11.7.26

Closing Recap

The week ending July 10, 2026, was a textbook study in geopolitical whipsaw. Markets opened the shortened trading week on a high note, with AI-tied stocks surging and the Dow Jones Industrial Average cracking 53,000 for the first time ever on Thursday. But the mood darkened swiftly as U.S.-Iran tensions reignited in the Gulf, triggering a 5%+ spike in Brent and WTI crude and sending equities into a tailspin before a remarkable intraday recovery. By Thursday and Friday, cooler heads prevailed – oil retreated from its highs, tech stocks led a broad rebound, and Treasury yields snapped a seven-day rising streak. The S&P 500 finished the week up 2.73%, the Dow gained 1.18%, while the Nasdaq Composite rallied approximately 3.76% from its June 26 close.

The Russell 2000 small-cap index bucked the trend, slipping 0.58% as the risk-off trade briefly gripped the lower end of the market. Gold finished the week lower despite safe-haven bids, with COMEX gold down -1.32% weekly to near $4,120, though it surrendered ground on Friday as rate-hike fears resurfaced. Bitcoin surged 7% on the week, reclaiming $64,000, while the 10-year Treasury yield edged up 12 basis points to 4.56% on hawkish Fed repricing. The Dollar Index (DXY) softened 0.40% to 100.95 as the euro and sterling found their footing.

Key Takeaways (The Week in 60 Seconds)

• S&P 500 powered to 7,555.05, notching a +2.73% weekly gain as dip-buyers swarmed after Wednesday’s Iran scare; the Dow closed at a record 52,487.41, up 1.18% on the week.
• Nasdaq Composite surged ~3.76% for the week, with semiconductor and AI names leading the charge after a bruising June; the index closed near 26,250.
• Oil whipsawed violently: Brent crude spiked above $78 on Wednesday after Trump’s “ceasefire is over” comment, then retreated to close the week near $76.19 – still up over 8% from June 26. WTI finished near $71.96, up nearly 4% weekly.
• Citi’s base case holds Brent averaging $75 in Q3 2026, easing to $70 in Q4 and $65 in 2027, assuming a U.S.-Iran deal materializes and the Strait of Hormuz reopens – Trump’s sensitivity to equity and bond markets seen as the catalyst for renewed talks.
• Gold closed near $4,120.20, up a modest 0.58% on the week but down 0.69% Friday as rising rate expectations offset safe-haven demand; silver gained ~4.4% to trade near $60.12.
• Silver declined 1.24% weekly to $59.25 as industrial demand concerns offset geopolitical risks.
• Bitcoin ripped +7% to close near $64,230.84, breaking a brutal June downtrend; spot Bitcoin ETFs saw $510 million in inflows over three sessions, halting a 10-day, $2.73 billion outflow streak.
• Forex: The Dollar Index softened 0.40% to 100.95; EUR/USD climbed to 1.1431 (+0.61%), GBP/USD surged 1.77% to 1.3422, while USD/JPY held near 161.78 as Japan’s producer prices jumped 7.1% in June.
• Treasury yields firmed: The 10-year note yield rose to 4.56%, up roughly 12 bps on the week, as markets repriced hawkish Fed risk following the Iran escalation.
• Fed expectations shifted hawkish: Rate-hike probabilities jumped post-Iran tensions; Fed funds futures now price 32 bps of tightening by year-end (78% probability of no change at next meeting), while the RBNZ leads with 48 bps priced.
• Week Ahead Focus: U.S. June CPI (Tue), Fed Chair Warsh’s Congressional testimony (Tue-Wed), Q2 earnings kickoff with JPMorgan, BofA, Citi, Goldman Sachs (Mon-Tue), and Bank of Canada rate decision (Wed).

Looking Ahead

“CPI, Warsh, and Earnings – The Triple Threat” – The primary tension entering next week is whether Tuesday’s June CPI report (headline expected -0.1% MoM, core +0.3% MoM) will validate the Fed’s cautious stance or force a hawkish rethink. Traders enter the week of July 13-17 facing a classic tension: “Macro Data Meets Geopolitical Fatigue.” After a week where headlines from the Strait of Hormuz whipped markets into a frenzy, the focus shifts to hard data and the opening act of Q2 earnings season. The June U.S. CPI report looms as the single most important data point, with headline inflation expected to cool to 3.7% year-on-year while core CPI holds stubborn at 2.9%. 

Fed Chair Kevin Warsh’s semi-annual Congressional testimony will be scrutinized for any hint of his hawkish leanings – especially after the FOMC’s June meeting dropped its easing bias and emphasized it would “deliver price stability.” Meanwhile, financials reporting (JPM, Citi, BofA, Goldman) and key tech names (ASML, TSMC, Netflix) will test whether the AI trade can justify its premium. The question haunting desks: Can earnings growth offset the specter of higher-for-longer rates, or will the Fed’s inflation fight finally crack the equity rally?

