Wall Street stocks fell on Monday, July 20, 2026, as investor confidence was tempered by an escalating U.S.-Iran conflict and anticipation of crucial tech earnings reports. Early session gains were erased after reports that Iranian President Masoud Pezeshkian declared the country 'engaged in a full-scale war' with the United States. Concurrently, Tehran-aligned Houthi rebels in Yemen announced a blockade of Saudi ports, which could disrupt oil routes around the Strait of Hormuz.
This geopolitical tension led to a significant increase in oil prices. Brent crude oil futures rose by 1.3% to settle at $89.22 per barrel, after briefly exceeding $90. U.S. retail gasoline prices also climbed back above $4.00 a gallon. The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to 51,839.26. The S&P 500 dropped 14.41 points, or 0.19%, to 7,443.28, and the Nasdaq Composite decreased by 12.17 points, or 0.05%, to 25,508.07. Similarly, MSCI's gauge of stocks across the globe fell 0.29%.
However, the market saw a rebound on Tuesday, with the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average finishing up 1.3%, 0.9%, and 0.7%, respectively. This rebound was partly attributed to a recovery in chipmaker shares, which had recently entered a bear market after dropping more than 20% from late June highs. Higher oil prices remained a concern, with Brent crude futures reaching around $91.50 a barrel and West Texas Intermediate futures hitting $85 a barrel, their highest since June 12.
Several high-profile companies, including Alphabet and Tesla, are set to report earnings this week, which analysts anticipate will provide a 'cushion for the market.' The earnings season is expected to shed light on the impact of AI capital spending and geopolitical events on various sectors, particularly for semiconductor companies. U.S. Treasury yields also rose, with the 10-year yield reaching 4.63% on Tuesday amidst concerns about oil-driven inflation.
Despite the gains on Tuesday, the rising oil prices pose a threat of reigniting inflation, potentially prompting central banks to raise interest rates and slow economic growth. Peter Cardillo, chief market economist at Spartan Capital Securities, noted that while earnings are providing some support, the geopolitical situation and its impact on oil prices remain a significant factor for market performance.
