Hormuz Tensions Rise After UAE Tankers Hit | Horizons Middle East & Africa 7/14/2026

In seeking to track the performance of the index, the fund employs a replication strategy.

Broad US energy exposure with sensitivity to crude spikes and risk premium expansion.

USO invests primarily in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels.

Direct crude exposure for headline-driven moves; best for short horizon.

Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas in the United States, Canada, and internationally.

Integrated major typically benefits from higher crude; balance sheet helps in volatile tape.

The fund uses a "passive management" (or indexing) approach to track the performance, before fees and expenses, of the index.

Airline basket is negatively exposed to higher jet fuel and travel sentiment shocks.

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally.

Another integrated major with crude leverage.

Delta Air Lines, Inc.

Named in segment; margin pressure if jet fuel rises faster than fares.

Asia equities rebound led by South Korea as AI-linked tech (specifically SK Hynix) rotates back into favor. Oil extends gains for a third session amid heightened Middle East tensions and shipping blockade rhetoric toward Iran, implying upside risk to energy and downside risk to rate-sensitive equities via inflation/yield channel. China macro is mixed: GDP misses, retail sales slightly better; property remains weak, suggesting reflation/strength may be narrow and concentrated in select sectors (e.g., AI).

Iran Strikes Kuwait in Worst Attack Since June | Horizons Middle East & Africa 7/15/2026 >> GOOD MORNING. THIS IS HORIZONS MIDDLE EAST & AFRICA. TRUMP BACKS DOWN. THE U.S. PRESIDENT DROPS OF THE PROPOSED FEE AFTER URGING FROM GULF ALLIES, BUT WASHINGTON INTENSIFIES MILITARY PRESSURE WITH FRESH STRIKES ON IRAN. ASIAN STOCKS RALLY AS SOFT OR INFLATION -- WITH SOFTER U.S. INFLATION. SK HYNIX SEARCHES ON AI OPTIMISM. CHINA'S GROWTH ENGINE SPUTTERS. THE ECONOMY SLOWS MORE THAN EXPECTED TO THE WEAKEST IN MORE THAN THREE YEARS. IT'S JUST GONE 8:00 A.M. ACROSS THE EMIRATES. I'M ABEER ABU OMAR IN DUBAI. BEFORE WE GET INTO GEOPOLITICAL NEWS, LET'S TAKE A LOOK AT THE MARKETS. U.S. FUTURES IN THE GREEN POINTING PERHAPS TO ANOTHER POSITIVE SESSION IN THE S&P 500 LATER TODAY. THAT FOLLOWS A GAIN IN THE S&P 500. NOW WE ARE SEEING S&P FUTURES TREND HIGHER, A BIT OF A RETROSPECT. SOME OF THE NUMBERS OUT OF THE BIGGEST BANKS IN THE UNITED STATES YESTERDAY, DOES SHOW THAT WALL STREET TRADERS HAVE CRACKED THE CODE PERHAPS WHEN IT COMES TO EQUITY TRADING, DESPITE THE GEOPOLITICAL NEWS. FIVE OF THE BIGGEST HE WAS SPACE REPORTED YESTERDAY INCLUDING GOLDMAN SACHS, J.P. MORGAN AND CITI. J.P. MORGAN, $6 BIL

Bloomberg Daybreak Europe highlights: ASML raises its 2026 sales outlook again (Q3 net sales guide €11B vs €10.3B est; full-year/net sales outlook raised), reinforcing strength in leading-edge semiconductor capex tied to AI. Macro overlay: escalating U.S. strikes on Iran pushing oil prices higher; U.S. 2Y yields falling ahead of U.S. PPI and Fed Beige Book; China growth slows below target to weakest in ~3 years (risk-off/EM-China negative).

Transcript highlights: China reported GDP growth of ~4.4% (below the stated 4.5–5% target range), while Asia-Pac equities were up on “cooler than expected” U.S. data. China’s large memory chip maker CXMT is discussed as planning to raise ~RMB 10bn via an IPO, framed as a potential catalyst for China equities/tech sentiment. There are mentions of elevated margin lending/leveraged positioning, implying fragility. Overall: mixed risk-on impulse from U.S. inflation vs. China growth disappointment.

Trump Drops Hormuz Fee as US Strikes on Iran Continue from Gulf Arab states in the GCC saying that they will make further investments Trump visited the GCC, those countries made pledges of hundreds of billions of two UAE flagships, killing one person, injuring several others. markets over and over about the taco trade or about President Trump going back on his words, has returned. So the 20% fee is no longer going to All that is the end of the 60 day negotiation period over the MOU that was

Key points: (1) Fed Chair Kevin Warsh says inflation fight is not finished, but markets interpret testimony as not newly hawkish; softer-than-expected headline/core US inflation drives a front-end rates rebound, supportive for equities. (2) Oil holds near a 1-month high amid Iran-related shipping disruptions/blockades and changes to planned cargo fees in Strait of Hormuz. (3) IBM plunges on a quarterly sales miss, attributed to an AI-driven chip shortage. (4) In Asia, chip stocks in Korea (SK Hynix) rebound; banks rallied in the US on earnings.

Bloomberg 'Balance of Power' segment reports: (1) U.S. reinstates a naval blockade affecting vessels transiting to/from Iranian ports and launches additional strikes on Iran; (2) Trump backs off a proposed 20% fee on Strait of Hormuz shipments, saying revenue would be replaced via investment deals; (3) Fed Chair Kevin Warsh reiterates price-stability focus and that more work is needed on inflation despite CPI showing prices falling for the first time in six years. Net: elevated Middle East shipping/geopolitical risk (potential oil/shipping risk premium) alongside still-restrictive Fed messaging.

Soft CPI (core still above 2% but monthly gauge declined YoY for first time in 2026) pushed yields lower and lifted risk assets: S&P 500 +0.4%, Nasdaq 100 +1.2%. 2Y Treasury yield fell ~9 bps (was -14 bps intraday). Brent rose to ~ $85/bbl amid Middle East developments. Additional headlines: an IBM negative driver and heightened scrutiny of big U.S. banks.