Oil surges as Iran war drags on; yen slides to a near-40-year low around 163 — July 23, 2026

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• On Wall Street, the S&P 500 edged up 10.24 points (0.1%) to 7,498.96, the Dow slipped 6.06 points to 52,218.58, and the Nasdaq fell 146.30 points (0.6%) to 25,690.90. Why it matters: AI-linked stocks swung sharply and dragged the broader tech-heavy Nasdaq down even as value names like Philip Morris International and AT&T rallied on strong earnings — a sign the market’s gains are narrowing to a handful of winners.

Markets

Oil is the story tying markets together right now. Brent crude jumped about 3.4% to $94.07 a barrel, briefly topping $95 and hitting its highest level in over a month. U.S. forces struck Iran for a tenth consecutive day, and Iran hit U.S.-linked facilities in Bahrain. In currencies, the dollar traded near 163 yen, a level Japan hasn’t seen in roughly 39 years and 7 months. Japan’s Nikkei 225 closed down 116.59 points (0.18%) at 66,115.60, giving back an intraday gain of more than 1,300 points led by AI and semiconductor names.

Stocks in Focus

AI and semiconductor stocks whipsawed Tokyo trading, powering an early rally in the Nikkei before profit-taking dragged the index into the red by the close. In the U.S., Philip Morris International and AT&T rallied on stronger-than-expected quarterly results, while energy-linked names drew attention as crude prices spiked on Middle East tensions. This is market commentary, not investment advice.

Compass Insight

The thread running through today’s news is geopolitical risk converting directly into energy prices — and from there, into household budgets. A war that shows no sign of winding down is pushing crude toward its highest levels in weeks, and that pressure is compounding with a yen at a near-four-decade low against the dollar. For consumers, that combination points toward higher costs for fuel, utilities, and imported goods, even as a weak yen offers some support to exporters’ earnings. Japan’s finance minister has already signaled readiness for “resolute action” on the currency, which keeps intervention risk on the table for currency markets in the near term.

Short term, watch two things: whether oil keeps climbing as the Iran conflict continues, and whether Tokyo or Washington moves on the yen. Longer term, the more interesting question is how persistently higher energy costs feed into central bank thinking on inflation, and whether volatile pockets of the market — AI and chip stocks chief among them — keep setting the tone for broader risk appetite. None of this points to a specific trade; it’s a case for watching energy and currency costs creep into everyday expenses over the coming weeks.