Weekly Market Performance — July 17, 2026

LPL Research provides its Weekly Market Performance for the week of July 13, 2026. Markets faced a mixed backdrop this week as investors balanced escalating geopolitical tensions, artificial intelligence worries, cooling inflation data, and the early innings of earnings season. Renewed conflict in the Middle East lifted energy prices and revived inflation concerns, while scrutiny of elevated technology valuations, souring sentiment across global equity markets. Amid cautious equity trading, fixed income markets rose on better-than-expected inflation data and ebbing rate hike expectations. Commodity markets rose, led by energy prices on fresh supply disruption risks.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 7/17/26 @ 3:07 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Renewed tensions in the Middle East collided with crowded chip stocks and AI valuation concerns, leading major U.S. averages lower on the week. The recent wave of concerns that the rally in chipmakers and the AI trade may have gone too far came to a head after Taiwan Semiconductor’s (TSMC) increased spending plans overshadowed a beat and raise quarter, elevating worries that massive investments may not translate into returns for some of the globe’s largest companies. Sentiment soured further on Friday after Chinese AI pioneer Moonshot’s model performance rivaled that of OpenAI and Anthropic, sparking fresh jitters around open-source model competition. Reports just one day prior that Google-parent Alphabet (GOOG/L) is months behind schedule in releasing its latest AI model added to selling, but a floor was put under losses as dip buyers appeared to wade in heading into the weekend.

Simultaneously, the U.S. and Iran traded strikes around the Persian Gulf, sending oil prices higher and bringing inflationary pressures back into view. However, markets generally shrugged off the ramp in hostilities and potential economic implications after consumer and wholesale inflation data for June both arrived cooler than expected. The unofficial kickoff for earnings season was also a focal point, highlighted by America’s biggest banks broadly besting earnings expectations and posting record trading revenues. On the other hand, shares of Netflix (NFLX) were pressured lower after the streaming giant forecasted a second consecutive quarter of slowing sales growth.

International Equities: The European benchmark STOXX 600 edged lower over the last five days. Higher energy prices and renewed discussions of supply constraints were the go-to excuses for weakness in the Eurozone this week, as technology selling was a relatively smaller headwind. Risk appetite generally remained cautious, however, as markets noted a slight downward revision to 2026 consensus economic growth forecasts. On the earnings front, energy producer BP gained on lower net debt figures and improved refining margins driven by Mideast disruptions, while chip equipment maker ASML’s beat and raise was a green shoot for the AI theme.

Major Asian exchanges ended lower amid a risk-off week across the region. Korea faced the sharpest selling over a four-day week as stretched chipmaker positioning was unwound, while Taiwan also sank after Taiwan Semiconductor’s report fanned investor worries. Amid AI and chip-related selling, investors turned toward relatively beaten down shares in Hong Kong, which was a relative outperformer despite closing lower. Mainland China dropped on AI concerns despite briefly receiving some support from Beijing unveiling a five-year consumption plan aimed at expanding retail sales and plans to increase the affordable housing supply and better regulate the rental market. Japan ended lower with geopolitical worries in focus, in addition to tech worries.

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, as measured by the Bloomberg Aggregate Index (Agg), gained ground. New Fed Chair Kevin Warsh’s tenure is expected to be a key theme in fixed income markets throughout 2026. And while this week’s congressional testimony provided mostly political theater, we were able to glean some information on how he plans to guide monetary policy. 

Warsh told senators the committee has “no tolerance” for persistently elevated inflation and didn’t sound like he’s in a hurry to cut, which is likely to keep the front end anchored as markets shouldn’t price near-term cuts. Additionally, he continued to iterate the preference for no or little forward guidance and less so-called Fed handholding for markets, which is likely to lead to wider rate ranges and more term premium. The new central bank chair also stated that balance sheet changes need to be telegraphed, with would be expected to reduce tail risk of a disorderly long-end repricing, but keeps QT-driven supply pressure on the 10s/30s parts of the yield curve. Lastly, pressed on Trump pressure, Warsh committed to “follow the law and follow the data” and Fed independence. This is supportive for long-end credibility premium and any political-capture risk priced into term premium can partially unwind. 

Overall, rate cuts are likely off the table this year, but we still think the bar for a hike is higher than a Fed on hold throughout the year. Market-implied inflation expectations remain well anchored, which should provide cover for the Fed to wait to make a decision, and with this week’s soft inflation prints, markets have unwound some rate hike pressures. However, even if the Fed were to hike rates once or twice, the impact on Treasury yields would likely be minimal as markets continue to expect the Fed to hike rates at least once this year. 

Commodities and Currencies: The broader commodity complex built on last week’s advance. Crude oil led the charge, rallying over 10% as hostilities in the Middle East rekindled worries of energy supply disruptions as six straight days of strikes limited tanker traffic through the Strait of Hormuz. While the broader market reaction was relatively muted, record tightness in U.S. and European fuel markets remained top of mind in commodity markets. Elsewhere, gold prices declined amid still elevated inflation worries and some hawkish-leaning Fed takeaways, despite two softer-than-expected inflation prints this week. Silver also declined and copper steadied. In currencies, the dollar was little changed amid the push and pull of inflation data and central banker commentary. The British pound strengthened on the week amid discussions that Prime Minister front-runner Andy Burnham will select a fiscally responsible Chancellor, rather than an expansionist.

Economic Weekly Roundup

Key Talking Points from the June Consumer Price Index (CPI) Release:

• Prices within transportation services and medical care services declined in June, setting up what could be a decelerating trend in consumer inflation. Investors cheered the report.
• The decline in the energy index was the largest contributor to the headline decline in CPI. After June’s decrease, the annual inflation rate decelerated to 3.5% but this will likely revert given energy prices during the first part of July.
• Core inflation decelerated to 2.59% year over year, the lowest since February and should further in Q3 and Q4 as durable goods prices improve. This report is positive for investor sentiment.
• The big risk is still geopolitical. If supply chains improve by Labor Day, we should expect inflation to decidedly improve by the end of the year.

Bottom Line: After Tuesday’s benign core inflation release, it appears less likely that the FOMC will raise rates over the next few meetings. However, we may still be at an inflection point, given the risk that the energy shock could spill over into other categories of consumer prices. A positive resolution with Iran before the end of the summer is becoming increasingly important.

The Week Ahead

The following economic data is slated for the week ahead: 

• Monday: Leading Index (Jun)
• Tuesday: ADP Weekly Employment Change (Jul 4), Philadelphia Fed Non-Manufacturing Activity (Jul)
• Wednesday: MBA Mortgage Applications (Jul 17) 
• Thursday: Initial Jobless Claims (Jul 18), Continuing Claims (Jul 11), Chicago Fed National Activity Index (Jun), Kansas City Fed Manufacturing Activity (Jul)
• Friday: S&P Global U.S. Manufacturing, Services, and Composite PMIs (Jul preliminary), New Home Sales (Jun), Kansas City Fed Services Activity (Jul), Building Permits (Jun final), Bloomberg U.S. Economic Survey (Jul)