Wall Street Morning News: This week’s meetings of the U.S., Japan, and U.K. central banks, Mag7+ storage earnings reports in the offing, hopes for a U.S.-Iran ceasefire sent oil prices tumbling, and AI capital expenditures back in focus for U.S. stocks

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

Ceasefire expectations drag down oil prices; risk assets get a brief breath of air

Last night and this morning, the most important market change was: signs of easing in the Middle East; oil prices plunged. After 13 straight days of airstrikes on Iran, the US suddenly paused its actions, and Iran also said it would stop responding—prompting traders to start betting that the conflict may cool down temporarily.

Oil prices fell sharply in response. On Monday’s open, Brent crude dropped by more than 6% at one point, returning to around $87 per barrel; WTI fell below $83 per barrel; and European natural gas prices briefly fell 7.8%.

US stocks were mixed on Friday. The Dow Jones Industrial Average rose 0.46%, the Nasdaq Composite fell 0.64%, and the S&P 500 inched up 0.05%. The Dow was held up by blue chips such as Apple, while the Nasdaq was dragged down by tech and chip stocks.

But across the whole week, the market wasn’t comfortable. All three major indexes declined last week, and the S&P 500 and Nasdaq even posted back-to-back weekly declines for the first time since March this year. This suggests the market looks steady on the surface, but internally it has started to turn cautious.

Ceasefire expectations are heating up, but risks haven’t truly disappeared

The core reason for this round of oil-price plunge is that the US-Iran conflict has temporarily been put on pause. President Trump did not approve new plans for strikes against Iran, and Iran also paused its retaliatory actions. Meanwhile, Iran held talks with Oman on shipping management in the Strait of Hormuz, saying they made some progress.

However, this is not a full peace. The Houthis claim they attacked Saudi Aramco’s facilities in the Red Sea ports of Jizan and Yanbu. Although Saudi Arabia and Saudi Aramco have not confirmed yet, this indicates there is still risk in the Red Sea direction. The US stance is also nuanced: the US representative to the UN, Mike Waltz, said Trump “keeps all options,” and is currently leaving room for negotiations. Trump himself also said that if the US cannot get the results it wants from Iran, it will still consider resuming a full-scale war.

Another point traders are closely watching: the US military’s air-defense ammunition stockpile. Multiple media outlets say the US worries that air-defense interceptor missiles like “Patriot” and “THAAD” could be consumed too quickly—possibly one of the reasons Trump paused airstrikes. The White House denied any ammunition shortage, but the market will interpret it as: the cost of the US escalating war is rising.

In addition, the “TACO Index” built by Signum Global Advisors has also been widely discussed. The model uses Brent crude oil, the US 10-year Treasury yield, Strait of Hormuz shipping throughput, and the S&P 500 as variables, aiming to quantify Trump’s downgrade threshold under market pressure; its backtests show that when combined pressure reaches about 2.9 standard deviations, Trump historically tends to choose easing. Based on the current trend, the firm believes the most likely “TACO moment” is on July 26, no later than July 30— and the current pause in airstrikes falls right within this window.

Oil prices retreat and ease inflation-fear; the bond market temporarily stops the bleeding

With oil falling, pressure on inflation accelerating eases, and bond short-sellers temporarily step back.

After the energy-driven inflation panic, the US Treasury market finally caught a breather on Friday. The yield on the US 10-year Treasury pulled back after hitting a new high within Trump’s second term last Thursday, closing around 4.68%; on Monday early trading, it also continued to come under pressure as oil prices fell.

This week is a typical “super central bank week.” The market expects the Fed, the Bank of England, and the Bank of Japan will most likely stay on hold—but policy expectations have already turned clearly more hawkish. LSEG data shows US money markets have fully priced in the next meeting’s rate hike being carried out. Traders care less about whether there will be an action this week and more about whether the Fed statement and the Waller speech will pave the way for a 25 basis-point September rate hike.

