Brent Tops $90 as Wall Street’s Big Tech Week Begins

Brent above $90 on 9th US strike on Iran. Nikkei closed. Alphabet and Tesla report Wednesday, Intel Thursday. S&P futures +0.2% ahead of Big Tech week.

TLDR

Wall Street starts the week on the defensive after Friday’s 1 percent S&P 500 drop closed out the first losing week in three, but US futures are edging higher this morning despite fresh Middle East escalation. Brent crude broke above $90 a barrel overnight as the United States carried out a ninth consecutive strike on Iran late Sunday. Japan’s Nikkei 225 is closed today for Marine Day after shedding 6.4 percent last week in the tech-led rout, and Kospi remained cautious with a 0.6 percent decline. This is a huge earnings week: Alphabet, Tesla, IBM and Texas Instruments report Wednesday after the close, Intel and T-Mobile report Thursday, and Verizon, SLB and NextEra hit Friday before the bell. Today is a quiet earnings slate (W.R. Berkley, Steel Dynamics, Domino’s Pizza) with June leading economic indicators at 10 AM ET. S&P 500 futures are up 0.2 percent and Nasdaq futures are up 0.4 percent, suggesting an attempt at a Monday bounce off Friday’s lows even with the oil shock in the background.

Market Regime

The tape enters the week caught between two forces that both hit at once. On one side, geopolitics: the US launched its ninth consecutive strike on Iran overnight and Brent crude cracked $90 a barrel for the first time since June. That is a direct threat to the disinflation story that lifted stocks in the first half of July after cool CPI and PPI prints. On the other side, an earnings-driven bull case that Bank of America’s Savita Subramanian is calling for a 5 percent beat versus consensus on S&P Q2 EPS, or roughly 28 percent year-over-year growth. Tech is expected to drive over half of that growth and semiconductors are forecast to grow around 130 percent year-on-year, which would set up a set-piece rebuttal to last week’s chip rout.

Fed positioning has also shifted. Dallas Fed President Lorie Logan, a 2026 FOMC voter, told a Houston audience Friday that “modestly higher interest rates would better balance the outlook and risks for the FOMC’s dual mandate goals.” That is the most specific call for a hike from any voting member since the July 28-29 meeting was locked in. CME FedWatch odds of a July hike had drifted to around 10 percent after last Tuesday’s cool CPI print, but Brent above $90 combined with hawkish Fed rhetoric will likely re-widen the debate before the meeting. The single most consequential print of the week is Alphabet Wednesday after the close: capex guide and cloud growth will decide whether the AI rerating that started last week extends or reverses.

Bullish Factors

• BofA calls for a 5 percent Q2 EPS beat: Savita Subramanian’s base case is roughly 28 percent year-over-year S&P earnings growth for Q2 with tech contributing more than half of the print. Semiconductor Q2 EPS is forecast at around 130 percent growth, the biggest print of any sector.
• Monday bounce set up in futures: S&P 500 futures up 0.2 percent and Nasdaq 100 futures up 0.4 percent despite the Iran headline and higher oil. That is a positioning signal that Friday’s selloff exhausted the incremental sellers.
• Big earnings week de-risks the tape: Alphabet, Tesla, IBM, TI on Wednesday; Intel, T-Mobile on Thursday; Verizon, SLB, NextEra on Friday. Any clean beat plus reassuring capex commentary from Alphabet or a margin beat from Tesla can restart the rally.
• ASX 200 opened green: Australia’s benchmark opened higher on commodities strength as Brent broke $90. Energy and materials leadership is the natural pressure-release valve when tech rolls over.
• Alphabet’s cloud franchise remains the AI winner: GOOGL sits above $4.2 trillion in market cap and Google Cloud growth plus AI monetization inside search are the specific line items Wall Street is most eager to see refreshed higher.
• Consumer set up positively into Q3: Friday’s University of Michigan preliminary sentiment print showed Americans feeling better about the economy as gas prices had eased. That data was compiled before Brent’s move above $90, so the reading is still constructive.

