Weekly Market Update (Jul 19, 2026)
HIGHLIGHTS
The US-Iran war has re-escalated, increasing stagflationary risk. The hawkish pivot remains intact.
- Korea: Highly leveraged retail traders increased volatility in Korean stock markets. The 9% single-day drop in the KOSPI earlier this week triggered margin calls on over 1.2 million retail accounts.
- Oil: Brent prices are back in the mid-$80s. Gulf exports have recovered to about 80% of pre-war levels. Risks have increased as the likelihood of further attacks on infrastructure and tankers has risen.
- Japan: The yen is weaker and long-term yields are higher, driven by the pushback in rate-hike expectations and the draft Basic Policy’s expansionary fiscal plan.
MARKETS
| Nasdaq | 25,520.24 | -2.90% |
| S&P 500 | 7,457.69 | -1.55% |
| Dow | 52,146.42 | -0.93% |
| 10-Year | 4.54% | -3bps |
| Brent | 88.10 | +15.91% |
| DXY | 100.76 | -0.21% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: For non-AI stocks, we believe consumer experience stocks can offer exposure to strong secular growth in experience-related consumer spending. Consumer spending on experiences has accelerated and outpaced broader service spending.
UBS: The sell-off in chip stocks deepened as US-Iran tensions escalated further. The latest equity setback reflected weaker investor sentiment, including fears of rate hikes, rising energy prices, sticky inflation, and potential disappointment in AI capex growth and monetization.
Fixed Income
Barclays: The Fed is expected to hold rates for now, supported by the soft June CPI, which eased immediate pressures. The ECB is also expected to keep rates unchanged, although energy prices are rising again.
J.P. Morgan: Markets are pricing in a 55% chance of a rate hike at the September meeting, indicating an upward revision to inflation expectations. AI-related spending is also a source of inflationary pressure.
Economy
UBS: US consumer spending is bifurcated. There is strong momentum among high-income households, with aggregate spending supported by the resilient job market as unemployment remains low.
Morgan Stanley: The correlation between oil prices and inflation is fading, as markets have shifted their focus to the new Fed policy direction and Treasury bond issuance. However, inflationary forces from the services economy and technology imports are still lingering.