On Thursday, major data will be released all at once: the US second-quarter GDP initial estimate, June core PCE, personal spending, and initial jobless claims. The market expects the US second-quarter GDP annualized growth rate to be around 2.1%. If the data beats expectations, it will reinforce the narrative that “the economy can still withstand high rates.” If core PCE re-accelerates, tech-stock valuations and long-duration assets will face a second round of pressure.

AI trading enters a “guilty until proven spending pays” stage—tech giants take the exam together this week

The biggest contradiction in US stocks right now isn’t whether AI has a future—it’s that AI spending is too big, and the question is when it will turn into profits.

Over the past two years, whenever major tech companies said they would step up investment in AI, the market usually bought it—because investors believed future returns would be huge. But things have changed now. Investors are starting to worry: will these companies really be able to turn the tens of billions of dollars they spend building data centers, buying chips, and grabbing electricity into profits and cash flow?

Last week, the tech sector was still sold off, especially large-cap tech and chip stocks. Although Google Cloud revenue jumped 82%, and that looked outstanding, the share price still plunged more than 7%. The reason: the company raised its 2026 capital expenditure guidance to a peak of $205 billion, while free cash flow turned negative. For investors, that means the company is making more, but spending even more.

Jason Lemire, Chief Investment Officer at Bold Wealth Partners, put it plainly: in the past, the market liked companies spending more to invest in AI; now the market thinks “spending less is better.” Capital expenditure, debt, and cash-flow pressure are becoming a new risk factor for tech-stock valuations.

That also makes this week’s earnings season extremely critical. Microsoft, Meta, Apple, and Amazon will all report. The market will focus on two things: first, whether AI has actually brought revenue growth; second, how much more companies still need to spend on AI.

Apple is actually the most favored right now. Instead of building AI infrastructure at a large scale like Microsoft, Meta, or Google, it has chosen to work more with external models. The market believes this approach is more cost-efficient and carries less risk—so Apple’s recent performance has clearly outpaced other tech giants.

The logic behind chip stocks is getting more complex. The Philadelphia Semiconductor Index has already given back about 17% in July, and volatility has risen to the highest level since the COVID shock. AI data centers do need a lot of chips—Nvidia, AMD, Micron, SK hynix, and others benefit—but because these stocks have already rallied too much, the market is worried about valuation and profit margins. Lemire warned that “an AI winter will eventually come,” and especially that the currently unusually rich profit margins for memory chips can’t last forever.

At the same time, AI application software stocks are actually performing strongly. Last Friday, SAP SE rose more than 9%, Snowflake and ServiceNow rose more than 7%, Adobe and UiPath rose more than 6%, and Salesforce rose more than 4%. This suggests money is rotating toward AI applications that are easier to monetize, not just chasing chip and data-center investments.

Specific project moves and share-price fluctuations:

• Apple rose more than 3% against the trend on Friday, supporting the Dow: mainly because the market likes its more “cost-saving” AI strategy. Apple is not pouring money into building compute power at scale; instead, it is rolling out AI features through partnerships. At the same time, China approved the rollout of Apple Intelligence supported by Alibaba’s Qwen model, a positive for about 60 million iPhone users in Greater China.

• Intel fell nearly 8% on Friday: although it provided a good earnings outlook, the stock still dropped sharply. The reason is the market is selling semiconductors overall, not just trading single-company fundamentals. Investors worry about AI investment getting overheated, and also about a slowdown in the traditional chip cycle.

• The storage sector plunged on Friday as the market worried that high memory-chip demand may not be sustainable. SanDisk fell 10.79%; SK hynix fell 8.81%; Micron Technology, Microchip Technology, Seagate Technology, Western Digital, and Rambus all fell nearly 7%. Micron benefits from AI servers and high-bandwidth storage demand, but investors are starting to worry that storage prices are rising too fast and margins are too high, which may pull back later. “The Big Short” Michael Burry is reportedly continuing to short Micron and Nvidia, adding to concerns about crowded trades in chip stocks. Among the relevant storage names, SK hynix is set to release its earnings report soon, and the market is watching whether HBM demand can keep growing at a high rate.

