Weekly Market Performance — July 31, 2026

LPL Research provides its Weekly Market Performance for the week of July 27, 2026. Global markets ended the month of July navigating mixed corporate earnings, artificial intelligence (AI) scrutiny, and the latest Federal Reserve (Fed) decision. U.S. equities advanced on mostly well-received AI-related earnings and a likely mechanical bounce in chipmakers, while European stocks posted modest gains and Asian markets recovered from midweek volatility. Fixed income markets faced pressure as investors grappled with uncertainty surrounding the Federal Reserve's policy path, driving longer-term Treasury yields higher. Meanwhile, commodities broadly weakened, with a decline in oil prices in focus as currency markets focused on another round of yen intervention.

Stock Index Performance

S&P 500 Index Sectors

Fixed Income and Commodities

Source: LPL Research, Bloomberg 7/31/26 @ 2:56 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Stocks rose in the final week of a dizzying July, displaying some resilience as AI concerns remained top of mind amid more high-profile earnings. AI hyperscalers Amazon (AMZN), Meta Platforms (META), and Microsoft (MSFT) highlighted a busy week of corporate updates. Shares of AMZN and MSFT surged after posting strong cloud computing revenues, easing investor concerns that massive outlays on the AI buildout will not translate into returns, while META was pressured lower as weaker-than-expected cash flow forced the social technology company to defend elevated spending. Simultaneously, Wall Street chatter around the recent pullback creating cleaner positioning in momentum names and mostly complete hedge fund deleveraging fueled a bounce in chipmakers which supported weekly gains.

The rebound was an uphill battle, however, as uncertainty around the Fed’s reaction function spurred a spike in longer dated Treasury yields, fueling cross-asset volatility and sending stocks sharply lower on Wednesday. Meanwhile, geopolitics broadly remained on the backburner with oil prices ultimately trading lower despite additional U.S.-Iran strikes after a brief weekend pause, as well as fresh reports of tankers being blocked in the Strait of Hormuz.

International Equities: European stocks printed a modest gain, also capping the month of July in positive territory. Easing oil prices and volatile tech trading were in focus, although a flood of corporate updates drove headlines over the last five days. AI news flow including upbeat guidance from power equipment firm Schneider Electric helped AI- related stocks snap a six-day slide Thursday. However, automotive stocks led the STOXX 600 as most major automakers beat depressed margin expectations amid headwinds from China demand and tariffs. Broad market gains were capped to end the week as healthcare giant Novo Nordisk dropped on a failed drug study, while a slight uptick in core consumer inflation reinforced European Central Bank (ECB) rate hike expectations.

Asian equities ended moderately lower, clawing back most of the week’s decline in a Friday surge. Hong Kong’s Hang Seng led gains with a strong 3.7% advance as AI spending and competition concerns extended the recent rotation into the internet names of offshore China. Mainland benchmarks fell, with most of the week’s losses coming on Thursday after policymakers in Beijing struck a supportive tone but stopped short of unveiling fresh economic stimulus. Nonetheless, South Korea dominated focus, facing wild swings after stringing together a three-day 17% slump only to gap 18% higher Friday to end within striking distance of the weekly unchanged point. Japan was weighed down by AI jitters but ended the week on a bright note with a dovish-leaning Bank of Japan meeting.  

Fixed Income, Currency, and Commodity Markets

Fixed Income: Core bonds, as measured by the Bloomberg Aggregate Index (Agg), traded lower this week. At Wednesday’s Fed meeting, the Committee left rates unchanged at 3.50–3.75%, but the vote was 9–3 with three dissents in favor of a rate hike. The press conference was fairly hawkish, with Chair Kevin Warsh reiterating the need for lower inflation but otherwise uncommitted to a certain policy and unwilling to provide much context around forward guidance. Perhaps as a sign of the lack of forward guidance, markets had a 33% chance of a hike going into the meeting (it's usually close to 0% by the time the meeting starts). 

