The S&P 500 Index (SPX) fell 1.34%, the Dow Jones Industrial Average (DJIA) slipped 1.07%, and the Nasdaq 100 (QQQ) dropped 2.06%, with September E‑mini S&P futures (ESU26) down 1.43% and September E‑mini Nasdaq futures (NQU26) down 2.25%.
Equity markets fell sharply today as higher oil prices combined with a more‑than‑7% decline in Alphabet after its earnings release. Alphabet increased its capital‑expenditure outlook for the year to $205 billion from $190 billion, a level more than double its projected 2025 spend, sparking concerns about the returns on its heavy AI investments. Tesla also plunged over 13% following its Wednesday earnings report, which revealed a comparable rise in capital spending.
WTI crude oil (CLU26) rose more than 6% today after Iran‑backed Houthi forces attacked two Saudi Arabian oil tankers in the Red Sea, widening disruptions beyond the Strait of Hormuz and endangering Red Sea shipments. Brent crude (CBU26) traded above $100 per barrel. The Houthis pledged to block Saudi‑linked shipping and warned vessel operators to avoid the nation’s ports, jeopardizing exports from Yanbu, a Red Sea terminal now used as the primary shipping route after conflict curtailed traffic through the Strait of Hormuz. President Trump warned that the United States “will take care of it” should a blockade occur. Meanwhile, the United States and Iran have exchanged attacks for a twelfth consecutive day, with the U.S. maintaining its blockade of Iranian oil shipments in the Persian Gulf.
U.S. weekly initial unemployment claims fell by 22,000 to 187,000 for the week ending July 18, indicating a stronger labor market than the market’s forecast of a modest rise to 210,000. Continuing claims slipped by 2,000 to 1.796 million, also outperforming expectations of a slight increase to 1.809 million.
The Chicago Fed’s June National Activity Index improved to –0.02, falling short of the market’s expectation for a move toward zero from May’s revised –0.19.
Kansas City Fed’s July manufacturing activity index dropped two points to 9, missing analysts’ forecast of a one‑point rise to 12.
Robust Q2 earnings expectations are bolstering equity markets. Bloomberg Intelligence projects Q2 earnings growth of 23%, close to Q1’s 30% surge and well above the 12% analysts had forecasted. AI‑driven spending is expected to drive much of this growth, with AI infrastructure stocks contributing roughly 60% of the S&P 500’s earnings‑per‑share uplift. To date, 89% of S&P 500 companies reporting Q2 results have beaten estimates, according to Bloomberg data.
The market currently assigns a 36% probability to a 25‑basis‑point rate hike at the upcoming FOMC meeting on July 28‑29.
International equity markets showed mixed performance, with the Euro Stoxx 50 slipping 1.14%, while China’s Shanghai Composite rose 0.25% on Thursday and Japan’s Nikkei‑225 advanced 0.46%.
Interest Rates
September 10‑year Treasury notes (ZNU6) fell 11 ticks, pushing the 10‑year yield up 5.5 basis points to 4.710%. The 10‑year note price slid to a 1.5‑year low, with the yield climbing to a fresh 1.5‑year high. Declining note prices reflected a sharp 6% increase in WTI crude oil, which lifted the 10‑year breakeven inflation expectation by 2.3 basis points to 2.284%, a five‑week high. Additionally, stronger‑than‑expected weekly unemployment claims dampened note prices. The Treasury is scheduled to auction $21 billion of 10‑year TIPS later today.
European government bond yields rose, with the 10‑year German bund yield climbing 2.8 basis points to 3.199%, marking a new 15‑year high. The 10‑year UK gilt yield increased 6.0 basis points to 5.094%, reaching a two‑month high.
The European Central Bank kept its deposit rate steady at 2.25%, as expected. It indicated that it will await further data before deciding on any additional rate hikes to tackle inflation, noting that upside risks to inflation remain. Market participants estimate a 93% probability of a 25‑basis‑point ECB rate hike at the September 10 policy meeting.
US Stock Movers
Alphabet’s (GOOGL) and Tesla’s (TSLA) steep declines after their late‑Wednesday earnings reports are pulling down other mega‑cap technology stocks. The remainder of the Magnificent 7 are also lower, led by a drop of more than 5% in Amazon (AMZN) and over 3% in Meta Platforms (META).
Software stocks are under pressure, with Atlassian (TEAM), Salesforce (CRM), and Oracle (ORCL) each falling more than 4%.
Chipmakers are broadly lower, led by declines exceeding 5% in Microchip Technology (MCHP), over 4% in ON Semiconductor (ON), and more than 3% in Texas Instruments (TXN) and Qualcomm (QCOM).
Energy stocks and service providers rallied on the surge in oil prices, with ConocoPhillips (COP), Diamondback Energy (FANG), Exxon (XOM), Chevron (CVX) and Devon Energy (DVN) all rising more than 2%.
American Airlines (AAL) fell more than 7% after cutting its annual guidance and warning that Q3 could post a loss amid persistently high fuel prices.
T‑Mobile (TMUS) declined about 6% following a weaker‑than‑expected earnings report.
Comcast (CMCSA) fell more than 2% after its Q2 earnings revealed a decline in broadband subscribers, though the company highlighted an improved outlook for its Peacock streaming service.
Earnings Reports(7/23/2026)
Albertsons Cos Inc (ACI), Allegion plc (ALLE), American Airlines Group Inc (AAL), Ameriprise Financial Inc (AMP), Appfolio Inc (APPF), Blackstone Inc (BX), Boyd Gaming Corp (BYD), Cleveland-Cliffs Inc (CLF), Columbia Banking System Inc (COLB), Comcast Corp (CMCSA), Comfort Systems USA Inc (FIX), Deckers Outdoor Corp (DECK), Digital Realty Trust Inc (DLR), Dover Corp (DOV), Dow Inc (DOW), Edwards Lifesciences Corp (EW), First Citizens BancShares Inc/ (FCNCA), Freeport-McMoRan Inc (FCX), Honeywell International Inc (HON), Huntington Bancshares Inc/OH (HBAN), Intel Corp (INTC), Kinsale Capital Group Inc (KNSL), Lazard Inc (LAZ), Lockheed Martin Corp (LMT), Nasdaq Inc (NDAQ), Newmont Corp (NEM), Norfolk Southern Corp (NSC), NVR Inc (NVR), Old Republic International Cor (ORI), Ovintiv Inc (OVV), PG&E Corp (PCG), Pool Corp (POOL), Popular Inc (BPOP), Quest Diagnostics Inc (DGX), Rexford Industrial Realty Inc (REXR), RingCentral Inc (RNG), Robert Half Inc (RHI), Roper Technologies Inc (ROP), RTX Corp (RTX), Ryder System Inc (R), SLM Corp (SLM), Snap-on Inc (SNA), SOUTHSTATE BANK CORP (SSB), SS&C Technologies Holdings Inc (SSNC), Summit Therapeutics Inc (SMMT), Thermo Fisher Scientific Inc (TMO), T-Mobile US Inc (TMUS), Tractor Supply Co (TSCO), Union Pacific Corp (UNP), VeriSign Inc (VRSN), Viking Therapeutics Inc (VKTX), West Pharmaceutical Services Inc (WST).
