Markets have been dominated by a collision of geopolitical, energy, and monetary policy forces, with oil prices serving as the central transmission mechanism into equities, bonds, and inflation expectations. Oil and the Iran conflict remain the primary catalyst. Escalating Middle East tensions pushed oil above $100 per barrel for the first time since May, its sharpest spike since the war began, after Houthi rebels reportedly struck two Saudi oil tankers in the Red Sea.
Tesla and Google both plunged post results – Tesla shares plunged 14.4% after capital spending pressured free cash flow despite a higher revenue forecast, while Alphabet fell as much as 7.1% even after beating revenue and profit estimates, as investors focused on a raised full-year capex forecast tied to AI infrastructure investment.
Trump was back to his tariffs playbook and imposed new tariffs ranging from 10% to 12.5% on imports from more than 80 countries. The new tariffs took effect just as an old one expired – the global 10% import tax Trump imposed in February after the Supreme Court struck down the tariffs he had levied in 2025. Most Americans and the rest of the world no longer care about Trump’s tariffs as it is very likely that either he himself reverses it or the courts will strike it down. On the other hand, consumers have been focused more on soaring energy prices than tariffs.
For the week, the S&P 500 finished the week at 7,411.98, down roughly 0.6%, while the Nasdaq Composite fell about 2.1% and the Dow was little changed, down 0.4%
Future Wealth’s View
Markets enter this week coming off back to back weekly declines — the first such stretch since March — as a Middle East oil shock collided with growing scrutiny of AI capital spending. This week’s most consequential event is on Wednesday at the Fed meeting. How Warsh addresses inflation risk stemming from the oil spike is going to determine the direction of the stock market.
The upcoming week is one of the busiest of earnings season, with four Magnificent Seven names reporting: Microsoft, Meta Platforms, Apple and Amazon. Energy majors Exxon Mobil and Chevron report Friday morning, arriving with oil prices elevated on geopolitical tension. Additional bellwethers reporting include Ford, Boeing, Qualcomm, Starbucks, and Coca-Cola.
As funds continue to shift from technology stocks to industrials, healthcare and financial stocks, this week will give us a view into the stability of the stock market and a view into the state of the economy.