Bearish Factors

• Brent crude above $90: Ninth consecutive US strike on Iran late Sunday pushed the international benchmark above $90 a barrel, the highest level since June. Every additional day the strikes continue keeps a floor under crude and re-lifts headline inflation risk.
• Fed Logan calls for hikes: Dallas Fed President Lorie Logan told a Friday speech in Houston that “modestly higher interest rates would better balance the outlook.” First specific hike call from a voting member into the July 28-29 meeting.
• Semi rout not resolved: The VanEck Semiconductor ETF fell 6 percent last week, the PHLX Semiconductor Index is down 13 percent from its June peak, and Nikkei shed 6.4 percent on the week. Position clearing is not done and today’s Japan holiday delays the next test.
• Netflix and Intuitive Surgical hangover: Netflix -7 percent Friday on a weak Q3 guide and Intuitive Surgical fell more than 9 percent on ACA subsidy concerns. Two clean growth names taken lower in a single week.
• Moonshot AI Kimi K3 shock: Chinese startup Moonshot released Kimi K3 on Friday, calling it the world’s largest AI model and positioning it as a direct rival to US frontier models. That opens a fresh China-competition narrative into Alphabet’s Wednesday print.
• S&P 500 first losing week in three: Friday’s 1 percent drop capped an S&P losing week for the first time in three sessions and only the third losing week since March. Positioning is now more offside than any point in the last four months.

Asian Markets This Morning

Japan’s Nikkei 225 is closed today for Marine Day, which delays the next test of the AI-trade positioning after last week’s 6.4 percent decline. South Korea’s Kospi is trading down about 0.6 percent as the region digests continued Iran risk and the aftermath of last week’s brutal chip rout, in which the Kospi shed nearly 9 percent. Mainland China’s Shanghai Composite is lower at the open and the MSCI Asia-Pacific ex-Japan index is off around 0.3 percent.

Australia’s ASX 200 is the standout, opening higher on commodities leadership as Brent broke $90. Materials, energy, and financials are all leading. India’s Nifty 50 opened firmer as the domestic-consumption story remained intact through last week’s regional rout. Hong Kong’s Hang Seng is trading cautiously with tech under pressure and property higher. The overall pattern is a controlled decline rather than a fresh leg down, suggesting last week’s forced selling may have exhausted the near-term overhang even as headline risk from Iran remains live.

What Moved Wall Street Friday

Friday closed a difficult week. The S&P 500 fell 1.02 percent to 7,458 to close its first losing week in three and only its third losing week since March. The Nasdaq Composite dropped 1.40 percent to 25,520 and finished the week down 2.90 percent as the semiconductor selloff deepened. The Dow Jones Industrial Average lost 0.77 percent to 52,146. The VanEck Semiconductor ETF (SMH) was down 6 percent for the week. Communication services was the worst-performing sector on Friday, down 2.9 percent, with consumer cyclicals also weak; energy was the only clean gainer as Brent extended its climb.

Netflix fell 7 percent Friday after Thursday’s weak Q3 revenue guide. Intuitive Surgical dropped more than 9 percent on Affordable Care Act enhanced-subsidy expiration concerns hitting DaVinci procedure volumes. Alphabet slid as investors rotated out of AI bellwethers on the Moonshot AI news. Travelers jumped 9 percent on a Q2 earnings beat and Abbott Labs rose almost 11 percent after raising full-year guidance. On the data side, June housing starts came in at 1.321 million SAAR (up 4.6 percent month over month) and building permits ticked up 0.2 percent to 1.397 million SAAR, both roughly in line to slightly better than consensus. The preliminary University of Michigan July sentiment reading also came in constructive as gas prices had eased in the survey period.

