest hit by doubts surrounding the valuations of companies linked to artificial intelligence. In contrast, major Chinese indices managed to advance 1.4%, diverging from the regional trend. Japan remained closed for a holiday, after the Nikkei concluded the previous week with a 6.4% decline.

Mexican Peso Remains Stable, But Under Pressure

In Mexico, the exchange rate started the day around 17.49 pesos per dollar. Although its performance appears relatively stable, traders remain closely monitoring negotiations related to the USMCA. This week, a new round of talks between Mexican and U.S. authorities is scheduled to address automotive sector rules of origin. Washington seeks to strengthen regional content produced within the United States, which could alter investment incentives in North America. The figures illustrate the importance of this issue. Between 2018 and 2025:

• The United States attracted $346.51 billion in automotive investments.
• Mexico received $55.12 billion.
• Canada obtained $46.83 billion. Furthermore, the United States accounted for approximately 77.3% of regional automotive investment, compared to Mexico’s 12.3% and Canada’s 10.4%. Any modification to the rules of origin could impact supply chains, manufacturing exports, production costs, and future investment decisions in Mexican territory. Banco de México maintains a reference FIX exchange rate of 17.5242 pesos per dollar, while bank quotations continue to show significant differences between institutions.

Financial Markets: A Week Marked by Uncertainty

Markets began the week with a delicate balance between economic and geopolitical factors. As oil once again becomes the primary driver of global inflation, investors are analyzing whether the Federal Reserve will maintain a restrictive monetary stance for longer. At the same time, Middle East tensions continue to fuel commodity volatility, while Wall Street awaits the results of major technology companies to define the next stock market moves. In Mexico, the peso’s stability will depend on both the international environment and the progress of USMCA negotiations, the outcome of which will be decisive for the automotive industry and the attraction of investments in the region in the coming years.

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