Wall Street Morning News: Oil Prices Rebound to $90; This Week Google and Tesla Decide to Take More Risk; BofA Warns Market Sentiment Is Getting Overheated

Every Monday to Friday morning, focusing on macro, US stocks, AI, precious metals, and crude oil—reviewing the market with data and seizing opportunities with trends, produced by PANews.

Last Friday, the three major US stock indexes all closed lower: the Dow fell 0.77%, the S&P 500 dropped 1.01%, and the Nasdaq slid 1.40%. A chip-stock selloff became the core variable weighing on the whole market.

What truly rattled traders wasn’t the index declines, but the Philadelphia Semiconductor Index confirming a move into a technical bear market. Since its June peak, SOX has pulled back by more than 20%. It fell nearly 9% last week, with losses of over 18% since July. The market has started re-examining whether AI capital expenditures have already used up the growth that the next few years promised.

Goldman traders noted that over the past 48 to 72 hours, investor anxiety in US markets around pullbacks in AI and semiconductors has noticeably intensified. Nomura’s Charlie McElligott warned that if technical conditions keep deteriorating, it could trigger a negative feedback loop—longs being forced to cut positions while shorts add risk.

The conflict between Iran and the US escalated sharply, and shipping volume through the Strait of Hormuz plunged

Middle East risks surged over the weekend. The US Central Command said that in the past two days, a third US service member has died, and the US subsequently carried out airstrikes on Iranian targets for the eighth consecutive night. Targets included coastal surveillance, air defenses, and facilities that threaten the Strait of Hormuz’s shipping capacity.

Iran, meanwhile, threatened that “without permission, not a drop of oil, natural gas, or fertilizer can pass through the Strait of Hormuz,” and it is also claimed that multiple vessels were intercepted. Hormuz is the lifeline of global energy transport; any shipping disruption means the market must immediately price in a war premium.

Oil prices were the first to react. In early Asian trading on Monday, Brent crude rose more than 3% and broke the $90 level. WTI crude was up about 3%, hovering around $84. Earlier, Brent had nearly touched $88 on Friday and recorded its biggest weekly gain since April.

UBS commodity analyst Giovanni Staunovo said fewer tankers leaving the Gulf and attacks on energy infrastructure are tightening the oil market again. Traders are now watching whether WTI can hold above $82 and push toward $85. If prices keep rising, the market will shift from “weekend risk premium” to “a second surge of energy inflation” in trading.

$4,000 and $50 have become the key psychological support levels that gold and silver can’t break

Under the usual script, Middle East escalation should support gold—but this time gold isn’t having it easy. Money is buying safe havens while also worrying that higher oil prices will push inflation up and make interest rates rise again, suppressing the valuation of non-yielding assets.

Independent inflation researcher Kelsey Williams warned that gold has repeatedly tested $4,000 but failed to hold it. $4,000 is turning into an overly crowded psychological support line. If that area breaks, the next round of clear buy interest may have to wait until around $3,400. The decline may not be a slow slide—it could be a fast gap down.

Silver delivered the warning earlier. Williams believes that silver failing to reclaim the $60 level for multiple consecutive trading days shows that money treating it as an industrial metal has started to withdraw. If $50 is lost, silver could fall even harder than gold.

The most dangerous combination is “oil up, bonds down, dollar up”

The key for current macro trading is how the 10-year US Treasury yield reacts after oil prices rise. If yields fall, it suggests money is flowing into Treasuries for safety. Even if risk assets are under pressure, falling rates can ease valuation stress. Conversely, if oil prices rise while the 10-year yield also rises, it indicates the market is treating the Middle East conflict as an inflation shock, and tech stock valuations will be directly compressed.

The dollar is the stress-test indicator. If the dollar breaks above 101, oil rises, and US Treasury yields rise, while gold doesn’t rally, it shows global capital is flowing into dollar liquidity rather than traditional safe-haven assets—usually the most unfavorable environment for risk assets.

In addition, hawkish voices inside the Federal Reserve are growing. Cleveland Fed Chair Beth Hammack said companies are explicitly recognizing that the Fed needs to take action to curb inflation; the sense of desperation among consumers facing tight cash flows suggests rate-hike discussions may be back on the table. Bank of America’s Michael Hartnett also pointed out that BofA’s “bull-bear indicator” has risen to a historical extreme of 9.6. With positioning extremely crowded, he recommended investors exit risk assets in summer and rotate to long-term Treasuries, defensive stocks, high-dividend assets, and the dollar.

