Alphabet and Tesla Disappoint, Brent Crosses $100, and the Federal Reserve Faces Its Hardest Call of the Year
Last week brought the worst possible combination: the two most-watched earnings reports both missed, and oil jumped to its highest level since the Iran war began. Alphabet and Tesla posted negative free cash flow and heavy capital expenditure guidance that spooked investors, while Houthi strikes on Saudi tankers pushed Brent above $100. The question the market cannot yet answer is whether the Federal Reserve will hold or raise on Wednesday’s FOMC decision — its first genuinely live call since Kevin Warsh took the chair. The same day brings Microsoft and Meta earnings. Thursday adds Apple, Amazon, Q2 GDP and core PCE inflation.
Summary
Three key numbers this week
Two forces collided last week. First, Alphabet and Tesla — the first Magnificent Seven companies to report — both showed rising capital expenditure, negative free cash flow, and weaker-than-expected results, erasing roughly $800 billion of combined market value in a single session. Second, Houthi attacks on Saudi oil tankers in the Red Sea pushed Brent above $100 a barrel for the first time since May, reviving inflation fear and pushing 10-year Treasury yields to 2026 highs. This week, the pressure converges on Wednesday’s FOMC decision, where a hold is the consensus but markets now price a real chance of a hike. The same day brings Microsoft and Meta earnings. Thursday delivers Apple, Amazon, Q2 GDP and core PCE — arguably the busiest single day of the year.
Last Week
What happened last week
July 25 (Fri) closing prices. Weekly change vs the previous Friday.
The week started calmly enough on the back of Tuesday’s solid PMI surveys and a string of solid industrial earnings. The damage came Wednesday evening: Alphabet and Tesla both reported after the close, and both disappointed. Alphabet raised its 2026 capital expenditure guidance sharply; Tesla posted an earnings miss and negative free cash flow. Thursday’s session saw the Magnificent Seven index shed roughly $800 billion of market value in a single day. Oil made things worse. Houthi strikes on Saudi Aramco facilities in Jizan and Yanbu — the bypass route Saudi Arabia has been using since Hormuz was closed — pushed Brent above $100 for the first time since May. Higher oil revived inflation fears and pushed the 10-year yield to its highest level of 2026. Friday brought partial relief: reports that Pakistan, backed by China, is exploring a path to renewed US-Iran negotiations pulled oil back from its highs. But prices remain elevated and the FOMC meeting this week is now treated as a genuinely live call.
| Asset | Close | Weekly change | Direction | Comment |
|---|---|---|---|---|
| Stock indices | ||||
| S&P 500US500 | 7,411.98 | −0.6% | Fell | Broke below its 50-day average on Thursday. Friday partially recovered. FOMC, Microsoft, Meta, Apple and Amazon this week will decide the next move. |
| Nasdaq 100US100 | 24,975.82 | −2.1% | Fell | Alphabet −7.1% and Tesla −14.5% on Thursday led the tech sell-off. The index broke below near-term support at 25,000. Microsoft and Meta earnings Wednesday are the retest. |
| Dow JonesUS30 | 51,947.25 | +0.5% | Rose | Apple’s 3.5% Friday gain helped the blue-chip index. Traditional industrials and defensive names cushioned the week’s sell-off in technology. |
| Russell 2000RUT | ~2,930 | −1.1% | Fell | Small caps slid as rate-hike probability rebounded. Higher oil reinforces the inflation-and-rate pressure that weighs most on smaller companies. |
| DAX 40GER40 | ~23,510 | −1.3% | Fell | European markets followed tech lower. The ECB’s neutral stance last week provided little buffer against the oil shock and US earnings disappointments. |
| Currencies | ||||
| US Dollar IndexDXY | ~101.40 | +1.6% | Strengthened | Rate-hike bets lifted the dollar sharply. 10-year yields reached 2026 highs. FOMC this week is the next test: a hold keeps dollar steady; a hike pushes it higher. |
| Euro / US dollarEURUSD | ~1.1280 | −1.9% | Fell | Dollar strength and the ECB’s unchanged stance weakened the euro. Support near 1.128 is now the line to hold ahead of PCE and FOMC. |
