Oil prices dropped, and Asian stocks rose as the US and Iran paused retaliatory strikes, easing concerns over Middle East energy supply disruptions. Brent crude fell as much as 7.4% to below $90 a barrel, before paring losses, while US West Texas Intermediate crude was down 4.5%. This de-escalation led to improved sentiment, with MSCI’s Asia Pacific equities gauge rising 0.4% and Nasdaq 100 Index contracts climbing 1.2%. Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab, noted that a resolution to the conflict would be a positive development, raising hopes for negotiations.
Despite the positive news regarding oil, concerns about semiconductor stocks persisted, following a recent selloff in chip stocks. For instance, Intel dropped nearly 8%, Micron fell 7%, AMD declined 3.3%, and Broadcom lost 2.7%. The VanEck Semiconductor ETF (SMH) also fell 3%. This weakness in chipmakers, despite generally solid earnings across the S&P 500 (86% beating estimates), suggested a rotation away from high-multiple growth names.
The broader US market ended mixed on Friday, July 24, 2026. The S&P 500 edged up 0.05% to 7,411.98, while the Dow Jones Industrial Average gained $235.60 (+0.46%) to 51,947.25, partly due to a 3.5% rise in Apple. However, the Nasdaq Composite fell 0.64% to 24,975.82, dragged down by the semiconductor weakness. The Dow also marked its third consecutive weekly decline, and the S&P 500 posted its second straight weekly loss since March.
Looking ahead, markets are focused on several key events this week. Traders are awaiting the Federal Reserve's decision on interest rates, with some Fed watchers noting the possibility of dissents on July 28-29, particularly after recent oil price surges fueled inflation concerns. Investor sentiment regarding megacap technology companies' earnings is also critical, specifically Microsoft Corp. and Meta Platforms on Wednesday, followed by Apple Inc. and Amazon.com Inc. on Thursday. The recent backlash against heavy spending on artificial intelligence and doubts about whether the billions poured into infrastructure will yield commensurate returns remain a significant concern following the selloff in AI stocks.
