Weekly Market Update (Jul 12, 2026)
HIGHLIGHTS
The Q2 earnings reporting season will start next week. The market is pricing in around a 30% likelihood of a rate hike at the next meeting.
- Middle East: The US military launched a new strike against Iran on Tuesday. Markets expect the peace deal to become more uncertain, driving market volatility. However, both sides are believed to remain incentivized to keep the Strait open.
- Energy: Although AI capex and issuance remain the structural focus, oil became the main driver of rate volatility this week. Near-term oil dynamics will likely determine the asymmetry in CPI.
- China: PPI is supported by tech manufacturing and high input costs. However, momentum is weakening as gains in energy-related prices moderated due to lower oil prices.
MARKETS
| Nasdaq | 26,281.61 | +1.74% |
| S&P 500 | 7,575.39 | +1.23% |
| Dow | 52,637.01 | -0.50% |
| 10-Year | 4.57% | +9bps |
| Brent | 76.01 | +5.86% |
| DXY | 100.97 | +0.11% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: Earnings growth figures are likely to determine the direction of the equity market. If the Fed decides to hike, markets should expect a short-term struggle. Historically, equities perform poorly at the start of a Fed hiking cycle.
J.P. Morgan: AI demand is driving up memory prices. Although supply will eventually come, the complexity of producing memory chips for AI will limit how fast supply can come online.
Fixed Income
UBS: Global bond yields jumped after renewed conflict in the Middle East, which drove oil prices higher. Rising inflation concerns intensified worries over policy tightening.
Morgan Stanley: A strong USD and weak Japanese yen are an underrated risk. Although letting the yen depreciate and allowing inflation to run hotter is a short-term solution, it could destabilize markets in the long run.
Economy
UBS: Economic indicators are supporting a broadening rally, including in non-AI sectors. Consumer discretionary could offer more opportunities due to policy clarity and innovation momentum.
Standard Chartered: We expect the June US inflation report to show a Q2 peak. The Fed is expected to at least hold rates for the rest of the year. Inflation-protected bonds have become more attractive.