The Global View

The week began with Iran firing on multiple commercial ships in the Strait of Hormuz on July 6–7, an action Washington characterized as a clear violation of the June 17 memorandum of understanding. U.S. Central Command responded with strikes on Iranian coastal cities in the south, prompting Tehran to claim retaliatory attacks on American military sites in Bahrain and Kuwait.

President Trump, speaking from the NATO summit in Ankara on July 8, declared that the ceasefire was over — though he added, in a characteristic qualification, that talks with Iran would continue. The administration simultaneously imposed new sanctions targeting Iranian financial facilitator Ali Ansari and key exchange houses that process billions of dollars annually for sanctioned Iranian banks. The Treasury Department also revoked a temporary waiver that had allowed the sale of Iranian oil through August.

At the United Nations on July 10, Deputy U.S. Representative Tammy Bruce reaffirmed Washington's preference for a diplomatic solution while insisting that the U.S. "stands ready to hold Iran to account." Behind the scenes, Pakistan and Qatar have been working to bring both sides back to indirect talks, though prospects appear dim.

The humanitarian and strategic picture remains grim. Satellite imagery analyzed by outside experts revealed repair and reconstruction activity at Iran's Parchin military complex, including at Taleghan 2, where experts believe explosive material for nuclear weapons is stored. Strait of Hormuz traffic has plummeted to roughly 13 vessels per day — down from approximately 110 before the war began in February. Intelligence shared by Israel also indicated that Tehran has devised a new plan to assassinate President Trump, further inflaming tensions.

The 36th NATO summit, held July 7–8 at the Beştepe Presidential Compound in Ankara, was framed by Secretary General Mark Rutte as a step toward "NATO 3.0" — an alliance in which European members and Canada shoulder greater responsibility for collective defense, even as the United States remains engaged. Leaders reaffirmed their commitment to Article 5 and the alliance's 360-degree deterrence posture.

On spending, allies noted that European NATO members and Canada increased core defense investments by more than $139 billion in 2025 alone, building toward the 5-percent-of-GDP target adopted at The Hague summit last year. Rutte highlighted that over the past decade, European allies and Canada have spent an additional $1.2 trillion on defense. Over $40 billion was earmarked for military drone technology over the next five years.

Ukraine remained a central focus. For 2026, allies pledged €70 billion in military equipment, assistance, and training, with a commitment to sustain equivalent levels in 2027. European allies and Canada now finance the majority of Ukraine's security assistance. However, the Trump administration's 2026 National Defense Strategy explicitly calls on European allies to take the lead in supporting Kyiv, and U.S. European Command has already begun drawing down fighter, maritime reconnaissance, and refueling aircraft from the continent.

Other notable developments included Trump's expected support for the sale of F-35 fighter jets to Turkey — reversing a ban from his first term linked to Ankara's purchase of Russia's S-400 missile system — and a bilateral meeting with Syrian President Ahmed al-Sharaa. Analysts described the summit as primarily a political event designed to project unity at a moment of genuine uncertainty about the transatlantic relationship.

Senator Lindsey Graham died late Saturday night following what his office called a "brief and sudden illness." The preliminary cause of death was aortic dissection due to arteriosclerotic cardiovascular disease, according to the District of Columbia medical examiner. He was 71. A top staffer told reporters there had been no indication Graham was feeling unwell; he had been scheduled to appear on "Meet the Press" the following morning.

Graham had returned only hours earlier from a trip to Kyiv, where he met with Ukrainian President Volodymyr Zelenskyy on Friday. He had also attended the NATO summit in Ankara earlier in the week, where colleagues say he was lobbying senators on a strategy to end the war in Ukraine. It was his tenth wartime visit to the country.

Tributes poured in from across the political spectrum. President Trump described him as "one of the greatest people and Senators I have ever known" and ordered flags lowered to half-staff. Senate Majority Leader John Thune called him "a strong ally to freedom-loving countries across the globe." Israeli Prime Minister Benjamin Netanyahu said: "Israel has lost one of its greatest friends." Zelenskyy praised Graham as "a true defender of freedom."

Graham's death carries immediate political consequences. His seat was already on the ballot for the November 2026 midterms following his primary victory in June. South Carolina Governor Henry McMaster will appoint a temporary successor. The Senate Republican conference, already navigating a thin majority and the continued absence of Mitch McConnell — hospitalized since June 14 — now loses another senior member. Graham was among the Senate's most vocal proponents of the U.S.–Israeli military campaign against Iran and a longtime advocate for robust American engagement abroad.

June's nonfarm payrolls came in at 57,000, well below the roughly 110,000 economists had forecast, with nearly all gains concentrated in the healthcare sector. The unemployment rate held at 4.2%, while average hourly earnings rose 3.5% year-over-year. Despite the soft headline number, the economy has added 552,000 jobs in 2026 so far — nearly five times the total for all of 2025, when the labor market was considerably weaker.

The data arrived alongside consumer price index figures showing inflation at 4.2% over the twelve months through May — the highest year-over-year reading since April 2023. Core PCE inflation stood at 3.4% as of end-May, well above the Federal Reserve's 2% target. The combination of sticky inflation and softening employment puts policymakers in a difficult position.

Minutes from the Fed's June meeting — the first chaired by Kevin Warsh — revealed a divided committee. Some officials leaned toward further rate increases to combat inflation, while others advocated patience given signs of economic cooling. Markets are now pricing in at least one 25-basis-point rate increase before year's end. Warsh's post-meeting comments emphasized price stability without reference to the Fed's other mandate of maximum employment, which bond markets interpreted as mildly hawkish.

The Iran war's renewed escalation adds a volatile wildcard. The 10-year Treasury yield climbed to 4.57% on July 8 as oil prices surged, reigniting fears that energy-driven inflation could persist. Tariff-related cost pressures and structural shipping disruptions add additional headwinds. Wall Street remains buoyed by AI-sector enthusiasm — the S&P 500 is up 9.3% year-to-date — but the tech sector sits 10% below its recent peak, and the broader economic picture is growing cloudier.

Global energy markets were jolted this week as renewed hostilities between the United States and Iran reversed a weeks-long decline in oil prices that had seen Brent crude approach pre-war levels near $70 a barrel. By midweek, Brent futures stood at $76.48 — the highest since June 23 — after the U.S. launched strikes on Iran and the Treasury Department revoked a temporary general license that had authorized Iranian oil sales through August 21.

The fundamental problem remains the Strait of Hormuz. Before the war began on February 28, approximately 110 ships per day transited the waterway, which handles roughly 20–25% of the world's seaborne oil trade and a comparable share of global LNG shipments. This week, only about 13 commercial vessels passed through in a 24-hour period, according to MarineTraffic data. GPS spoofing and elevated war-risk insurance premiums continue to deter shipping companies.

The war has already left a deep mark on global energy. Gas prices in the United States have risen substantially since February, and jet fuel in North America spiked 95% during the worst of the crisis. The United States, itself a major energy exporter, has paradoxically benefited from the disruption — crude and petroleum product exports rose to nearly 12.9 million barrels per day in late April. Russia has also seen revenue gains from the reshuffled global supply picture.

Analysts warn that even a lasting ceasefire would not quickly normalize the situation. Shipping companies remain wary of mines, unclear cease-fire terms, and the risk that Iran will seek to maintain some degree of permanent leverage over strait traffic. One energy strategist told media that the pre-war status quo in which Iran had no practical control over the strait "is a status quo that's changed going forward." With inflation already elevated and the Federal Reserve under pressure, prolonged energy market instability poses a significant risk to the U.S. and global economies alike.