Written by Amaury de Barros Conti, Partner | Vice President Investments
WHAT MOVED MARKET LAST WEEK
Markets experienced a notable shift in leadership as a sharp selloff in semiconductor stocks weighed heavily on broad equity indices despite generally constructive economic data and a solid start to second-quarter earnings season. While inflation continued to cool and corporate earnings from major financial institutions exceeded expectations, investors appeared to grow increasingly concerned about the sustainability of AI-related spending, rising competitive pressures within the semiconductor industry, and renewed geopolitical tensions in the Middle East.
The S&P 500 declined 1.6% during the week, while the Nasdaq Composite fell 2.9%, as per Bloomberg data, as semiconductor and AI-related stocks came under significant pressure. The Dow Jones Industrial Average lost 0.9%, while small-cap stocks proved relatively resilient, with the S&P SmallCap 600 advancing 0.4%. Energy stocks were the strongest performers, benefiting from a sharp rise in crude oil prices, while Information Technology and Communication Services led sector declines.
Source: Bloomberg Finance as of July 17, 2026.
- The dominant market story was the continued correction in semiconductor stocks. The sector, which has been a primary beneficiary of the AI investment boom, has now become an area of heightened scrutiny as investors appeared to reassess earnings expectations, competitive dynamics, and valuation levels.
- While technology stocks struggled, the start of second-quarter earnings season provided encouraging evidence that corporate fundamentals remain healthy. Large financial institutions delivered strong results. These results may help reinforce the view that both consumer and corporate balance sheets remain relatively healthy despite a higher-rate environment
- One of the most encouraging developments of the week was continued progress on inflation. June CPI increased 3.5% year-over-year, significantly below expectations of 3.8%, while core CPI was unchanged on a monthly basis, representing a meaningful downside surprise. Falling energy prices earlier in the month and easing goods inflation contributed to the softer reading. Producer prices also surprised to the downside, with PPI declining 0.3% during June compared to expectations for little change.
- The largest macroeconomic risk came from renewed Middle East tensions. Following the breakdown of a ceasefire, geopolitical developments contributed to a significant increase in oil prices. Based on Bloomberg data as of July 17, 2026, WTI crude rose 15.5% to approximately $82.50 per barrel, while Brent crude increased nearly 16% to roughly $88 per barrel. Energy equities responded positively.
LOOKING AHEAD
- More than 85 S&P 500 companies are scheduled to report earnings over the coming week. We expect that investor focus will increasingly shift toward management commentary surrounding AI capital expenditures, memory-chip demand, pricing power, and overall economic activity during the second half of the year.
- Economic releases will include PMI surveys, jobless claims, housing data, and leading economic indicators. In addition, it is anticipated that investors will continue evaluating the implications of cooling inflation against the backdrop of elevated oil prices ahead of the July 28-29 Federal Reserve meeting.
Amaury de Barros Conti
Partner | Vice President Investments
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