| US dollar / Japanese yenUSDJPY | ~158.20 | +2.4% | Near intervention range | The yen weakened sharply as US yields hit 2026 highs. BOJ meets this week and may lean more hawkish, which could reverse part of the move. |
| Pound / US dollarGBPUSD | ~1.3280 | −1.1% | Fell | Dollar strength was the main driver. BOE meets this week; UK rate expectations and the oil shock complicate the picture. |
| Energy and commodities | ||||
| Brent crude oilUKOIL | ~$96.78 | +15.3% | +27% in two weeks | Houthi strikes on Saudi Aramco facilities at Jizan and Yanbu pushed Brent above $100 on Thursday — the first close there since May. Friday pulled back to $97 on Pakistan-brokered Iran talk reports. |
| WTI crude oilUSOIL | ~$89.49 | +11.5% | Hit $92.43 intraday | WTI touched $92.43 before pulling back Friday. Trump said the US is “locked and loaded” for larger strikes. The Saudi bypass routes being attacked removes the last available detour from Hormuz. |
| Natural gasNATGAS | ~$3.55 | +9.2% | Rose | Followed oil higher on LNG shipping concerns, with summer demand adding to the pressure. |
| Metals | ||||
| GoldXAUUSD | ~$4,030 | +0.3% | Held above $4,000 | The geopolitical premium (oil shock, Iran) provided support, but rising real yields from rate-hike bets limited the gain. Caught between two opposing forces. |
| SilverXAGUSD | ~$31.60 | −0.6% | Little changed | Dollar strength and rising yields offset safe-haven demand. |
| CopperCOPPER | ~$4.62 | −1.7% | Fell | Fell on rate-hike fears and weaker growth expectations from the AI spending reckoning. |
| Cryptocurrencies | ||||
| BitcoinBTCUSD | ~$64,900 | +3.0% | Held above $65K | Held near $65,000 despite the tech sell-off, supported by the SEC settling its long-running Coinbase case. ETF outflows of $225 million Thursday were a headwind. FOMC this week is the key catalyst. |
| EthereumETHUSD | ~$1,880 | −22.3% | Sharp drop | Fell sharply alongside the broader tech sell-off and rising rate expectations. $1,880 is near key support. Deribit and CME settle monthly options on Friday — watch for expiry-related moves. |
| Government bond yields | ||||
| US 10-year yieldUS10Y | ~4.65% | +0.27pts | 2026 high | Hit 2026 highs for a fourth consecutive day Thursday as oil revived inflation fears and AI capex plans raised borrowing demand. FOMC on Wednesday is the pivot point. |
| US 2-year yieldUS2Y | ~4.38% | +0.33pts | Rate-hike bets | Rate-hike probability jumped from ~10% to ~35% for September. Markets now treat July as a live decision rather than a formality. |
| Notable companies | ||||
| AlphabetGOOGL | ~$176 | −7.1% | Missed on capex | Raised 2026 capital expenditure guidance sharply. Negative free cash flow. Both AI spending and revenue growth disappointed relative to the hype. Worst earnings reaction since February 2025. |
| TeslaTSLA | ~$319.69 | −14.5% | Record earnings drop | Earnings miss, negative free cash flow, operating expenses rising faster than revenue. Worst earnings-reaction day on record. Self-driving taxi and Megapack remain the growth story, but profitability concern now dominates. |
Main Influences
Three main influences on the market this week
The full reasoning is here. The calendar and price levels below refer back to this section.
The FOMC meeting on Wednesday — hold or hike?
The Federal Reserve concludes its two-day meeting on Wednesday at 2 pm ET (Thursday 03:00 KST), followed by Chair Kevin Warsh’s press conference. A hold at 3.50–3.75% remains the majority forecast, but money markets now price a roughly 35% chance of an increase, up from about 10% a week ago. That shift was driven by two things: Brent crude crossing $100 (reviving the fear that July’s inflation data will reverse June’s relief) and Alphabet’s capex guidance (raising the concern that AI-driven borrowing will keep upward pressure on long-term yields). Even if Warsh holds, the press conference will be closely watched for whether he signals that a September hike is genuinely on the table. The day before — Thursday — delivers Q2 GDP and core PCE, the Fed’s own preferred inflation measure. If PCE comes in above the expected 3.4%, the Fed may look wrong to have held, and markets will price a September hike more aggressively.
