US stocks ended Wednesday’s regular session with modest losses as traders refused to make big moves ahead of key after-bell earnings. The S&P 500 slipped 0.1% to close at 7,499.73, the Dow Jones Industrial Average settled just below flat at 52,219.35, and the Nasdaq Composite lost 0.6% to 25,690.90. Six of eleven S&P 500 sectors finished higher, led by utilities (+2.3%), while communication services (-1.3%) was the weakest.

The real action came after the close. Alphabet dropped almost 5% in extended trading after lifting its full-year capex forecast to $195–$205 billion — up from the prior $180–$190 billion range — despite delivering an 82% jump in Google Cloud revenue to $24.8 billion, smashing the $22.46 billion consensus. Total revenue rose 24% year-over-year to $119.8 billion and operating margin expanded to 34%, but the company reported negative free cash flow for the first time in its history, burning $5.9 billion in the quarter. “After a negative cash flow quarter, the new raise in capex does not sit well for Alphabet,” said Thomas Monteiro, senior analyst at Investing.com. “The market’s most reliable cash generators are now spending more than they bring in.”

Tesla also fell 4.2% after hours following a significant profit miss — adjusted EPS of 33 cents versus the 51-cent consensus — and its first quarter of negative free cash flow in more than two years. Revenue of $28.2 billion beat expectations on strong vehicle sales of over 480,000 units, but steep discounting and a 47% surge in operating costs compressed profitability. Super Micro Computer was the session’s standout, soaring nearly 20% after issuing preliminary gross margin guidance at almost double its historical norm and disclosing total new orders exceeding $60 billion. The Philadelphia Semiconductor Index remains in bear market territory, down more than 20% from its June record.

The Magnificent Seven have lagged the broader S&P 500 in 2026 as AI spending scrutiny intensifies.

Global stock indices — 22 July 2026. Europe gained 0.6%, the UK rose 1.2% to a near 5-month high, while the Nasdaq lagged at -0.5%.

The Middle East conflict escalated sharply on Wednesday after Iran-backed Houthi militants attacked two Saudi Arabian tankers — the Encelia and Layla — with missiles and drones in the Red Sea, marking the first strikes on oil tankers in the waterway and opening a dangerous new front in the regional conflict. UK Maritime Trade Operations confirmed a vessel was hit southwest of Saudi Arabia’s Al Shuqaiq, causing a fire on board. The Red Sea had become Saudi Arabia’s key alternative export route to bypass the Strait of Hormuz, with shipments from Red Sea ports climbing to record levels in recent weeks.

President Trump vowed to bomb and destroy “one bridge or power plant” — including those near Tehran — for every ship attack in the Strait of Hormuz by Iran. Tehran responded immediately: the semi-official Tasnim news agency reported that Iran would target regional infrastructure and energy facilities tied to US interests if Washington struck bridges or power plants. The US and Iran have now engaged in tit-for-tat strikes for eleven consecutive days, with four US service members killed in action in the past week.

Diplomatic channels remain fragile. Secretary of State Marco Rubio, speaking at the ASEAN summit in the Philippines, said the US remained “open and willing to engage in positive, constructive negotiations” but that Iran “don’t seem to be serious about that.” A senior Iranian official quoted by Reuters said Iran has received a proposal from mediators for a 10-day ceasefire to rescue the June framework deal. Meanwhile, the World Bank’s chief economist warned that an escalating Middle East war could slash global growth to 1.3% in 2026.

Oil surged on Wednesday and extended gains into Thursday trading. Brent crude briefly topped $95 a barrel in post-settlement trading — its highest since June 11 and a six-week peak — closing up 3% at $93.70. West Texas Intermediate rose 1.1% to $87.80. The Houthi attack on Saudi tankers in the Red Sea compounded existing supply disruptions through the Strait of Hormuz, where Iran has attacked vessels in recent days, and crude is now up 30% in just three weeks. Vessel traffic through the Strait has dropped significantly following eleven consecutive days of US-Iran strikes.

The energy shock is reverberating through the real economy. The average US 30-year mortgage rate is at its highest in almost a year, average gas prices are back above $4 a gallon, and the 30-year Treasury yield is having its longest stretch above 5.00% since 2003. US Treasury yields rose 3–5 basis points across the curve on Wednesday, with oil-driven inflation fears weighing on bonds. Money markets are pricing a 30% chance of a Fed rate increase at next week’s meeting and a 70% probability of a hold.

Spot gold eased 0.2% to $4,121.48 an ounce. The yen remained pinned above 163 per dollar — a 40-year low — with the two-year JGB yield hitting 1.475%, its highest since 1995. MUFG strategist Lee Hardman noted that “Japanese policymakers are facing an uphill battle to support the yen while the price of oil jumps back up towards $100 per barrel.” The Australian dollar slipped 0.1% to $0.6990. The euro held steady at $1.1408 ahead of the ECB decision. Bitcoin rose 0.1% to $65,969.76.

Commodities, energy & FX — 22 July 2026. Oil dominated with Brent closing in on $95/bbl; gold eased while the yen held at 40-year lows.

Alphabet’s results set the tone for what promises to be a pivotal fortnight for the AI trade. Google Cloud’s 82% revenue growth and $514 billion backlog demonstrate that enterprise AI demand remains voracious — nearly 90% of Fortune 100 companies now use Gemini Enterprise, with models processing 22 billion API tokens per minute. Yet the company’s decision to raise capex guidance by $15 billion and its first-ever negative free cash flow quarter have sharpened questions about when spending translates into sustainable returns. Big Tech is collectively expected to spend over $700 billion this year on AI, with Morgan Stanley pegging the 2027 total at more than $1 trillion.

The AI model race added another wrinkle. Alphabet acknowledged delays to its flagship Gemini 3.5 Pro and confirmed it has started training Gemini 4, its next-generation frontier model. CEO Sundar Pichai conceded Google needs to “improve” in AI coding, where rivals Anthropic and OpenAI have gained traction. Meanwhile, OpenAI disclosed that one of its autonomous AI agents went rogue during a security test, autonomously hacking AI startup Hugging Face — an incident it described as “unprecedented.”

Tesla delivered record Q2 vehicle sales but steep discounting compressed profitability well below expectations.

Australian shares are poised for a positive open. ASX 200 futures were up 72 points (0.8%) to 8,839 ahead of what shapes as a busy domestic session. The headline event is Australia’s June employment report at 11:30am AEST, with NAB expecting the unemployment rate to hold at 4.4% on a 15,000 employment gain. The bank noted that Q2 unemployment is tracking above the RBA’s May Statement on Monetary Policy forecast of 4.2%.

In corporate news, Macquarie Group announced a surprise CEO succession: Shemara Wikramanayake will step down after eight years in the top job, with banking and financial services head Greg Ward — a 30-year Macquarie veteran and former 14-year CFO — to succeed her. The announcement came ahead of Thursday’s annual meeting, where the board faced expected scrutiny over cultural and regulatory issues following last year’s first-ever remuneration strike.