ORLANDO, Florida, July 20 (Reuters) - Escalating tensions in

the Middle East finally weighed on Wall Street on Monday, after

investors had earlier bought back beaten-down chip stocks ahead

of some big tech earnings reports later this week, while the war

jitters lifted oil prices, bond yields and the dollar.

In my column today, I look at how the intense volatility in

South Korea's chip-heavy stock market has spilled over to Wall

Street. The benchmark KOSPI is tanking. Can the main U.S.

indices withstand the heat?

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. Chipmakers head for big profit gains, but will it be

enough?

2. 'I couldn't breathe': South Korea's frenzied stock

trading exposes margin loan risks

3. Could AI chip boom make ASML Europe's first

trillion-dollar firm?

4. China leaves benchmark lending rates unchanged for 14th

consecutive month in July

5. Canada's annual inflation rate cools below forecast on

cheaper fuel

Today's Key Market Moves

* STOCKS: South Korea -4.5%, Japan -4%. Europe -0.4%, UK

-0.7%. Dow -0.6%, S&P 500 -0.2%, Nasdaq flat.

* SECTORS/SHARES: Eight sectors on the S&P 500 fall, three

rise. Healthcare, materials -1%, comms services +0.7%. Paramount

-2%, hits 17-year low; Warner Bros. Discovery -3.8% to 2026 low.

Global Payments +6%, Microsoft +2%, Oracle -4%.

* FX: Dollar up broadly vs G10 FX, but slips vs key EM units

- BRL, MXN, KRW all +0.5% or more.

* BONDS: UK gilt yields up broadly, curve steepens ~4 bps.

U.S. yields +4-6 bps across the curve.

* COMMODITIES/METALS: Oil +1%, Brent pops back above

$90/bbl. Gold slips, hugs $4,000/oz.

Today's Talking Points

* $4 a gallon gas

The average price of gasoline in the U.S. is back above $4

a gallon, according to the AAA, following the spike in global

oil prices sparked by the re-escalation of the U.S.-Iran war.

This comes just as the U.S. holiday and "driving season" ramps

up, and so Americans already facing affordability issues will

feel the squeeze.

It's also bad timing for Fed Chair Kevin Warsh - any

breathing room he thought he might get from the recent soft CPI

and PPI prints might be reduced. Last week, several Fed

officials - Beth Hammack, Lorie Logan, Jeffrey Schmid and Philip

Jefferson - warned that current inflation dynamics are still

pointing towards higher rates.

* New broom Burnham

Britain has its seventh prime minister in a decade, with Andy

Burnham replacing Keir Starmer on Monday and pledging to end

these years of instability. Promising the biggest changes in the

last 40 years - "a new political model and a new economic model"

- is fine rhetoric, but whether he can deliver on it remains to

be seen.

What is certain is Burnham has delivered a major surprise

already, naming former defense minister John Healey as the new

Chancellor of the Exchequer. Markets had expected Shabana

Mahmood, and took Healey's announcement slightly negatively -

sterling dipped, and the 10-year gilt yield ended the day 8 bps

higher back above 5.00%. More money for defence seems likely

now, but will that mean less for other areas like health and

welfare?

* M&A (in)activity

Paramount Skydance must put its $110 billion acquisition of

Warner Bros. Discovery on hold for a couple of weeks, a U.S.

federal judge ruled on Monday, after a California-led coalition

of states argued the merger would irreparably harm competition.

The judge will hold a hearing on August 3 on whether the deal

should be delayed throughout the course of the lawsuit, which

could take months to reach a final ruling.

Meanwhile, PayPal's board is said to believe a $53 billion

takeover bid by rival Stripe and private equity firm Advent

International undervalues the company and also faces regulatory

as well as financing hurdles. But shares in the U.S. payments

giant have held their gains from last week when news of the bid

first broke, suggesting investors think this is a goer.

What could move markets tomorrow?

* Developments in the Middle East

* Taiwan exports (June)

* UK jobs, earnings (May/June)

* Potential policy announcements from new UK PM Burnham

* Germany ZEW index (July)

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