This was the week energy drowned out everything else. Brent crude pushed through one hundred dollars a barrel on Thursday for the first time since late May, closing more than seven percent higher at 100.69 dollars, with American WTI adding roughly six percent to 92.19 dollars. The trigger was familiar and unsettling at the same time. Attacks by Iran-backed Houthi militias on two Saudi oil tankers in the Red Sea exposed how fragile the alternative export route has become, at precisely the moment traffic through the Strait of Hormuz is already disrupted.
Friday brought a turn. Reports that Pakistan, with Chinese backing, is trying to revive talks between Washington and Tehran pushed Brent almost four percent lower to 96.78 dollars. Even after that decline, crude finished the week around ten percent higher. That weekly number is the only figure that genuinely matters for the inflation outlook. The rest is noise.
Earnings that were not enough
Big technology delivered results that looked impressive on paper. Alphabet reported earnings of 9.11 dollars per share against expectations of 2.88 dollars, on revenue of 103.62 billion dollars. The stock still weighed on the market, because the company lifted its 2026 capital expenditure guidance to between 195 and 205 billion dollars, up from 180 to 190 billion. Investors looked past the profit and saw only the bill.
Tesla fared worse. The shares lost almost fifteen percent on Thursday after a quarterly earnings miss, the sharpest intraday decline in over a year, while capital spending surged 142 percent to 5.79 billion dollars. Across the full week the damage came to nearly nineteen percent. The pattern is now recognisable. Spending on artificial intelligence is no longer rewarded as growth. It is punished as risk.
Semiconductors remain the weak link
Chips were again the epicentre. Thursday saw the Nasdaq fall 2.2 percent, the Dow Jones lose one percent and the S&P 500 slide 1.2 percent. On Friday a gauge of semiconductor firms dropped a further 4.3 percent while the Nasdaq 100 gave up more than one percent. A Korea-led selloff dragged the American memory complex down with it, with SanDisk sharply lower and Micron off more than six percent.
The most telling detail came from Intel. The company comfortably beat expectations on strong AI-related demand and still fell more than four percent on Friday, while the PHLX Semiconductor Index shed three percent. Good numbers offered no protection. That says more about positioning than about fundamentals.
Central banks pick a side
In Frankfurt the European Central Bank left rates unchanged on Thursday, but the tone was sharper than expected. Markets read Christine Lagarde's comments as opening the door to a September hike, and the STOXX 600 fell 1.3 percent to 638.5 points, its steepest one-day drop in over two weeks. The DAX closed 1.56 percent lower.
In Washington the decision arrives next week. The FOMC meets on 28 and 29 July under Chair Kevin Warsh, with markets pricing roughly a one in three chance of a July increase. Economists expect rates to stay in the 3.50 to 3.75 percent range, a fifth consecutive meeting without a move. Further out the curve now prices around an eighty percent probability of a hike by September. The year opened with expectations of cuts. Those have been fully reversed.
Precious metals caught between two forces
Gold sat trapped between geopolitics and rates. The metal ended the week near 4,050 dollars an ounce, after falling almost two percent in the previous session, as higher oil prices reinforced the case for rates staying elevated for longer. Silver showed more resilience, climbing close to two percent on Friday to above 58 dollars and compressing the gold to silver ratio further. Silver's industrial leg is doing the work that monetary demand alone cannot.
Where this leaves the markets
This was not a week of direction. It was a week of repricing. All three major American indices closed lower, led by the Nasdaq. The underlying mechanism matters more than the levels. Energy is lifting inflation expectations, central banks are shifting from patience to tightening, and the most highly valued equities are paying for it. That is a consistent chain, not a coincidence.
Next week brings everything together. The Fed decides on Wednesday, followed by second quarter GDP and PCE inflation data the day after, while Microsoft, Meta and Apple report. For portfolios this points to one conclusion. Position size now matters more than direction. Anyone treating the oil price as a side variable is ignoring the single most important input in the market today.