Microsoft and Meta on Wednesday — can they show the return?
Alphabet and Tesla both failed last week to convince investors that rising AI capital expenditure is producing proportionate revenue. The question now shifts to Microsoft and Meta, which report Wednesday after the close — the same evening as the FOMC decision. For Microsoft, the focus is on Azure cloud revenue growth and AI Copilot subscription income. For Meta, investors want to see whether the cost-efficiency gains that lifted the stock in recent weeks are showing up in margins, or whether the AI infrastructure bill is growing faster than the advertising revenue it generates. Apple and Amazon follow Thursday, adding another read on consumer spending and cloud demand. If any of these four show clear AI revenue, the narrative from last week can reverse quickly.
$100 oil — whether the Houthi-Saudi escalation holds the price
Brent crossed $100 on Thursday after Houthi missiles struck Saudi Aramco facilities at Jizan and Yanbu — the two ports Saudi Arabia has been using as bypass routes since the Strait of Hormuz was closed. If those routes are now disrupted, the global oil market has lost its last workable detour. Friday’s pullback to $97 came on reports that Pakistan, backed by China, is working to revive US-Iran negotiations. Trump said the US is “locked and loaded” for larger strikes but has not yet acted. The oil price this week is the single most important variable: it determines whether Thursday’s PCE number confirms June’s disinflation or warns that July will reverse it. Every dollar Brent stays above $95 makes the Fed’s hold harder to justify.
The Week Ahead
Economic calendar and central bank decisions
All times are Korea Standard Time (KST). Importance: H high · M medium · L low.
Current central bank interest rates
Price Levels
Important price levels
For technical reference only. Support in green, resistance in red. These are estimates, not price targets.
| Instrument | Support | Resistance | Context |
|---|---|---|---|
| S&P 500US500 | 7,350 · 7,200 | 7,575 · 7,621 | Broke its 50-day average last week. FOMC + Microsoft/Meta determine whether it recovers or tests 7,200. |
| Nasdaq 100US100 | 24,500 · 23,800 | 25,500 · 26,000 | Broke below 25,000 support. Microsoft and Meta on Wednesday are the retest of whether the AI sell-off was a single-week event or something more. |
| Brent crude oilUKOIL | $90 · $84 | $100 · $108 | Closed Friday at $97 after touching $100.69 Thursday. Whether $90 holds or $100 is retested depends entirely on the Houthi and Iran news flow. |
| GoldXAUUSD | $3,960 · $3,860 | $4,120 · $4,200 | Caught between geopolitical support (oil shock) and rate-hike pressure (higher real yields). FOMC is the deciding event: a hold frees gold to rally; a hike weighs on it. |
| BitcoinBTCUSD | $60,000 · $56,000 | $68,000 · $72,000 | Held near $65,000 despite the sell-off. SEC-Coinbase settlement was positive. FOMC is the key: a hike would test $60K; a hold + Microsoft strength could push through $68K. |
| US dollar / Japanese yenUSDJPY | 155 · 152 | 159 · 162 | Near 158, approaching the BOJ’s intervention comfort zone. A hawkish BOJ signal Thursday could sharply reverse the move; a Fed hike would push it further toward 162. |
| MicrosoftMSFT | $430 · $415 | $470 · $490 | Reports Wednesday after the close alongside Meta. Azure growth rate and AI Copilot revenue are the two figures that determine the direction of the technology sector this week. |
| Euro / US dollarEURUSD | 1.128 · 1.118 | 1.142 · 1.155 | Testing the 1.128 support. A Fed hold + softer PCE would relieve dollar pressure and allow a bounce. A hike or hot PCE would break 1.128 and open 1.118. |
Checklist
Points to check this week
Highlighted boxes are the most important items. Wednesday is likely the most consequential single day of the year so far: FOMC decision, Warsh press conference, Microsoft and Meta earnings all arrive within hours of each other.