Assets in Focus

GOOGL

Alphabet reports Wednesday after the close and is the most important individual print of the entire week. Consensus wants around $2.19 EPS on approximately $95 billion in revenue. The four watch items are Google Search advertising growth in the face of AI-answer disintermediation, Google Cloud revenue and profitability (the AI-monetization proof point), capital-expenditure guidance for the remainder of 2026 into 2027, and any commentary on the Moonshot Kimi K3 model as competitive pressure. Alphabet’s market cap sits above $4.2 trillion and the stock has been the cleanest way to own the AI theme without semiconductor tape risk. A beat with reassuring capex language is the single biggest positive catalyst for the tape this week.

TSLA

Tesla reports Wednesday after the close with consensus of roughly $0.42 EPS on $24-25 billion in revenue. Q2 deliveries printed early in July and were roughly in line, so the print is about margins and the forward narrative. Focus items are automotive gross margin ex-credits, the Cybercab rollout timeline and Q3 production guide, the robotaxi service unit economics as the Austin launch continues, and Elon Musk’s commentary on capital expenditures given the raised guides now flowing from ASML and TSMC across the AI supply chain. Any sign that Tesla is holding automotive margin at 15-16 percent while ramping robotaxi is the bullish scenario; a margin miss into $24B revenue is the bearish one.

INTC

Intel reports Thursday after the close. Consensus wants around $0.03 EPS on approximately $12.5 billion revenue. The print is about the foundry ramp and CEO Lip-Bu Tan’s first update as chief executive. Watch items include Intel Foundry customer wins for 18A, PC and data center segment margins, capex profile revisions, and any commentary on the CHIPS Act funding flow. Intel is the only major US chip name that has NOT participated in the AI rally, so a clean beat plus a foundry win announcement can force short-covering into a heavily bearish setup.

BRENT / XLE

Brent crude broke above $90 a barrel overnight as the US launched its ninth consecutive strike on Iran on Sunday night. WTI is trading in the $86-87 range in early US premarket. The energy sector was the only clean S&P 500 winner last week and has resumed leadership as the AI trade cools. Watch levels: Brent $92 is the June high area (immediate resistance), Brent $88-89 is the round-number support that flipped this weekend. Any Iranian action against tanker traffic or oil infrastructure in the Gulf can take crude to $95 quickly.

NSDQ100

The Nasdaq 100 is at a technical fulcrum. US100 futures are up 0.4 percent overnight after Friday’s decline, but the index needs to hold 25,000 as the psychological plus 50-day support cluster into Alphabet and Tesla on Wednesday. Resistance is 25,600 (Friday session high area) and then 26,000 (June breakout retest). A clean Monday bounce that holds 25,300 sets up Wednesday for a positive earnings-driven repricing; a fresh break below 25,000 reopens 24,500.

W.R. Berkley / Steel Dynamics / Domino’s

Today’s earnings docket is thin. W.R. Berkley reports on P&C insurance rate trends into hurricane season. Steel Dynamics is the read on steel prices, service center demand, and any impact from the ongoing tariff regime. Domino’s Pizza is the small-ticket consumer read and the QSR margin story. None of these are individually market-moving, but a Domino’s same-store sales beat plus a Steel Dynamics margin beat would confirm the mid-market resilience story going into Tuesday’s much larger docket.

Index Levels to Watch

S&P 500 (7,458 close Friday)

• Immediate resistance: 7,540 (Thursday close area, first recovery target)
• First support: 7,380 (rising 50-day area)
• Major support: 7,280 (June breakout retest)

Nasdaq Composite (25,520 close Friday)

• Immediate resistance: 25,880 (Thursday close)
• First support: 25,000 (psychological and 50-day cluster)
• Major support: 24,500 (June range base)

Brent crude ($90+ overnight)

• Immediate resistance: $92 (June high area)
• First support: $88 (round number, weekend breakout base)
• Major support: $85 (last week’s pre-escalation range top)

Disclaimer

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