The market reaction after the press conference was mostly negative in the rates market with long-term rates meaningfully higher on the day, whereas short-term rates were lower, suggesting perhaps markets may be becoming less convinced that the Fed is in fact serious about inflation (maybe a policy error by NOT raising rates at this meeting?). Markets seemed increasingly uncomfortable with the Fed’s still unknown reaction function. Warsh’s stated objective has been to restore the Fed’s credibility after years of missing its 2% inflation target by eliminating forward guidance. But the lack of forward guidance coupled with an unwillingness to provide context projects a “trust me” attitude that frankly markets aren’t comfortable with.  

Ironically, the move in the long end may ultimately force the Fed’s hand. Unless the data is unambiguously soft before September, the market may demand a hike simply to re-anchor the long end and restore credibility.  

Commodities and Currencies: The broader commodity complex traded lower this week. After starting the week on a downbeat note, West Texas Intermediate (WTI) crude prices were unable to find positive territory. WTI futures turned lower as Washington and Tehran paused strikes over the weekend with negotiations reportedly back on the table, and while late week reports of Iran blocking six tankers in the Strait of Hormuz helped cap losses, crude shed roughly 5%. Nonetheless, prices remained sharply higher on the month after nearly two weeks of strikes re-kindled supply disruption concerns. Elsewhere, gold prices traded flat Friday afternoon, stuck in a roughly month-long range as inflation concerns and worries of tighter monetary policy countered each other. However, the yellow metal tracked its first monthly gain since February. In currencies, the U.S. dollar weakened while all eyes turned to the Japanese yen as Tokyo stepped in to support the currency Thursday after hovering around 40-year lows amid a relatively extended stay above the key 160 level on the USD/JPY cross-rate.

Economic Weekly Roundup

Fed Chairman Kevin Warsh and company left rates unchanged in Wednesday’s policy decision, marking the fifth consecutive meeting without a change. As expected, Chairman Warsh gave little-to-no guidance on the central bank’s path for interest rates, reiterating the Fed’s commitment to combatting inflation but stopping short of specifying how or when policymakers may act. The main takeaways for markets were uncertainty around the Fed’s reaction function and policy framework after Warsh gave little detail on how central bankers may manage inflation and employment risk and suggested that a new preferred inflation metric may be selected. Bottom line, the hold itself was expected. But three hawkish dissents, a subsequent bond market rout, and another ambiguous press conference heightened market uncertainty and didn’t alleviate rate hike worries but simply pushed them out until the next meeting.

Also on the macro calendar, second quarter gross domestic product cooled to 1.5% last quarter, missing consensus estimates of a 2.0% expansion. Economic growth slowed from the first quarter as a surge in imports (particularly semiconductors) weighed on the gross domestic product calculation. Nonetheless, the headline figure clouded broadly positive trends of robust consumer spending results and still strong AI-driven business investment. Lastly, the Personal Consumption Expenditures (PCE) report generally arrived as expected with only a slight uptick in core figures deviating from market expectations. 

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: S&P Global U.S. Manufacturing PMI (Jul final), ISM Manufacturing (Jul), Construction Spending (Jun), Omdia Total Vehicle Sales (Jul)
• Tuesday: Trade Balance (Jun), Factory Orders (Jun), JOLTS Jobs Report (Jun), Durable Goods Orders (Jun final), Capital Goods Orders and Shipments (Jun final)
• Wednesday: MBA Mortgage Applications (Jul 31), ADP Employment Change (Jul), S&P Global U.S. Services and Composite PMIs (Jul final), ISM Services Index (Jul)
• Thursday: Challenger Job Cuts (Jul), Nonfarm Productivity (2Q preliminary), Unit Labor Costs (2Q preliminary), Initial Jobless Claims (Aug 1), Continuing Claims (Jul 25), Wholesale Inventories (Jun final), Wholesale Trade Sales (Jun)
• Friday: Change in Nonfarm, Private, and Manufacturing Payrolls (Jul), Average Hourly Earnings (Jul), Average Weekly Hours (Jul), Unemployment Rate (Jul), Labor Force Participation Rate (Jul), Underemployment Rate (Jul), New York Fed One-Year Inflation Expectations (Jul), Consumer Credit (Jun)