The Weekly Wrap - July 25, 2026

Is the Middle East oil shock about to push inflation higher and force markets to reprice risk? We unpack the crude-fuelled spike in yields, sizable fund outflows, and why AI-driven spending and margin pressure at megacaps have left earnings season on edge.

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Transcript

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From Phenextra Pro in Tampa, it's Saturday, July 25th, and I'm Rachel Anderson with your weekly wrap. The week was dominated by an oil shock tied to escalating tensions in the Middle East. On Monday, Brent crude oil jumped above $100 a barrel. West Texas Intermediate rallied about 6% as traders priced in risks to supply routes. That surge stoked worries about inflation, sent U.S. stocks lower, and pushed Treasury yields to new highs for this cycle. By late week, those yields stayed elevated and the tone in the equity markets remained cautious. By the end of the week, despite resilient labor day two, markets stayed defensive as energy costs threatened to filter through. Consumers faced the prospect of higher prices at the gas pump, while shippers and retailers braced for rising transport and input costs. This pattern of rising oil prices and borrowing costs defined the week and set a wary tone for earnings reports still to come. In the tech sector, Alphabet and Tesla set a cautious tone for big tech. Alphabet's revenue was solid, but heavier spending on artificial intelligence and day two centers pressured margins and weighed on the stock. Meanwhile, Tesla flagged pressure on auto-gross margins and ongoing heavy capital spending on AI and autonomy, reviving concerns about cash burn. The takeaway for investors tech underperformed, and the setup turned cautious ahead of results from Microsoft, Amazon, and Meta. In the financial sector, U.S. equity and bond funds saw sizable outflows in the week leading up to July 22nd, according to Reuters. Equity funds lost about $7.3 billion, led by $8.5 billion pulled from growth funds. Bond funds snapped a 13-week inflow streak with $2.4 billion in redemptions, and money market funds shed $25.2 billion. These flows signal that investors are de-risking on concerns about oil-driven inflation and caution around tech earnings. Turning to the economy, U.S. weekly jobless claims fell to $187,000, the lowest since early 2022 and better than the expected $211,000. Continuing claims hovered around $183 million, suggesting steady hiring and no major deterioration in ongoing benefits. For the Federal Reserve, a firm labor backdrop keeps the focus on inflation, just as rising energy prices lift borrowing rates. In energy, Baker Hughes's U.S. rig count edged down by 1 to 587, marking the first decline in about six weeks. The pullback came even as Brent held above $100 and West Texas intermediate spiked on supply fears, underscoring tight conditions. For investors, fewer rigs alongside pricier crude point to energy-sensitive costs staying elevated into late summer. U.S. Treasury yields rose this week as the oil surge driven by conflict stoked inflation worries, pushing yields to cycle highs. The 10-year yield was at 4.7%, the two-year yield at 4.3%, and the 30-year bond yield was at 5.2%. And finally, let's check the scoreboard. Risk Off ruled the week as higher oil prices and higher yields pressured equities, and tech underperformed due to worries about AI spending ahead of more megacap results. The SNP finished the week down 0.7%, the Dow was down 0.8%, and the Nasdaq closed out down 1.5%. And that's a wrap for the week. I'm Rachel Anderson from Fenextra Pro, Turning Data, into stories.