Risk assets are facing what X macro analyst qinbafrank described as a three-way squeeze from oil, U.S. Treasury yields, and the dollar, with large-cap tech stocks likely to take the brunt if those pressures stay in place.
In a market commentary posted on July 23, Taipei time, qinbafrank said Brent crude was approaching $100, the 10-year U.S. Treasury yield had moved above 4.7%, and the U.S. dollar index had climbed back over 101. He wrote that while different asset classes can follow separate short-term logic, that pattern becomes a problem in the medium term, adding that the current market outlook is "not optimistic."
He said there had been encouraging progress in deleveraging in South Korea’s stock market, and that Google’s earnings confirmed surging AI demand. At the same time, he pointed to rising capital expenditure and negative free cash flow, saying those factors were colliding with mounting macro pressure and leaving the market on high alert.
Three macro pressures building at once
qinbafrank identified three forces now weighing on markets.
- Higher oil prices are lifting inflation expectations.
- Rising 10-year Treasury yields are pushing down equity valuations.
- A stronger dollar is tightening global liquidity.
He warned that deleveraging in risk assets has not fully cleared. If Brent crude breaks above $100, U.S. crude oil holds above $90, and the 10-year Treasury yield and dollar index remain above 4.7% and 101, respectively, then large technology stocks represented by the Nasdaq would become the area under the most pressure. He added that even gold, traditionally treated as a safe-haven asset, could stay under strain.
Why tech is at the center of the pressure
His argument was that technology shares are not dealing with a single headwind. Instead, valuation pressure and liquidity tightening are arriving at the same time. Google’s earnings, in his view, confirmed that AI demand is still accelerating, but heavier capital spending and negative free cash flow complicate that picture when broader macro conditions are turning harsher.
He also referred back to comments he said he made on the evening of July 21, when he argued that assets moving on separate short-term narratives was not necessarily an issue by itself, but that it would create trouble if the same setup persisted into the medium term.
Middle East developments now matter for oil
qinbafrank said the key to easing the broader macro strain is still oil. If oil prices do not come down, he said, the pressure on the macro environment will be difficult to remove.
He linked that question to recent geopolitical developments in the Middle East, citing the failure to open a new route through the Strait of Hormuz and casualties among U.S. soldiers as factors that have made the situation more complicated.
Trump faces a difficult choice
According to qinbafrank, U.S. President Donald Trump is caught between competing pressures. On one side, he needs to show toughness from time to time to calm domestic opposition, maintain support, and prepare for elections. On the other, even though the United States has clear advantages in air power and long-range strikes, Iran still retains what the analyst called the asymmetric capacity to create a global energy shock.
He argued that Trump may not yet have accepted what he described as a harsh reality: the United States can no longer restore the Strait of Hormuz to its prewar state. That, he said, leaves Washington’s next move as a core variable for markets.
Possible paths ahead
qinbafrank outlined two broad scenarios. One would be for the United States to effectively buy back international navigation rights in the strait by paying a large sum and having Iran give up control. The other would be to completely destroy Iran’s regime and military capability.
Still, he said Trump does not appear willing to take the situation to a full-scale war at this stage. Whether the administration ultimately accepts reality and makes a form of concession, or chooses a harder military response and escalates further, remains unclear.
For now, the analyst said Trump is unlikely to pivot immediately and may only make a meaningful concession after markets feel what he called "extreme pessimism and pressure." Until then, he said investors should stay highly alert to risks across global risk assets.