Global markets are entering a crucial week, with the Federal Reserve, the Bank of Japan and the Bank of England all set to announce rate decisions, while Microsoft, Meta, Apple, Amazon, SK Hynix, Samsung Electronics and Kioxia prepare to report earnings.
Wall Street closed Friday with a split tone. The S&P 500 rose 0.05% to 7411.98, ending the week down 0.61%. The Dow Jones Industrial Average gained 0.46% to 51947.25, though it still lost 0.38% for the week and marked a third straight weekly decline. The Nasdaq fell 0.64% to 24975.824, taking its weekly loss to 2.13% and leaving the index at its lowest level in nearly three months.
Chip names and Big Tech took the brunt of the pressure
Chip stocks were at the center of Friday's sell-off, with the sector index down more than 4%. SanDisk fell more than 10%, while Intel dropped nearly 8% even though its earnings were described as not bad. The report said selling linked to tighter leveraged ETF trading rules in South Korea spilled over into U.S. semiconductor shares.
Earnings season also produced sharp divergence. Tesla plunged nearly 18% for the week, its biggest weekly drop since 2022. Google lost almost 8% over the same period. Apple, by contrast, rebounded strongly and gained 3.5% in a single session, helping lift Microsoft and Google. Among the Magnificent Seven, Nvidia was the only stock that stayed positive for the week.
Moves in oil, metals and crypto
In commodities, WTI crude settled down 3.12% at $89.31 a barrel, though it still gained 9.21% for the week. Brent crude settled down 3.88% at $96.78 a barrel, with a weekly gain of 9.85%. COMEX gold rose 0.52% to $4067.6 an ounce and added 1.37% for the week. COMEX silver climbed 1.48% to $58.656 an ounce, bringing its weekly gain to 4.67%.
In crypto, Bitcoin opened Friday at $65047.87, down 1.6% from Thursday, and briefly slipped below $64000 during the week. Ether opened at $1876.92, down 2.9%.
In rates, the 10-year U.S. Treasury yield stood at 4.68%, up about 13 basis points over the week. The 2-year yield was 4.33%, up about 15 basis points.
Middle East tension eased in one area and worsened in another
The weekend brought a rare sign of cooling in geopolitics. According to the report, Pakistan acted as an intermediary and told Iran that halting attacks on Gulf states was a precondition for restarting talks. Donald Trump also struck a softer tone, saying he would rather sit down for talks and that Iran had shown the most genuine willingness seen in a long time.
On Saturday, Trump ordered a pause in airstrikes on Iran to create room for diplomacy. Iran's military said on Sunday that both sides had stopped hitting each other for two consecutive nights. At the same time, the White House said all military options remained on the table, framing the pause more as tactical breathing room than a full de-escalation.
Risk picked up again in the Red Sea. Yemen's Houthi forces attacked Saudi oil facilities at Red Sea ports twice on Saturday, prompting retaliatory airstrikes by the Saudi-led coalition. The report said this was the first time since the ceasefire agreement four years ago that the coalition had publicly acknowledged carrying out airstrikes. It also highlighted Yanbu as a critical node: with the Strait of Hormuz route blocked, Yanbu was described as Saudi Arabia's only remaining outlet for crude exports.
At the start of Asia-Pacific trading on Monday, international oil futures opened sharply lower as news spread that the U.S. and Iran had paused mutual attacks. Brent at one point fell more than 7% and dropped below $90.
Disagreement is building around AI spending and memory
Not everyone sees geopolitics as a lasting drag on equities. Yardeni Research and Fundstrat pointed back to the first round of U.S.-Iran military confrontation earlier this year, when the S&P 500 fell by about 10% before recovering. In that reading, geopolitical shocks have often created opportunities to build positions at lower levels, and the current wave of pessimism may be overstretched.
But the AI capital-expenditure trade is showing cracks of its own. Morgan Stanley said the current boom in AI memory may be nearing its end, with memory contract prices likely to peak in the fourth quarter. The share of earnings upgrades for memory makers had once reached 92%, but has now fallen to 77%, and valuations for SK Hynix and Samsung have also pulled back.
Michael Burry added to the debate over the weekend by publicly expanding his short positions in Nvidia and Micron. His argument was that a large part of the strong order demand shown on these companies' books was being supported by off-balance-sheet financing arrangements, and that real end-customer purchasing may be weaker than it appears.
What the market is watching this week
Whether those disagreements are resolved will depend heavily on the schedule ahead. The Federal Reserve is set to release its rate decision early Wednesday. The report said markets broadly expect no change, and investors will focus on Chair Waller's press conference for clues on whether rate hikes could restart in September. The Bank of Japan and the Bank of England are due to announce decisions on Friday and Wednesday, respectively, and both are also expected to stay on hold.
The U.S. June PCE price index will also be released on Wednesday. The report described it as the Fed's most closely watched inflation gauge, with renewed triple-digit oil prices adding upside risk to the data.
Earnings season is now entering its most crowded stretch. Microsoft, Meta and SK Hynix are due on Wednesday. Apple, Amazon and Samsung Electronics follow on Thursday. Kioxia is scheduled for Friday. The growth rates of cloud businesses at the four U.S. tech giants, their ability to monetize AI, and comments from the three memory-chip makers on HBM shipments and conventional memory pricing are likely to shape the next phase of the AI capex narrative.
Index moves are no longer telling the full story
Chaoxiang Research said Friday's market split had already signaled the core tension for the week ahead: index-level gains and losses no longer capture capital's real stance. What matters now is whether a handful of specific signals are confirmed. The record weekly drops in Tesla and Google also show that investor patience with the gap between AI spending and returns is being tested, and this week's earnings will offer a direct read.
Beyond earnings, the Middle East remains another variable that cannot be ignored. The report said the regional picture is far from settled, and any tactical shift by one side could be broken by a new flashpoint within days. Historical cases may support a more constructive view, but the current episode is more complex and involves more capital than earlier rounds of conflict.
Memory chips form another line worth watching. If earnings and guidance from the three storage giants remain strong this week, the recent warnings may prove too pessimistic. If even a slight loss of momentum appears, and if Waller delivers a hawkish message, the market could face a sharper repricing.
