Morning Market Brief – 2026-07-26

Ahead of us is a week that analysts unanimously refer to as a "super-week." After turbulent days in which the market brutally reassessed the costs of the artificial intelligence (AI) revolution, investors are bracing for an accumulation of key macroeconomic data, major central bank decisions, and earnings reports from tech giants. The past week showed that markets are becoming increasingly sensitive to rising capital expenditures, while the geopolitical backdrop and new U.S. tariffs add further variables to the global equation.

Geopolitical Environment

• Oil market correction and diplomatic rumors. In July, we observed a strong, double-digit rise in Brent crude prices, driven by the escalation of the Middle East conflict and disruptions to trade routes. Towards the end of the week, however, black gold prices pulled back by around 4%, falling from the psychological level above $100 to around $97 per barrel. Some commentators link this cooling of sentiment to unofficial reports of possible new diplomatic initiatives between the US and Iran. Additionally, according to market reports, the OPEC cartel announced higher production targets, which helped relieve some pressure on prices following their recent peak. (Sources: Trading Economics; Rigzone; Bloomberg; The Guardian; IMF Global Markets Monitor).

Key Highlights Today

• Steep costs of the AI revolution hit Big Tech valuations. We recently wrote about market anxiety over massive capital expenditures on artificial intelligence infrastructure. These fears materialized in a massive sell-off—the group of largest tech companies (the so-called "Magnificent Seven") lost around $797 billion in market capitalization during a single recent session, with their related index falling by about 4.8%. The catalyst included results from Alphabet, which disappointed the market with guidance for higher infrastructure spending and negative free cash flow (FCF) in Q2. Tesla joined the decline (plunging over 14% in a single session after announcing sustained high costs), as did Intel, whose shares gave back earlier gains, falling roughly 8% on concerns over foundry business expansion costs. This puts upcoming financial reports this week from Apple, Microsoft, Amazon, and Meta Platforms under intense scrutiny. (Sources: Reuters; Hedgeweek; Fox Business; Pluang; CMC Markets; ING Think).

• Central bank "super-week" to set market direction. The final days of July mark a true marathon of monetary policy decisions. The Federal Reserve (Fed) draws the most attention, announcing its decision on Wednesday. Most analyses expect US interest rates to remain unchanged (in the 3.50–3.75% range), although some commentators do not rule out a 25 basis point hike in response to persistent inflationary pressure. On Thursday, the Bank of England (BoE) will announce its decision, while the Bank of Japan (BoJ)—grappling with historical weakness of the domestic currency—will meet overnight Wednesday to Thursday. (Sources: LiteFinance; CMC Markets; ING Think; The Straits Times).

• Broad new US tariffs under the pretext of combating forced labor. As of July 24, new global tariffs of 10% and 12.5% imposed by the US administration on a wide range of goods from dozens of countries took effect. The new regulations were introduced under Section 301 of the Trade Act of 1974, with the official justification being to pressure partners into more effectively eliminating forced labor from supply chains. In practice, these tariffs replace an earlier general 10% duty and cover the vast majority of US imports, excluding certain energy commodities, fertilizers, and selected food categories. (Sources: Reuters; The Guardian; CBS News).

• ECB cautious after July pause, September remains open. The European Central Bank, in line with earlier announcements, kept key interest rates unchanged (including the deposit rate at 2.25%). However, the post-meeting statement is worth noting—the ECB stressed that the effects of the recent energy shock on inflation are not yet fully reflected in the data. President Christine Lagarde noted that some Governing Council members still see potential for monetary tightening, meaning upcoming meetings, including September's, remain open and strictly dependent on incoming economic data. (Sources: European Central Bank; Econostream Media; Morningstar Europe).

Market Background

• A calmer start to the week on equity markets. Following last week's jitters, global markets are taking a breath. Futures on major US indices are pointing higher (supported, among other things, by earlier record highs in the Dow Jones index), while the European Euro Stoxx 600 is seeing a mild correction. Treasury yields in the US and Europe are lower, pointing to a return of safe-haven demand, while the US dollar remains stable against a basket of currencies. (Sources: IMF Global Markets Monitor).
• Historic weakness of the yen fuels speculation. The Japanese currency weakened to around 162.3 per dollar, approaching its lowest levels in nearly 40 years. Such dynamics just days before the Bank of Japan meeting spark heavy market speculation regarding potential currency intervention by local authorities. (Sources: IMF Global Markets Monitor).
• Bank of Russia cuts rates, but signals a pause. Last Friday, the Russian central bank lowered its key rate by 25 basis points to 14.0%. At the same time, however, the institution revised up its inflation forecast for year-end 2026 (to 6–7%) and lowered GDP growth estimates (0–1%). Phrasing regarding considerations of further rapid cuts was removed from the statement, which analysts interpret as a signal of an impending pause in the easing cycle. (Sources: Bank of Russia; Morningstar / Dow Jones; Interfax).
• Record foreign offering on the US exchange. South Korean memory chip maker SK Hynix has kicked off marketing efforts related to an American Depositary Receipt (ADR) offering (certificates allowing foreign company shares to be traded in the US). The estimated offering value is around $29 billion, which would make it one of the largest such transactions by a foreign entity on Wall Street. (Sources: IMF Global Markets Monitor).

Key Events to Watch

• 27.07 (Monday), 10:00 – Germany: Ifo Business Climate Index. A key indicator of German business sentiment. It will be closely scrutinized against the backdrop of a slowing recovery in the eurozone's largest economy.
• 27.07 (Monday), 14:30 – US: Durable Goods Orders. Advance data will show how business demand and capital expenditures by US firms are shaping up ahead of the key Fed meeting.
• 28.07 (Tuesday), 16:00 – US: Consumer Confidence (Conference Board). This indicator will help gauge how citizens view the labor market and their personal financial situation, which in turn feeds into spending expectations.
• 29.07 (Wednesday), 03:30 – Australia: CPI Inflation. Official Q2 data will play a decisive role in the upcoming steps of the Reserve Bank of Australia (RBA).
• 29.07 (Wednesday), 20:00 – US: FOMC Rate Decision. The most critical macroeconomic event of the week. Markets will look for clues regarding the interest rate trajectory in the second half of the year.
• 30.07 (Thursday), 13:00 – UK: Bank of England Rate Decision. The BoE meeting could bring significant volatility to the pound, especially if the vote split within the Monetary Policy Committee is tight.
• 30.07 (Thursday), 14:30 – US: Core PCE Price Index & Advance GDP Estimate. A double whammy of data from the US. The PCE index is the Fed's preferred inflation metric, while Q2 GDP will reflect the economy's overall resilience.