• Nvidia fell nearly 1% on Friday. A rumor about $250 billion in guarantees reinforced the controversy over “financialization of AI.” Nvidia has been negotiating to provide around $250 billion in financial guarantees to OpenAI to support a massive data-center project. The total cost of the project could exceed $500 billion. The positive side is that it shows extremely strong demand for AI compute power; the worry is that Nvidia may not only sell chips but also participate in financing guarantees, making the risk structure more complex.

• AMD fell more than 3%, but institutions still bet on a long-term share in AI accelerators. AMD tracked the broader decline in the chip sector on Friday, but Futurum Equities raised its target price to $800, believing AMD will benefit as the AI accelerator market expands. The firm estimates that by 2030 the global AI accelerator market size could reach $1.4 trillion.

• Meta fell 1.8% and will report earnings after market close this Thursday; the market’s biggest fear is it continuing to spend aggressively. Meta’s revenue grew strongly last quarter and margins were decent, but the market worries it is spending too much on AI and the metaverse. The company’s full-year capital expenditure guidance is $125 billion to $145 billion; Bank of America even expects 2026 capex could rise to $135 billion to $150 billion. Investors will focus on ad revenue, AI spending, Reality Labs losses, and management’s outlook on future spending.

• Microsoft edged up 0.03% and will also report earnings after market close this Thursday. Azure and Copilot have to prove AI ROI. Microsoft is one of the leaders in AI, but the stock has not performed strongly this year—because the market fears AI spending is too high and returns are not coming fast enough. Investors will focus on Azure cloud business growth, paid Copilot users, cloud margins, and capital expenditures. Morgan Stanley has an Overweight rating with a $600 target price; Oppenheimer maintains a Buy rating with a $515 target price.

• Amazon will report earnings after market close this Friday, and AWS is key. Amazon’s AWS grew 28% last quarter, delivering strong performance, but capital expenditures also surged and free cash flow fell sharply. Bank of America expects AWS growth could accelerate further to 33%, and it also expects Amazon’s 2026 capital expenditures could be as high as $210 billion. Investors will focus on AWS growth, third-quarter guidance, and whether AI infrastructure spending will keep expanding.

• SpaceX fell nearly 2.7%: a successful test flight, but valuation controversy is intensifying. SpaceX completed the 13th test flight of Starship and deployed 20 next-generation Starlink satellites. However, the booster recovery process was still not perfect, showing technical challenges remain. Morgan Stanley thinks a buying opportunity has emerged after the stock’s drop, with a $300 target price; but the market is also concerned about share lock-ups expiring and potentially creating selling pressure. In related commercial spaceflight areas, Europe is looking for a SpaceX alternative. Europe’s The Exploration Company is in talks for at least $300 million in financing, with a valuation above $2.0 billion.

• Scribe Therapeutics, backed by Eli Lilly, surged more than 44% on its first day—risk appetite for biotech IPOs remains. The company focuses on cardiac gene therapies. Its IPO raised $128.7 million, and the stock jumped 44.33% on day one. Funds related to Sanofi and Eli Lilly participated, showing the market still has interest in high-quality innovative drugs and gene-therapy assets.

This week to watch:

July 27 (Monday)

Changxin Technology A-share listing: As the largest IPO on the STAR Market, Changxin Technology’s debut will test the A-share tech sector’s ability to absorb new capital. If first-day trading is too large, it could divert funds away from other semiconductors and AI hardware stocks; if it performs strongly, it may boost domestic memory and hard-tech sentiment.

Major earnings: Memory stock Rambus, AstraZeneca, Baker Hughes, LVMH, KNTG Electronic, F5 Networks, Tianhong Technology, Amkor Technology, Nucor Steel, and others will report results or have results gradually “digesting.”

