July 25th Market Overview

Happy Friday

Oil backed off hard after a report that Pakistan is trying to restart talks between Washington and Tehran.

Brent had crossed $100 yesterday , so any whiff of de-escalation was going to move things. Nothing has actually changed on the ground yet, and I think a lot of today was traders taking profits before a weekend that could go either way. Big name earnings coming up next week and I expect a lot of volatility. More on that for this weekends premium letter. 

Let’s dig in...

Today's Big Picture

Oil Backs Off and the Whole Tape Loosens Up

Brent slid back under $95 after Reuters reported Pakistan is working, with Chinese backing, to restart U.S.-Iran talks. China wants this solved because the closed Strait of Hormuz and the Red Sea attacks are hitting its own barrels. Pakistani officials were blunt that the obstacles are still high.

A Fed Hike Is Suddenly on the Table

Traders now put the odds of a rate increase at next week's meeting at better than one in three. A week ago it was closer to one in eight. Oil did that, not the jobs data. Bill Northey at U.S. Bank still expects a hold, though he points out Chair Kevin Warsh has been plain about getting inflation back to target.

Intel's Problem Is Supply, Not Demand

Intel $INTC put up $16.1 billion in revenue against roughly $14.4 billion expected, with the data center business alone at $6.3 billion. CEO Lip-Bu Tan said this is the strongest growth in more than 15 years and that the real constraint is supply, with shortages across wafers, memory and substrates. He committed to high volume production on the 14A process in 2028. The stock fell anyway, which says more about how chips are trading this week than about Intel.

Market Overview

Index Performance

Stock Spotlight

Meta Platforms $META ( ▼ 1.61% )  
is lining up about $12 billion for a Texas data center approaching a gigawatt. Lenders want a better yield than they got on the $27 billion Hyperion deal nine months ago, which tells you how the AI credit market has shifted since the fall.

Advanced Micro Devices $AMD ( ▼ 2.75% )  
got a price target raise to $640 from $515 at Jefferies after its analyst day. Helios systems start ramping in September, and both Anthropic and OpenAI talked about moving fast on them.

Amkor Technology $AMKR ( ▼ 2.8% )  
signed a multiyear $1.5 billion agreement with Nvidia to build out advanced chip packaging and testing for AI hardware. Packaging has been the bottleneck all year, so this is a real win.

Big Name Updates

American Express $AXP ( ▼ 4.76% )  
earned $4.53 a share against $4.41 expected and raised its full year revenue outlook, but revenue came in a touch light and the stock sold off. Truist analysts said investors wanted accelerating growth and did not get it.

SAP $SAP ( ▲ 9.9% )  
reported cloud order backlog of 22.9 billion euros and revenue slightly ahead. The stock is still well below where it started the year, so this was the proof some investors were waiting on.

Nvidia $NVDA ( ▼ 1.49% )  
CEO Jensen Huang joined X and used his first post to defend open weight AI models, including Kimi K3 from Chinese startup Moonshot.

Oracle $ORCL ( ▼ 3.79% )  
won a ten year Pentagon software contract worth up to $7 billion.

Other Notable Company News

Dell Technologies $DELL ( ▼ 1.21% )  
and Hewlett Packard Enterprise $HPE both got price target raises at Citi on stronger server demand.

Salesforce $CRM ( ▲ 4.35% )  
won a Veterans Affairs contract worth up to $1.6 billion covering veteran care and service delivery.

SpaceX $SPCX ( ▼ 3.33% )  
has lost more than half its value from its high and flies its thirteenth Starship test tonight.

Deckers Outdoor $DECK ( ▲ 0.27% )  
reported revenue of $1.02 billion, in line, with Hoka and Ugg both short of expectations.

Volkswagen $SSHPF ( ▲ 0.23% )  
dropped its revenue growth target for the year after confirming plans to cut up to 100,000 jobs.

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Sector Watch

Bond Market

Bonds got a breather today after a rough week. The 10-year yield eased toward 4.67 after touching its highest level since January 2025 on Thursday.

• Germany's 10-year hit its highest level since 2011.

• France's 10-year went above 4 for the first time since 2009.

• U.S. 2s and 10s still head into the weekend with their biggest weekly rise in over two months.

Yields follow the oil tape right now. If crude keeps sliding, this all gets easier by Monday.

Policy Watch

Fed

Back in May, futures traders priced almost no chance of a hike at next week's meeting. That is how quickly this changed. Polymarket traders now see two hikes as the single most likely outcome for all of 2026.

Fiscal & Trade

The new tariffs took effect just after midnight Eastern, and the legal footing is the part that matters. After the Supreme Court struck down the earlier version in February, the White House rebuilt these around a forced labor trade investigation, which it thinks will hold up in court.

• Rates run from 10 to 12.5 percent across 60 trading partners, covering nearly all U.S. imports.

• China, Australia and Egypt sit at the top rate. The European Union, Mexico and Indonesia get the lower one.

• Oil, natural gas and cork are carved out, along with goods already in transit.

International

Iran rejected the ceasefire proposal that Iraq's prime minister carried to Tehran, according to the New York Times. Iranian officials told the same paper that if the U.S. strikes infrastructure, Iran will hit Tel Aviv directly and tell the Houthis to fully close Bab el-Mandab, the gate at the bottom of the Red Sea.

• U.K. and eurozone business activity both beat forecasts in July.

• Euro area one-year inflation expectations came down from the prior reading.

• Japan's core inflation ticked up in June as fuel costs worked through the economy.

What to Watch

The AI company quietly automating every Walmart distribution center. 
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The Fed Meeting

The decision lands next week with oil, not the labor market, driving the argument. Watch how much weight the statement puts on energy prices.

Big Tech Earnings

Microsoft and Meta report Wednesday, Apple and Amazon Thursday. Options traders are set up for large moves in all four. Capital spending guidance will matter more than the quarter itself.

- John

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