Overnight Recap

1. Oil shock — Houthis strike Saudi tankers, Trump threatens Iran (CNBC, 05:30 ET). Brent spiked 4.6% to $98.44 and WTI topped $90 for the first time since June 10 after Iranian-aligned Houthis claimed strikes on oil tankers off the Saudi coast and President Trump warned of further military escalation. The Strait of Hormuz risk premium is now being priced in earnest. Front-month CL1 settled at $90.15, +3.8% vs. prior settle and +2.2% overnight. Energy equities (XLE) rallied 4.8% over five sessions.

2. Alphabet and Tesla slide on AI capex fears (CNBC/MarketWatch, 04:00–05:30 ET). Both stocks are down sharply in pre-market: GOOGL -4% despite a Q2 beat, after raising its 2026 capex guide to $195–$205 billion; TSLA -5% after an earnings miss, negative free cash flow, and margin compression. The spending trajectory is unnerving investors who had priced AI as a margin tailwind. ServiceNow bucked the trend, rising on cybersecurity momentum.

3. Treasury yields climb with oil, 30Y above 5% for 11th straight session (CNBC, 03:45 ET). The 10Y yield rose 1 bp to 4.675% and the 2Y ticked higher to 4.89%, following crude higher. The 30Y bond yield has now held above 5% for 11 consecutive sessions — the longest stretch since 2007 — as the market prices persistent inflation risk and a fully-priced September Fed hike.

4. ECB decision day: hold expected, hawkish signals possible (Reuters, 02:00 ET). The ECB is all but certain to hold at 2.25% (92% probability per ECB Watch), but analysts expect a hawkish lean — fresh energy price spikes are threatening the inflation outlook, and a September hike is not off the table.

5. Defense earnings boom lifts European stocks (CNBC, 02:00 ET). European defense names surged: Dassault Aviation +8%, Thales and Indra also strong. The Iran conflict is fueling a structural defense spending cycle, and European contractors are the direct beneficiaries.

6. Asian equities mixed — AI capex supports chip names, oil weighs on importers (Reuters, 05:27 ET). Asian stocks were broadly higher overnight, with the AI capex theme supporting semiconductor and tech names in Tokyo and Seoul, while oil-sensitive markets like India underperformed. Nikkei +0.3%, Kospi +0.2%, Hang Seng -0.1%.

Previous Session Context

• July 22 tape wrap (Investopedia, 18:15 ET): Major indexes closed lower Wednesday — S&P 500 -0.1%, Nasdaq -0.6% — ahead of Big Tech earnings. 10Y yields hit two-month highs as oil prices surged.
• 30Y milestone (MarketWatch, 18:13 ET): The 30-year Treasury yield notched its 11th consecutive session above 5%, the longest run since 2007.
• ECB preview (MarketWatch, 18:01 ET): Markets priced a 92% hold probability for Thursday's ECB meeting, with hawkish hints expected.
• Google capex shock (Yahoo Finance, 20:24 ET): Alphabet raised 2026 capex to $195–$205 billion, up from $175 billion prior — shares fell after-hours despite the Q2 beat.

Global Equity Movers

Asia-Pacific:

• Nikkei 225: +0.3% — chip and defense names supported by AI capex and geopolitical demand
• Kospi: +0.2% — Samsung, SK Hynix benefit from capex narrative
• Hang Seng: -0.1% — oil sensitivity and China demand concerns
• ASX 200: flat — miners offset energy gains
• Nifty 50: -0.4% — oil importer pain at $90+ crude

Europe (early trade):

• Stoxx 600: +0.2% — defense + energy rally offsetting tech cautiousness
• DAX: +0.3% — Dassault Aviation +8%, Rheinmetall higher
• FTSE 100: +0.1% — energy complex bid, Shell and BP higher

US pre-market movers:

• GOOGL: -4.0% — Q2 beat but $195–$205B capex guide spooks
• TSLA: -5.2% — earnings miss, negative FCF, margin compression
• NOW: +2.1% — cybersecurity momentum, Q2 beat
• GEV: -1.5% — beat and raised guidance but selling on geo-risk overhang
• RTX: +1.8% — raised 2026 forecasts on defense and aircraft repair demand
• SMCI: +0.8% — AI infrastructure play benefiting from capex
• APA, HAL, DVN: +2–3% — energy sector bid on $90 oil

Rates, FX, and Commodities

Rates: Treasury yields ticked higher overnight with oil — 2Y at 4.89% (+1 bp), 10Y at 4.675% (+1 bp), 30Y at 5.04% (+1 bp), extending its longest >5% stretch since 2007. The curve is bear-flattening as short-end rate expectations firm: a September Fed hike is now fully priced. TY1 futures closed at 108.3125, -0.09% overnight.

FX: DXY consolidated near 103.5 after a four-day rally. USD/JPY hovered at 163.14, near its weakest level since 1986, as the BOJ's policy credibility erodes — sources indicate the BOJ is on alert for faster rate hikes, but the market isn't buying it. EUR/USD at 1.085 ahead of the ECB decision.

