TLDR
- Alphabet and Tesla both report Q2 earnings on Wednesday, July 22
- The global chip stock rout has erased over $3 trillion in market value since June 22
- US-Iran ceasefire collapse has pushed Brent crude back above $87.50 a barrel
- Bank of America expects the US dollar to continue rising through the second half of 2026
- Investors want proof AI spending is generating real returns, not just promises
Big Tech earnings season kicks off this week with Alphabet and Tesla both reporting on Wednesday. The results come after a rough week for markets, with the Nasdaq falling 2.9% and the S&P 500 dropping 1.6%.
Alphabet has been a strong performer over the past year, with shares roughly doubling. The company recently sold stock to fund AI data center construction. Investors are watching closely to see if that spending is paying off.
#earnings for the week of July 20, 2026https://t.co/hLn2sKQhEY$TSLA $INTC $GOOGL $NOW $NOK $AMC $IBM $GEV $TXN $HAL $T $MXL $VICR $KMI $CLF $TCBI $VZ $CCK $CHTR $DPZ $AAL $AXP $HBAN $FCX $ALK $ALLY $DHI $STM $NEE $PM $BX $BOKF $DECK $EWBC $LMT $DHR $CX $NLY $STLD $TSCO $WRB… pic.twitter.com/Q3alZarUTr
— Earnings Whispers (@eWhispers) July 17, 2026
There are some concerns, though. Reports suggest the Gemini 3.5 Pro model launch may be delayed. That weighed on Alphabet shares late last week.
AI Spending Under the Microscope
The bigger question going into earnings is whether AI investment is translating into real profits. LPL Financial’s chief equity strategist Jeff Buchbinder put it plainly: “The market is moving from pricing in promise to pricing in execution.”
Data center spending from the top five hyperscalers — Microsoft, Alphabet, Amazon, Meta, and Oracle — is expected to hit $644 billion in 2026, up 79% year on year. Investors want to see returns on that number.
Semiconductor sales grew 79% year on year in Q1 2026. BNP Paribas expects that figure to jump to 132% growth in Q2. Still, chipmaker stocks have been hit hard, with the PHLX Semiconductor index erasing more than $3 trillion in market value since late June.
Tesla is also reporting Wednesday. CEO Elon Musk has made clear he wants to push the company beyond cars and into robots and AI. Tesla is tripling its capital expenditure to support those plans.
Intel reports Thursday and will be closely watched as a check on the broader chip trade. Strong results last quarter sent its shares higher, and recent deals with Google and the Terafab project have kept investor interest alive.
Oil Prices Spike as Middle East Tensions Escalate
Markets got another jolt last week from the Middle East. A preliminary US-Iran agreement that had eased tensions fell apart, and fighting between US and Iranian forces resumed.
🇺🇸 JUST NOW: The U.S. forces strike Iran for the eighth straight night after two service members were killed and one remains missing in Jordan. pic.twitter.com/GLXgB4koN9
— Coin Bureau (@coinbureau) July 19, 2026
Oil flows through the Strait of Hormuz had recovered to around 10 million barrels per day in early July. By July 15, that figure had dropped back to between 3 and 5 million barrels per day. Goldman Sachs says the market is now short 13.4 million barrels per day from the Gulf region.
Brent crude gained roughly 15% last week, pushing back above $87.50 a barrel. WTI crude rose around 14%.
Dollar Strength
The US dollar is up around 2.5% against a basket of major currencies this year. Bank of America expects more gains ahead, pointing to Middle East tensions, foreign demand for US tech stocks, and a higher-for-longer rate outlook.
Bank of America is forecasting three Fed rate hikes of 25 basis points each in 2026. Markets are only pricing in one. If BofA is right, that divergence could provide a further boost to the dollar.
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