Energy captures the Iran risk premium

What's moving U.S. markets this week: last week's sector rotation, commodities, the themes with momentum, and the earnings calendar ahead, grounded in the same data behind our stock pages.

This Week in Markets

The single biggest story heading into the week of July 20 is whether the AI capex narrative can stabilize after last week's rout, or whether the market is entering a genuine repricing of hyperscaler spending.

The Nasdaq-100 fell 4.16% last week and Information Technology (XLK) dropped 5.48%, the worst sector performance on the board, as investors reacted to signs that Chinese AI labs are closing the capability gap with cheaper models, reviving fears that US hyperscalers are over-investing in compute. Energy told the opposite story: XLE gained 4.72% as crude oil jumped roughly 4.6% on the week and 6.5% over the month, driven by the escalating US-Iran conflict around the Strait of Hormuz, where renewed strikes and a partial blockade have disrupted tanker traffic. That divergence, growth sold, energy and defensives bought, is the sector rotation this week's catalysts will test.

Wednesday brings the week's marquee earnings: Alphabet and Tesla report, alongside Texas Instruments and ServiceNow, giving the market its first direct read from megacap tech since the selloff began. Thursday adds Intel, a name investors will watch closely given last week's semiconductor weakness. On the macro side, the calendar is light: no CPI, PPI, or retail sales this week, but weekly jobless claims post Thursday and S&P Global's flash PMI and new home sales data land Friday, offering a gauge of activity ahead of the July 29 Fed decision. With oil-sensitive names Exxon, SLB, and Baker Hughes also reporting this week, the tape has two live threads to watch: whether tech earnings validate or worsen the AI capex jitters, and whether the Iran-driven energy rally has more room to run.

Last Week: Sector Winners & Losers

S&P 500 -1.54% · Nasdaq-100 -4.16%

Commodities

Energy captures the Iran risk premium

XLE was the standout sector last week, gaining 4.72% while the broader S&P 500 fell 1.54%, as crude oil rose 4.6% on the week and 6.5% over the month. The move tracks the deteriorating security situation around the Strait of Hormuz, where renewed US strikes on Iran and reports of tanker attacks have raised the risk of prolonged disruption to a corridor that historically carries a large share of seaborne crude. This week's earnings calendar puts the trade to a direct test: ExxonMobil (XOM) and SLB (SLB) report Friday, and Baker Hughes (BKR) reports Monday, giving investors a read on whether producers and oilfield-services firms are actually capturing higher realized prices or simply riding a volatile headline-driven spike. Copper, up 1.8% on the week but still down 2.1% over the month, and natural gas, down on both windows, suggest the strength is concentrated in crude specifically rather than commodities broadly. Watch whether earnings commentary from Baker Hughes and SLB references activity levels in the Middle East, and whether Exxon's results show the price surge flowing through to margins or being offset by higher operating risk in the region.

AI capex doubts trigger the tech unwind

Information Technology was by far the worst-performing sector last week, with XLK down 5.48% and the Nasdaq-100 off 4.16%, as semiconductor and hyperscaler names sold off on concerns that cheaper competing AI models out of China could reduce the capital intensity of the current buildout. Communication Services (XLC, -0.89%) and Consumer Discretionary (XLY, -1.54%) also lagged, reflecting the same growth-stock pressure. This week's earnings calendar is the most direct test available: Alphabet (GOOGL) and Texas Instruments (TXN) report Wednesday, followed by Intel (INTC) on Thursday, giving investors three separate reads on cloud and AI infrastructure demand (Alphabet), analog and industrial chip demand (Texas Instruments), and the state of legacy semiconductor manufacturing (Intel). ServiceNow (NOW), also Wednesday, adds an enterprise-software data point on whether AI-linked spending is showing up in software budgets. The question isn't whether these companies grew, it's whether management commentary on capital expenditure plans reinforces or eases the capex-discipline concerns that drove last week's selloff. A repeat of cautious guidance would extend the rotation already visible in the sector performance data; reassurance on demand could stabilize the group.

Quality and defensives absorb the rotation

While growth sold off, Real Estate (XLRE, +2.18%), Consumer Staples (XLP, +1.27%), and Financials (XLF, +0.99%) were the market's best-performing sectors after Energy, a pattern consistent with investors moving toward lower-volatility, income-oriented names during a week of geopolitical stress. Last week's earnings results in our tracked universe support that read: Prologis (PLD) beat estimates by 41.6% in Industrial REITs, UnitedHealth (UNH) beat by 28.8% in Managed Health Care, and Travelers (TRV) beat by 83.4% in Property & Casualty Insurance, while regional banks were mixed (Truist beat, Fifth Third and Regions missed). This week adds more data on the financials side: Charles Schwab (SCHW), Capital One (COF), and Chubb (CB) report Tuesday, and American Express (AXP) closes out the week Friday. Health Care Equipment gets a fresh data point from Thermo Fisher (TMO) on Thursday. Given last week's uneven bank results, the read-through to watch is whether credit quality and net interest income trends broaden the beat rate across Tuesday's reporters, which would reinforce the defensive-rotation thesis, or whether the mixed pattern from regional banks repeats in the larger, more diversified names.

The Week Ahead

The macro calendar is light this week: no CPI, PPI, or retail sales are scheduled. Weekly initial jobless claims post Thursday, and Friday brings S&P Global's flash manufacturing and services PMI along with new residential sales data, both offering a read on activity ahead of the Fed's July 29 rate decision. Earnings are the main event. Monday: Starbucks (SBUX) and Baker Hughes (BKR). Tuesday: Charles Schwab (SCHW), Danaher (DHR), Capital One (COF), Chubb (CB), Northrop Grumman (NOC), General Dynamics (GD), and 3M (MMM). Wednesday is the heaviest day: Alphabet (GOOGL), Tesla (TSLA), Texas Instruments (TXN), AT&T (T), and ServiceNow (NOW). Thursday brings RTX, Intel (INTC), T-Mobile (TMUS), Thermo Fisher (TMO), Honeywell (HON), Union Pacific (UNP), and Lockheed Martin (LMT). Friday closes with ExxonMobil (XOM), American Express (AXP), Verizon (VZ), and SLB.

Upcoming Earnings This Week

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