Weekly Market Narrative: The Strait of Hormuz Squeeze

This was the week where geopolitics tried to steal the macro narrative – and almost succeeded. The U.S.-Iran ceasefire, already fragile, shattered on Wednesday when Trump declared it “over” following Iranian attacks on Kuwaiti and Bahraini targets and fresh strikes on commercial shipping in the Strait of Hormuz. Oil markets went into overdrive: Brent spiked above $78, WTI touched $76, and energy traders braced for a supply shock that never quite materialized. By Thursday, reports that negotiations would continue despite the escalation – and that Iran had “called a while ago” wanting to make a deal – cooled prices. The rapid de-escalation mirrored a broader market pattern: stocks dipped, then ripped, with the Nasdaq’s 1.3% surge on Thursday epitomizing the “buy the dip” reflex that has defined 2026.

Index	Last Closing Level	Daily Change	Daily Change %	Weekly Change % / Trend
DJ Industrials	52,487.41	+139.02	+0.27%	+1.18% / Record High
S&P 500	7,555.05	+11.41	+0.15%	+2.73% / Bullish
Nasdaq	~26,250 (est.)	~+43	~+0.16%	~+3.76% / Tech Rebound
Russell 2000	2,992.54	+36.15	+1.22%	-0.58% / Lagging

Treasury yields’ persistent grind higher – breaking above 4.55% before easing Friday – signaled that bond vigilantes are watching inflation risks more closely than equity bulls. The VIX’s relatively contained spike to the mid-16s and retreat to 15.68 suggested options markets aren’t pricing sustained chaos, but the Fear & Greed Index’s neutral 47 reading hints at indecision beneath the headline numbers.

Market Health Analysis:

• Sentiment: Fear & Greed Index at 47 (Neutral) – neither panic nor euphoria; VIX at 15.68 suggests complacency despite geopolitical risks. The market’s ability to absorb Iran headlines and rally suggests resilient risk appetite, but the narrow leadership (tech carrying) is a yellow flag.
• Fundamentals: Sticky inflation remains the dominant macro theme. June core CPI is forecast at 2.9% YoY, still well above the Fed’s 2% target. The June non-farm payrolls miss (57K vs. ~100K expected) briefly fueled dovish hopes, but the Iran-driven oil spike has reignited inflation fears. Consumer spending showed resilience in May (+0.9% retail sales), but real disposable income is falling.
• Technicals / Sector Divergence: The S&P 500 trades comfortably above its 50-day moving average, but breadth is deteriorating. Tech’s outperformance (Nasdaq +3.76% vs. Russell -0.58%) signals a “haves vs. have-nots” market. The 10-year yield’s push toward 4.6% before retreating tested equity valuations; a sustained break above 4.75% would threaten the bull case.

Economic Data Calendar: July 13–17, 2026

Macro Data Landscape: A blockbuster week headlined by U.S. CPI, Fed Chair Warsh’s Congressional debut, and the kickoff of Q2 earnings season.

MON (July 13): 

• No major releases scheduled; earnings: Delta Airlines (pre-market) 

TUE (July 14): 

• U.S. June CPI (headline MoM -0.1% expected, YoY 3.7%; core MoM +0.3%, YoY 2.9%); 
• Fed Chair Warsh testifies before House Financial Services Committee; 
• UK GDP monthly estimate; 
• Germany ZEW economic sentiment. 
• Markets closed in France (Bastille Day observed).
• U.S. Q2 earnings season begins – JPMorgan, Bank of America, Citi, Goldman Sachs, Wells Fargo all report. 

WED (July 15): 

• Bank of Canada rate decision (expected hold at 2.25%); Warsh testifies before Senate Banking Committee; 
• U.S. June PPI; 
• China Q2 GDP (YoY 4.4% expected, QoQ 0.9%); China industrial production & retail sales; 
• Morgan Stanley, BlackRock, ASML report earnings.

THU (July 16): 

• U.S. June retail sales (MoM +0.3% expected); 
• U.S. initial jobless claims; 
• Philadelphia Fed manufacturing index; 
• TSMC, UnitedHealth, Netflix report earnings.

FRI (July 17): 

• U.S. June industrial production; 
• University of Michigan preliminary consumer sentiment for July; 
• U.S. housing starts & building permits.