AI trading is entering a true test, and tech stocks are entering the earnings validation window

Last week, chip stocks shifted from the leading main theme to the center of selling. Investors began questioning whether ever-escalating AI capital expenditures by mega-cap tech companies can actually translate into enough profits.

Last Friday, major tech stocks broadly fell: Google A fell 2.17%, Meta dropped 2.79%, Nvidia slid 2.21%, Amazon fell 1.06%, Tesla dropped 2.61%, Microsoft declined 1.82%, while only Apple rose 0.14%. During the day, Apple’s market value briefly overtook Nvidia again, reclaiming the top spot globally—signaling capital shifting away from “AI hardware beta” toward “cash-flow defense” platform assets.

• BofA Hartnett defined this week as a key validation point: if Mag7 cuts AI capex and the stock prices can’t make new highs, it could trigger a double hit to growth and asset prices—and may spread to cyclical sectors such as banks, brokerages, and industrials. Hartnett emphasized that if the Mag7 ETF (MAGS) falls below $65, it would pressure cyclical sectors broadly; only if it breaks above $70 would it form a signal to re-enter. He reminded investors that with today’s overheated consensus, contrarian strategies (shorting chip stocks and going long defensive assets) may be in play.

• Hennion & Walsh Chief Investment Officer Kevin Mahn also warned that if Google signals any cuts to its AI investment budget, it could trigger a chain reaction across the entire AI industry chain.

• Goldman meanwhile stressed that what the market cares about now isn’t whether there is AI demand, but whether broader enterprises in the industry chain can realize earnings using AI demand. Cloud giants like Microsoft, Amazon, Google, and Meta are betting on AI infrastructure at a pace faster than operating cash flow. Whether this wave of capital expenditures pays off will determine the valuation ceiling for US stocks in the second half.

At the same time, competition among China’s AI models is also increasing pressure on US stocks. Moonshot AI’s new model Kimi K3 has drawn attention. Goldman said it enters the high-end model competition with 2.8 trillion parameters and pushed API pricing to a new high for China models. DeepSeek V4’s full version is slated to go live as early as this week and introduces peak-and-valley pricing. For US stock traders, this means AI model capability is being rapidly commoditized, and the payback cycle of hardware and cloud capital expenditures must be repriced.

Specific project moves and stock price fluctuations:

• SK Hynix rose 1.13% last Friday; it also surged sharply intraday. Among memory names, Seagate Technology rose 5.66%, Western Digital gained 2.23%, Micron rose more than 5% intraday before closing down 0.5%, and SanDisk fell 3.99%.

• Nvidia fell 2.21% last Friday: Nvidia was pulled into the crowded semiconductor trade. The market worries that although AI compute demand is strong, valuations have already priced in too many optimistic expectations. In related sectors, AMD fell 1.03%, Broadcom dropped 0.97%, TSMC ADR slid 2.77%, Applied Materials fell more than 5%, and Texas Instruments declined more than 2%.

• TSMC fell 2.77%: TSMC CFO Huang Renxhao said the company is accelerating construction of its Arizona plant and adding $100 billion in investment, bringing its total US investment to $265 billion, mainly driven by AI demand. But the market interpreted this as capex continuing to rise. In the short run, sentiment that “demand is strong” no longer automatically equals “stocks will rise.” Related semiconductor equipment supply chains also faced simultaneous pressure, with Applied Materials and Lam Research clearly down.

• Google fell 2.17%: Google will release earnings on Wednesday after the market closes. The market focuses on Google Cloud growth, AI monetization, search advertising trends, and its planned $175 billion to $180 billion in capital expenditures. BofA raised its forecast for Google Cloud’s growth this quarter to 70% and set a target price of $430. But what the market worries about most is if Google hints at slowing AI investment, causing the entire AI chain to be revalued.

