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Stocks fall amid AI spending doubts and surging oil

The trading week started with cautious optimism but ended in a sharp selloff, driven by disappointing tech earnings and escalating conflict in the Middle East.

Stocks
The S&P 500 kicked off the week in the red, falling on Monday as oil prices advanced in response to the latest escalation in the US-Iran conflict. Sentiment was mixed throughout the day, counterbalanced by hopes that ceasefire talks might resume. By Tuesday, the mood shifted toward the positive. Stocks climbed, supported by chipmakers, as investors looked past the latest Iran developments to focus on corporate earnings updates. The market got some positive earnings reports from the industrials and automobile sectors. Wednesday was quieter, with the S&P 500 staying mostly flat as oil prices rose again and investors looked ahead to tech earnings. On Thursday, however, stocks fell following subpar earnings reports, along with news that the conflict in the Middle East could escalate further. The S&P 500 dropped over 1.2% on the day, while the Nasdaq lost 2.2%, bogged down by significant drops in Alphabet () and Tesla (). Alphabet lifted its forecast for 2026 capital expenditures to between $195 billion and $205 billion, pointing to strong AI demand, but the increase from its prior range came as investors have grown more cautious about AI spending. Meanwhile, Tesla dropped after the electric vehicle maker reported second-quarter results that topped revenue expectations, but missed on profit. Friday brought more selling, particularly in the semiconductor chip sector. Overall, the top-performing sectors during the week were energy minerals, industrials, and finance, while technology services, electronic technology, and consumer durables lagged.

Bonds
At mid-week, the 10-year Treasury yield held around 4.63%, hovering at 2-month highs as the ongoing conflict in the Middle East lifted oil prices and heightened concerns over inflation and interest rates. On Thursday, news that the conflict in the Middle East could escalate further had the 10-year yield pushing higher, with the 30-year Treasury bond yield reaching 5.173%. Economic data released Thursday pointed to continued strength in the labor market, as initial jobless claims fell to 187,000 in the week ended July 18 from 209,000 a week earlier, marking the lowest level for weekly jobless claims since 1969. That reading added additional upward pressure on yields, reinforcing expectations that the Fed has little reason to cut rates soon. Investors are now looking ahead to the coming week's Fed meeting, where policymakers are widely expected to hold rates steady.

Oil
Oil spent the week marching steadily higher, driven by the ongoing conflict in the Middle East. Brent crude briefly traded back above $91 per barrel on Tuesday following new escalations in the Middle East. By Wednesday, Brent futures rose about 3.4% to settle at $94.07 per barrel, hitting their highest levels in over a month and briefly topping $95, while West Texas Intermediate climbed about 3% to close at $86.83. Thursday brought the week's most dramatic move. Brent surged more than 6% to trade above $100 per barrel, extending gains for a fifth consecutive session, as the market digested new escalations in the Middle East and concerns about an expansion of the conflict. But it fell going into the weekend on news of a new push to restart ceasefire talks in the Middle East.

Gold 
Two opposing forces kept gold prices trading in a range during the week, as investors weighed the potential for higher interest rates against the likelihood of broader geopolitical and economic instability from the US-Iran conflict. Gold briefly traded above $4,160 during the week as safe-haven demand offered support, but the rising rate environment created a ceiling. By Thursday, gold had fallen over 2%, as surging oil kept inflation fears elevated and reinforced expectations that interest rates could stay higher for longer. Elsewhere, traders assigned a 61% probability of a rate hike in September, which continued to weigh on the metal.

Crypto 
Bitcoin opened Monday slightly lower near $64,680, but went on to hit a 5-week high, briefly topping $66,890 as risk appetite returned to the market. Positive momentum continued into the early part of Wednesday, bolstered in part by 6 consecutive days of positive inflows into US spot bitcoin ETFs. However, the gains proved unsustainable. Bitcoin fell after reaching its highest level in over a month on Wednesday, as surging oil prices reignited inflation concerns. By Thursday, it had pulled back toward the $64,700 level alongside broader market weakness, and on Friday, it briefly dipped below $63,700.

Past week Year-to-date 5-year
S&P 500 –1.3% 7.9% 68.4%
Oil (WTI crude) 6.8% 56.0% 21.1%
Gold (New York) 0.6% –5.9% 123.8%
Bitcoin –1.0% –27.9% 80.8%

Source: Yahoo Finance, as of July 24, 2026.

KEY DATA FOR THE WEEK OF JULY 26

The coming week brings the highest-profile stretch of earnings season, with 4 of the Magnificent 7 set to report. The Federal Reserve will also deliver its latest interest rate decision on Wednesday.

Visa () – Tuesday Durable goods orders – Monday
Microsoft () – Wednesday Consumer confidence – Tuesday
Meta () – Wednesday International trade in goods – Tuesday
Apple () – Thursday FOMC announcement – Wednesday
Amazon () – Thursday EIA petroleum status report – Wednesday
Mastercard () – Thursday GDP – Thursday
See the full earnings calendarLog In Required (login required). See the full economic calendar.

Source: Fidelity.com, as of July 24, 2026.

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