Commodities: The oil move is the story. WTI (CL1) at $90.15, +3.8% vs. prior settle, +2.2% overnight. Brent at $98.44, closing in on the psychologically critical $100 level. Houthi strikes on Saudi tankers and Trump's renewed Iran threats are the proximate catalysts. Natural gas (NG1) at $2.95, +0.5% overnight. Gold (GC1) at $4,092.70, -1.4% vs. settle — the stronger dollar and rising real yields are overwhelming safe-haven bids. VIX at 17.65, +6.1%, reflecting genuine risk appetite deterioration.

Today's Setup and Risk Map

Economic Calendar (all times ET):

• 08:30 — Jobless Claims (prior: 222K, consensus: ~225K)
• 08:30 — Continuing Claims
• 08:15 — ECB Rate Decision (expected: hold at 2.25%)
• 08:45 — ECB Press Conference (Lagarde)
• 10:30 — EIA Natural Gas Storage

Earnings (BMO, ≥$20B market cap): RTX, TMUS, TMO, UNP, BX, LMT, FCX, CMCSA, HON, NSC, NDAQ, AMP, PCG, HBAN, ROP, DOV, FCNCA, DGX, WST, DOW, SNA

Earnings (AMC, notable): INTC ($645B), NEM ($103B), DLR ($68B), FIX ($65B), EW ($52B), HIG ($37B)

Key futures levels (front-month, 05:55 ET):

• ES1: 7,512.75 — support 7,480, resistance 7,550
• NQ1: 29,061.75 — support 28,900, resistance 29,300
• CL1: $90.15 — support $88.00, resistance $92.00

Bull case: ECB holds with dovish tone, jobless claims cool, oil stabilizes below $90, and the mega-cap earnings rush (RTX, TMUS, TMO, UNP) delivers beats that shift focus from AI spending to broad earnings resilience. S&P recovers the overnight loss and trades green by mid-morning.

Base case: Futures consolidate near current levels into the open. Oil stays elevated ($89–$91) capping risk appetite. ECB hold with hawkish lean keeps rate expectations firm. Mega-cap earnings are mixed — some beats from industrials/defense offset by tech overhang. Range-bound session with a defensive tilt.

Bear case: Oil breaks above $92 on fresh Middle East escalation headlines. Alphabet/Tesla selling accelerates into the open, dragging the broader tape. Jobless claims surprise to the upside. ECB signals a September hike. S&P tests 7,450, VIX pushes above 19.

Biggest risk to base case: Further Middle East escalation — a verified tanker sinking, Strait of Hormuz disruption, or direct US-Iran military engagement would send oil through $100 and trigger a broad risk-off with no obvious circuit breaker.

Earnings Calendar and Results

Today's Earnings — sourced from DoltHub + DuckDB warehouse:
Already reported (pre-open, BMO):
- RTX (Before market open, $253B) — EPS cons 7.54 (YoY +9.0%)
- TMUS (Before market open, $198B) — EPS cons 13.00 (YoY +23.5%)
- TMO (Before market open, $191B) — EPS cons 27.18 (YoY +9.4%)
- UNP (Before market open, $153B) — EPS cons 13.63 (YoY +8.0%)
- BX (Before market open, $141B) — EPS cons 7.58 (YoY +28.7%)
- LMT (Before market open, $117B) — EPS cons 32.34 (YoY +8.0%)
- FCX (Before market open, $90B) — EPS cons 3.51 (YoY +31.0%)
- CMCSA (Before market open, $83B) — EPS cons 3.68 (YoY +5.7%)
- HON (Before market open, $74B) — EPS cons 9.66 (YoY +17.8%)
- NSC (Before market open, $70B) — EPS cons 13.43 (YoY +9.7%)
- NDAQ (Before market open, $44B) — EPS cons 4.44 (YoY +13.3%)
- AMP (Before market open, $41B) — EPS cons 47.96 (YoY +9.6%)
- PCG (Before market open, $38B) — EPS cons 1.81 (YoY +9.7%)
- HBAN (Before market open, $36B) — EPS cons 1.91 (YoY +17.9%)
- ROP (Before market open, $34B) — EPS cons 23.98 (YoY +9.2%)
- DOV (Before market open, $30B) — EPS cons 11.38 (YoY +7.2%)
- FCNCA (Before market open, $24B) — EPS cons 202.02 (YoY +14.0%)
- DGX (Before market open, $23B) — EPS cons 11.56 (YoY +7.8%)
- WST (Before market open, $23B) — EPS cons 9.52 (YoY +10.7%)
- DOW (Before market open, $21B) — EPS cons 1.91 (YoY -31.3%)
- SNA (Before market open, $21B) — EPS cons 20.86 (YoY +5.9%)
Upcoming today (after close, AMC):
- INTC (After market close, $645B) — EPS cons 1.50 (YoY +40.2%)
- NEM (After market close, $103B) — EPS cons 10.27 (YoY +13.2%)
- DLR (After market close, $68B) — EPS cons 8.71 (YoY +8.1%)
- FIX (time unconfirmed, $65B) — EPS cons 52.93 (YoY +22.8%)
- EW (After market close, $52B) — EPS cons 3.36 (YoY +12.0%)
- HIG (After market close, $37B) — EPS cons 13.91 (YoY +9.2%)
- VRSN (After market close, $24B) — EPS cons 10.29 (YoY +8.9%)