Market Developments
US equities booked a second consecutive weekly decline (S&P 500 -0.6% to 7,411.98; Nasdaq -1.6% to 24,975.82), while the Dow’s marginal Friday gain still left it -0.4% on the week and on a third straight losing streak. Second-quarter earnings highlighted a more selective market. Alphabet’s cloud revenue surged 82% YoY, but shares were weighed down by higher 2026 capex guidance of $195–205 billion, reflecting investor concerns over AI spending. Tesla fell 14.5% despite record deliveries and 26% revenue growth, as an EPS miss, margin compression, and negative free cash flow from heavy manufacturing and AI investment overshadowed strong sales. The common theme is a market with less tolerance for rising capital intensity and weaker margins.
Treasury yields extended their climb, with the 10-year touching 4.71% intraweek before easing to 4.68% by Friday, its highest close since January 2025, as a fresh escalation in the Iran conflict, including a thirteenth consecutive night of US strikes and Houthi attacks on Saudi tankers in the Red Sea, pushed Brent toward USD 100/bbl before it settled back near USD 98, still up roughly 10% on the week. The same dynamics echoed globally: the Eurozone flash composite PMI climbed to a five-month high of 51.9, Japan’s Nikkei and JGB yields remained volatile on BoJ tightening expectations, and Indian equities slumped, with the Nifty 50 down 2.33% as financials and realty led declines while India VIX jumped nearly 7%.
