This weekly market recap examines cooler July inflation, Federal Reserve rate expectations, strong energy sector performance, mixed S&P 500 results, rising oil prices, Treasury yields, and the economic data investors will be watching in the week ahead.
U.S. stocks advanced as strong cloud-computing results renewed confidence in artificial intelligence spending. However, limited guidance from the Federal Reserve pushed longer-term Treasury yields higher, keeping volatility elevated as investors prepared for a busy week of manufacturing, services, and employment data.
U.S. stocks declined as investors questioned the potential returns from record AI spending and oil climbed amid renewed Middle East tensions. With Treasury yields rising and the Federal Reserve preparing to meet, markets are turning to GDP, PCE inflation, and labor-cost data for their next directional catalyst.
Technology stocks retreated as investors questioned elevated AI valuations, while escalating Middle East tensions sent oil prices sharply higher. Cooler inflation supported bonds and reduced near-term rate-hike concerns, but energy-related price pressures remain a key risk for markets and Federal Reserve policy.
U.S. equities advanced during the first full week of July as technology and AI-related shares rebounded, despite renewed U.S.–Iran tensions and higher oil prices. Strong Treasury auctions supported demand for long-term debt, while resilient services activity reinforced expectations that the Federal Reserve will remain cautious ahead of important inflation and consumer data.
Global equities finished the second quarter with momentum, led by gains across U.S., European, and developed international markets. While the S&P 500 advanced for the week and capped its strongest quarter since 2020, softer payroll growth, declining hours worked, and falling labor force participation kept investors focused on the Federal Reserve’s next move.