July 28 (Tuesday)

Major earnings: Corning, Boeing, Coca-Cola, UPS, Royal Caribbean Cruises, and others will report earnings. The market will focus on Boeing’s delivery recovery, Coca-Cola’s consumer resilience, UPS logistics demand, Corning’s AI hardware and optical communications demand, and Royal Caribbean’s outlook on travel consumption. Among them, Corning’s second-quarter earnings call will be held at 20:30 Beijing time—an important window for observing demand for AI server glass substrates, optical communications, display materials, and data-center hardware.

July 29 (Wednesday) (First battle for AI earnings)

• 08:00 SK hynix Q2 earnings: The market expects SK hynix’s operating profit in Q2 to possibly set a record; the key watch items are HBM shipments, AI server demand, NAND pricing, and second-half guidance. If results are strong, it will benefit the global memory supply chain; if management is cautious about demand, chip stocks may keep adjusting.

• Major earnings: Seagate Technology, Western Digital, Ford Motor, Visa, KLA, NXP Semiconductors, Skyworks, Teradyne, Bloom Energy, Procter & Gamble, Vertiv, Amphenol, SK hynix, and others—earnings or conference calls will cluster into release. The market will focus on Seagate Technology and Western Digital’s views on enterprise storage, NAND pricing, and AI data-center storage demand.

July 30 (Thursday) (Super central bank day and AI earnings day)

• Fed interest-rate decision (02:00): The market broadly expects a hold, but the real key is whether the policy statement hints at a September rate hike. If the wording is hawkish, US Treasury yields and the dollar may move higher and tech stocks could face pressure; if the wording is more dovish, growth stocks may rebound.

• Fed Chair Waller press conference (02:30): The market will parse clues about a September hike word by word. If he emphasizes inflation risks and oil-price shocks, the market will trade higher rates; if he emphasizes data to watch and an easing economy, risk assets may get breathing room.

• 09:00 Samsung Electronics full Q2 earnings: The market will watch HBM, advanced process technology, foundry orders, and details of cooperation with Broadcom. If management confirms continued strong AI storage demand, it will support the global memory supply chain; if guidance on capex or margins is cautious, semiconductor stocks may keep adjusting.

• Bank of England interest-rate decision (19:00) and Bailey press conference: The market expects a hold, but will focus on what it says about wages, services inflation, and the pound. If hawkish, the pound and UK government bond yields could rise.

• US second-quarter GDP annualized quarterly initial estimate, US June core PCE price index (20:30)

• Major earnings: Microsoft, Meta, Samsung Electronics, Qualcomm, Arm Holdings, Lam Research, Robinhood, SoFi, Starbucks, Rambus, Mastercard, Shell, Altria, First Solar, Regeneron, and others—earnings and calls will be released in a cluster. The market will focus on Microsoft Azure cloud growth, Copilot commercialization, AI capital expenditures, and cloud margins; Meta’s ad growth, AI spending, Reality Labs losses, and the capital expenditure path.

July 31 (Friday)

• Japan June unemployment rate and Bank of Japan interest-rate decision: The market is watching whether the BOJ will signal additional rate hikes. If the wording is hawkish, the yen could strengthen and global carry trades may face renewed pressure; if the stance is dovish, it will help stabilize global risk appetite.

• Major earnings: Apple, Amazon, Coinbase, Strategy, Roblox, Rivian, Kioxia, Exxon Mobil, Chevron, AbbVie, Moderna, Colgate-Palmolive, T. Rowe Price, Eaton, Enbridge, Cameco, and others—earnings and calls will be released in a cluster. The market will focus on Apple’s services revenue, iPhone demand, the China market, and the rollout of Apple Intelligence; Amazon’s AWS growth, AI cloud demand, third-quarter guidance, and capital expenditures.