Stocks Reverse From Sharp Morning Gains As Tech Weakness Counters Iran Peace Hopes: July 27, 2026

Middle East peace hopes sparked strong but short-lived stock gains this morning as Washington and Tehran refrained from attacking each other for the third consecutive night. The development has been sending crude oil and yields south as the path to a longer-term truce was widened by reduced geopolitical tensions. However, equity market excitement faltered because tech weakness spoiled the risk-on rally, causing aggressive U-turns in the Nasdaq 100 and the S&P 500 benchmarks. Semiconductors dragged the averages lower, as a new package of AI deals raised worries about the mounting expenses associated with developing the modern technology that coincided with anxiety pertaining to rising Chinese competition. The volatility comes as 4 of the Mag7 members are scheduled to report this week, and top of mind for analysts and shareholders alike are the monetization and capital return prospects of the massive outlays. The economic calendar didn’t assist either from the cost perspective, as the business investment section of durable goods indicated buoyant appetites for equipment spending. Despite the turbulence in chipmakers, 6 of the 11 major sectors are advancing and the Dow Jones Industrial and Russell 2000 indices are still in the green. Elsewhere, the lack of speculative enthusiasms has cyclical commodities retreating while hedging activity sees greater demand. Precious metals are catching bids on quelled Fed hike cut chances helped by a 9% decline in WTI.

Durable Goods Miss, But AI Spending Remains Strong

A recovery in aircraft purchases and strong capital expenditures helped produce a positive number in June’s Durable Goods statistics. The headline figure expanded just 0.3% month over month (m/m) though, missing the 2.5% median estimate by a mile but improving from May’s 4.5% decline.  The passenger plane, computer/electronic, primary metal, electrical equipment and other categories saw transactions expand 3.7%, 3.1%, 1.1%, 0.9% and 0.2% m/m. Conversely, revenues for automobile, fabricated metals and machinery segments slipped 0.6%, 0.5% and 0.1%. The business investment component signaled ongoing enthusiasm regarding the AI buildout, with the gauge leaping 0.9%, above the 0.8% projected but under 1.9% in the preceding period.

Can We Get Through ’26 Without a Hike? 

The current week of earnings is the most significant one for the summer season, as over a third of the S&P 500 gears up to report. During the next few days, investors will be keying in on the results from enormous AI capital expenditures, with shareholders looking for progress on the bottom line. Firms that achieve buoyant payouts amidst strong returns are poised to be rewarded by market participants while companies that reflect lackluster performances may be punished as Wall Street appears increasingly concentrated on separating the winners from losers in the technological race. Folks will also focus on how cyclically oriented names are doing against the backdrop of ongoing economic growth, durable consumers and subdued joblessness. Finally, we’ll hear an interest rate decision and the Warsh presser on Wednesday, and fixed-income watchers will be attuned to whether we can make it through this year without an increase in the central bank’s benchmark. Lower oil is the #1 way to achieve that goal.

International Roundup

China’s Industrial Profit Growth Slows

Growth of industrial profits in China eased slightly last month with the benefits of increased demand for AI products being partially offset by companies curtailing increases in energy prices and ongoing weakness in domestic demand. Earnings were up 15.1% year over year (y/y), moderating from the 21.1% May jump. The growth this year comes after a period of declining profits. In June 2025, for example, industrial earnings were down 3.6%, providing a low comparison for the recent y/y print. June’s deceleration resulted, in part, from businesses curtailing price increases for energy products with prices for oil easing during the short-lived US-Iran ceasefire. The m/m result, additionally, fell 0.4% for both the broader gauge and the Corporate Services Index excluding international transportation.

Japan Corporate Services Index Depicts Continued Inflation

Higher freight shipping costs resulting from the US-Iran war are contributing to sustained inflation in Japan with the country’s Corporate Services Index depicting prices climbing 3.2% y/y. The print is down slight from 3.4% in May but it points to price pressures exceeding the Bank of Japan’s 2% inflation target. When excluding international freight, however, the gauge was up only 2.8% y/y. Within the m/m publication, international transportation stickers sank 2.9% following May’s 3.5% jump. Prices for advertising services, other services and real estate services, furthermore, were down 2.1%, 0.8% and 0.6%. Conversely, prices for the finance and insurance classification and leasing and rental segment were both up 0.3%. Information and communications recorded no change. 

Hong Kong Trade Deficit Widens

Hong Kong’s good’s trade deficit widened from HK$44.2 billion in May to HK$52 billion last month, according to the Census and Statistics Department. Export growth accelerated from May’s 40.8% y/y rate to 53.4% but the value of goods purchased from foreign markets ascended by 45.4% compared to 42% in May. When including services, total exports were up 54.4%. Within Asia, the value of shipments to Singapore, Taiwan, Chinese Mainland and Vietnam climbed 83.0%, 79.9%, 59.2% and 55.9%. When looking beyond Asia, exports to the US and Mexico jumped 114.3% and 94.2%. Import growth, meanwhile, was led by Korea, Vietnam, India and Malaysia, which boosted the value of shipments to the special administrative region by 176.7%, 106.8%, 94.4% and 62.2%.

Among product types, the following categories and the extent of their growth led Hong Kong’s export expansion:

• Electrical machinery, apparatus and appliances, and electrical parts, 57.2%
• Office machines and automatic data processing machines, 93.2%
• Telecommunications and sound recording and reproducing apparatus and equipment, 69.9%

Singapore Industrial Production Weakens

Singapore’s industrial production grew 7.2% y/y in June, decelerating from 17.8% in May. June production, furthermore, sank 7.2% m/m following the 6.9% gain in May. For the y/y reading, output of chemicals, biomedical products and general manufacturing sank 11.7%, 11.4% and 6.8%. Electronics, with a 21.3% jump, posted the strongest uptick as demand for artificial intelligence products continued. Output for precision engineering and transport engineering, furthermore, was 14.9% and 4.6% higher than in the year-ago period.