ORLANDO, Florida, July 27 (Reuters) - Oil prices tumbled on

Monday as the U.S. and Iran swapped attacks on each other for

dialogue, while Wall Street and Treasuries traded in much

narrower ranges as investors looked ahead to a raft of big tech

earnings reports and the Federal Reserve's policy decision later

this week.

In my column today, I look ahead to the Fed meeting. If Chair

Kevin Warsh wants to cement - or restore? - the central bank's

inflation-fighting credibility, the Fed should probably raise

rates. But markets are only putting a one-in-three probability

on a move. Can the Fed afford to surprise markets? Can it afford

not to?

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. Chipmaker CXMT vaults to top of China's valuation with

466% surge in Shanghai debut

2. Nvidia in talks with OpenAI to guarantee $250 billion

financing for data center, WSJ reports

3. Trump economy at 18 months is a tale of shocks,

resilience, and signs of stalled progress

4. Bank of England to keep rate steady despite oil and gas

price rebound

5. Bank of Japan to signal more rate hikes as price

pressures build

Today's Key Market Moves

* STOCKS: China's benchmark indices up 1-3%; Europe flat, UK

+0.4%; Dow +0.5%, S&P 500 and Nasdaq little changed.

* SECTORS/SHARES: Seven sectors on the S&P 500 rise, four

fall. Comms services and consumer staples +1.5%, energy -2%,

tech -1%. Workday +9%, Palantir +7%, Sandisk -11%, Nvidia -5%.

* FX: Dollar index flat. NOK down almost 1% on oil slide,

IDR slides on cenbank chief exit. INR logs best day in six

weeks.

* BONDS: U.S. yields down 1-4 bps, curve bull flattens a

bit. 2-year auction pretty soft, 5-year auction very weak.

* COMMODITIES/METALS: Oil tumbles: WTI crude -7.5%, Brent

-9%. Gold +1%.

Today's Talking Points

* AI froth

With equity investors already on edge ahead of a huge earnings

week for Big Tech globally, they got a reminder on Monday of how

frothy AI sentiment still is, even after the recent tech

selloff. Shares of Chinese chipmaker CXMT Corp soared more than

500% on their trading debut on Monday following Asia's biggest

IPO this year, making it China's most valuable listed company.

Meanwhile, the WSJ reports that Nvidia is in talks to provide

$250 billion in financing guarantees for OpenAI as part of a

massive data center project, with total costs including chips

financing potentially well over $500 billion - eye-watering

numbers, and yet more circular financing. The bar for this

week's U.S. and South Korean megacap earnings is getting higher.

* Fed (in)visibility

Could the Fed surprise markets with a rate hike on

Wednesday? It's certainly possible, although it wouldn't come as

a complete shock - on Monday, fed funds futures pricing of a

quarter-point hike reached 40% at one point. That's eased back

to around 35%, which is still remarkably high only 48 hours away

from the decision.

Based on market pricing, analysts at HSBC calculate that

Wednesday's decision is the most uncertain in two years and one

of the least certain in over four years. As they note, in the

era of forward guidance, uncertainty so close to an FOMC meeting

is unusual. But new Fed Chair Warsh has consigned forward

guidance to history. Maybe this lack of visibility is the new

normal.

* Bonds ignore oil

Benchmark global oil prices sank between 7% and 9% on Monday,

their biggest fall in over two months. From Thursday's peak to

today's trough, WTI fell as much as 12%. Yet the decline in

Treasury yields has been very modest - the 10-year closed on

Monday at 4.64%, only 7 bps off last week's peak above 4.71%.

The bond market is signaling it doesn't put much faith in

the latest U.S.-Iran detente lasting, or even if it does,

inflationary pressures are unlikely to cool much. It's the early

innings, but the economy is moving into an era of structurally

higher yields, certainly relative to the last decade. The

30-year yield is in its longest stretch above 5% since 2007.

Businesses and households will have to adjust. Investors too.

What could move markets tomorrow?

* SK Hynix earnings

* European earnings, including Barclays and Unilever

* U.S. consumer confidence (July)

* U.S. Treasury sells $44 billion of 7-year notes at auction

* U.S. earnings, including Visa, Coca-Cola, Boeing, Seagate

Technology

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