• Tesla fell 2.61%: Tesla’s earnings report this week will be a hard test for the AI and autonomous driving narrative. Although Q2 deliveries of 480.1k vehicles exceeded expectations and Cybercab expanded to Miami, the company raised its 2026 capital expenditure guidance sharply from $20 billion to $25 billion and warned that high AI and autonomous-driving investment could lead to negative free cash flow. RBC still set a $500 target price, but the market is highly cautious about automotive gross margins and the path to AI monetization. In related sectors, the auto supply chain will watch GM’s earnings, while the new energy and autonomous driving chains are under simultaneous pressure.

• Apple (AAPL) rose 0.14%: Intraday, its market cap briefly overtook Nvidia. The market sees it as a signal of a style rotation. When the AI hardware trade ebbs, investors start favoring platform assets with stable cash flows, strong buyback ability, and lower capex pressure.

• Intel fell 2.00%: Intel will report earnings on Thursday after the market closes. The market is watching the foundry business, AI server demand, gross margins, and execution progress for Panther Lake and Clearwater Forest. While HSBC doubled its target price to $200 and for the first time valued the foundry (Foundry) separately, and it predicts the market is bullish on its foundry revenue surpassing $5.5 billion, it’s still following the deep adjustment in the broader semiconductor complex.

• IBM will report earnings on Wednesday after the market closes. Previously, the company issued an early warning for its Q2 performance. The CEO admitted, “We made a mistake this quarter,” and the stock had plunged 25%. Evercore ISI said whether full-year guidance is lowered will determine whether the software sector gets a second round of selling.

This week to watch:

7月20日（周一）

• World Cup final: The 2026 World Cup final ended at the MetLife Stadium in New York. Spain beat Argentina 1-0 in extra time to win the title again after 16 years.

• UK politics and WAIC wrap-up: Andy Burnham took over as UK Prime Minister and delivered a speech; the World Artificial Intelligence Conference concluded, focusing on the impact of DeepSeek V4’s official version launch and the rollout of peak-and-valley billing on AI model sectors.

• Major earnings (US Eastern Time): AMC Theatres (AMC, premarket), Domino’s Pizza (DPZ, premarket), Zion Bank (ZION, after close).

7月21日（周二）

• The State Council Information Office holds a series of themed press conferences on “starting strong and getting going for the ‘15th Five-Year Plan’.” It covers accelerating the buildout of a transportation power and related items.

• 08:00 Korea releases export data for the first 20 days of July: an early indicator for semiconductor activity and global trade growth.

• Major earnings: General Motors (GM) will release earnings before market open on July 21. The market focuses on tariff pressure, North American manufacturing, EV profitability, and capital returns. In addition, 3M, Novartis Pharma, and Charles Schwab will also report before the open.

7月22日（周三）（科技超级日）

• 21:00 Samsung holds its Galaxy global new product event. The market focuses on whether new devices will feature more on-device AI functions.

• AMD “Advancing AI 2026” conference: CEO Lisa Su delivers a speech showcasing end-to-end AI solutions from chips to software, directly determining whether chip stocks can stop falling and rebound.

• Major earnings: Google (GOOGL, after close), Tesla (TSLA, after close), IBM (IBM, after close), Texas Instruments (TXN, after close), ServiceNow (NOW, after close), Chicago Mercantile Exchange (CME, premarket).

7月23日（周四）

• 20:15 ECB interest rate decision and Lagarde’s press conference: the market expects a hold, but remarks on inflation and liquidity withdrawal will trigger volatility in the euro and global bond markets.

• 20:30 US weekly initial jobless claims: the market expects around 214k. If initial claims are notably below expectations, it indicates the labor market is still relatively tight and the Fed will be harder to shift toward easing; if claims rise, it will reinforce the “growth slowdown” trade, supportive for US Treasuries and negative for banks and cyclical stocks.

• Major earnings: Intel reports after the close—the most crucial “transition exam” after a semiconductor bear market. On the same day, Nokia, Lockheed Martin, RTX, Blackstone, American Airlines, Newman Mining, Honeywell, SAP, Digital Realty, T-Mobile, and others will also report earnings.

7月24日（周五）

• Japan June core CPI YoY (07:30): market expects 1.7%, prior 1.5%. Directly affects the pace of subsequent rate hikes by the Bank of Japan and how quickly carry trades unwind.

• Major earnings: American Express (AXP, premarket), Verizon (VZ, premarket), Schlumberger (SLB, premarket), CATL (03750.HK, Hong Kong).