Asset Class Deep Dive: Commodities, Currencies, Crypto & Treasuries

Energy markets dominated the narrative this week as the U.S.-Iran ceasefire teetered on collapse. Brent crude’s spike above $78 and WTI’s push toward $76 on Wednesday were the most dramatic oil moves since the conflict began in February. The rapid retreat – Brent finished near $76, WTI near $72 – reflected traders’ conviction that neither side wants a prolonged energy crisis. Citi’s $75 Q3 Brent base case assumes a deal ultimately materializes, with Trump’s well-documented sensitivity to stock market and bond market volatility serving as the diplomatic backstop.

Gold finished the week lower, with COMEX gold down -1.32% to near $4,120 – showed the metal’s traditional safe-haven appeal is being undermined by rising rate expectations; when geopolitical risk simultaneously stokes inflation fears, gold’s zero-yield profile becomes a liability. Silver outperformed, climbing ~4.4% to $60.12, buoyed by industrial demand hopes and its tighter supply dynamics.

Asset	Last Level	Friday’s Change	Weekly Change / Note
WTI Crude	$71.96	-0.17%	+3.94% / Iran spike, then retreat
Brent Crude	~$76.19	-0.15%	+8.07% / Ceasefire “over” then calmer
Gold	$4,120.20	-0.69%	+0.58% / Rate fears capped safe-haven bid
Silver	~$60.12	-0.43%	+4.37% / Industrial demand support
EUR/USD	1.1415	+0.08%	+0.61% / ECB-Fed divergence watched
USD/JPY	161.78	-0.37%	+0.07% / Intervention watch continues
10-Year Note	4.56%	-0.02 pp	+0.12 pp / Hawkish repricing
Bitcoin	$64,230.84	+1.64%	+7.02% / ETF inflows return

FX Breakdown & Crypto:

• USD/JPY: The pair held near 161.78, nearly unchanged on the week, but the path of least resistance remains higher. Japan’s June producer prices surged 7.1% – the fastest since March 2023 – reflecting energy cost pass-through from the weak yen. Finance Minister Katayama’s jawboning about encouraging pension funds to buy domestic assets provided brief relief, but without actual intervention, 165 remains the line in the sand. The BoJ’s 23 bps of priced tightening is the least among major central banks, keeping yen weakness entrenched.
• EUR/USD: The euro briefly declined to 1.1415, down -0.20% on the week, as the Dollar Index softened. However, the ECB’s 37 bps of priced tightening (65% probability of no change at next meeting) lags the Fed’s repricing, suggesting any euro strength may be fleeting. The eurozone’s growth deficit versus the U.S. remains a structural headwind.
• GBP/USD: Sterling was the week’s FX star, surging 0.36% to 1.3402. UK macro data has surprised to the upside, and the BoE’s 27 bps of priced tightening (87% probability of no change) reflects a more hawkish stance than the ECB. Political stability post-election has also bolstered sentiment.

Crypto & Treasuries: Bitcoin’s 0.90% weekly rally was driven by a critical reversal in ETF flows and was building on previous massive 7% gains. After $4.5 billion in June outflows – the worst month since spot ETFs launched – early July saw $510 million in three-session inflows, with BlackRock’s IBIT leading. Citigroup estimates every $100M in ETF inflows correlates with a 53 bps same-day BTC price move; the cumulative effect suggests the inflow window contributed meaningfully to Bitcoin’s recovery from its July 1 low below $58,000. 

However, with the average ETF investor entry near $83,800, most remain underwater by ~26%. Treasury yields’ grind higher reflects the market’s repricing of Fed hawkishness; the 10-year’s break above 4.55% tested equity valuations but the retreat to 4.56% Friday offered relief.

What to Watch Next Week

• U.S. June CPI (Tuesday): The single most important data release. A hot print (>3.9% headline, >3.0% core) could send yields surging and crush the equity rally; a soft print validates the disinflation narrative and extends the bull run.
• Warsh’s Congressional Testimony (Tuesday-Wednesday): The new Fed Chair’s first Capitol Hill appearance. Markets want clarity on his hawkish/dovish positioning. Any hint that he won’t rule out a July hike if inflation surprises will send the dollar flying.
• Q2 Earnings Kickoff (Monday-Tuesday): JPMorgan, Citi, BofA, Goldman Sachs report. Loan loss provisions, net interest income guidance, and commentary on consumer health will set the tone for financials. Weakness here would signal broader economic cracks.
• Bank of Canada Decision (Wednesday): Not expected to hike (90% probability of no change), but the statement will be parsed for hawkish shifts after the RBNZ’s surprise tightening.
• China Q2 GDP (Wednesday): Expected at 4.4% YoY, down from 5.0% in Q1. A miss would amplify global growth concerns and potentially boost safe-haven flows.