NEW YORK – Wall Street ended mixed on July 27, as investors awaited guidance from major technology companies in a busy week for quarterly earnings, while also worrying that stubbornly high oil prices could force the Federal Reserve to raise interest rates.
Microsoft, Amazon, Meta and Apple are set to report quarterly results this week. Investors were questioning whether a multi-year rally fuelled by optimism about artificial intelligence may be losing steam.
Investors last week were spooked by quarterly results from Tesla and Alphabet that showed heavy spending on artificial intelligence. Walmart rose 2.1 per cent, Microsoft added 1.9 per cent and Johnson & Johnson rose 1 per cent, with all three helping keep the S&P 500 in positive territory. On July 27, crude fell to a one-week low as US President Donald Trump said Washington was having “good talks” with Iran and there was a chance of a peace deal, but warned US strikes would resume if the negotiations failed to deliver. Oil prices surged last week, with Brent futures surpassing US$100 (S$129) a barrel, after new strikes on shipping in the Middle East. Seven of the 11 S&P 500 sector indexes rose, led by consumer staples, up 1.58 per cent, followed by a 1.25 per cent gain in information technology. The PHLX chip index extended its recent selloff, falling 2.2 per cent. It is down 21 per cent from its record high close on June 22 and remains up 63 per cent in 2026. Chinese chipmaker CXMT Corp’s stellar debut on July 27 and a report that the country has started manufacturing homegrown DUV chipmaking tools also signalled intensifying competition for the US semiconductor industry.
“Today represents a continuation of the rotational market that we’ve seen,” said Bill Merz, head of capital markets research and portfolio construction at US Bank Asset Management Group. “Part of the market reaction may be related to that creeping suspicion that perhaps a rate hike is coming.” The S&P 500 edged up 0.02 per cent to end the session at 7,413.18 points. The Nasdaq declined 0.18 per cent to 24,932.08 points, while the Dow Jones Industrial Average rose 0.51 per cent to 52,210.08 points.
Brent crude prices slid 8 per cent to about $89 a barrel after Washington abruptly suspended a two-week campaign of air strikes against Iran on Saturday in Trump’s latest strategic U-turn in the five-month-old conflict. Oil company shares declined. Occidental Petroleum fell 4.1 per cent and Exxon Mobil closed down 1.4 per cent. The Fed’s monetary policy decision is due on Wednesday and traders are projecting a 62 per cent chance the central bank will leave rates unchanged, with a 38 per cent chance of a 25-basis-point hike, according to the CME FedWatch tool.
The Personal Consumption Expenditures Price Index for June is due a day after the central bank’s decision and will be key in shaping market expectations for interest rates later this year.
Analysts on average expect S&P 500 aggregate second-quarter earnings to jump 39 per cent from a year ago, with AI-related stocks accounting for much of that growth, according to LSEG I/B/E/S.
The S&P 500 is trading at around 20 times expected earnings, compared to a 10-year average of 20, according to LSEG data. Advancing issues outnumbered falling ones within the S&P 500 by a 1.9-to-one ratio. The S&P 500 posted 30 new highs and three new lows. Volume on US exchanges was relatively light, with 15.8 billion shares traded, compared to an average of 18.2 billion shares over the previous 20 sessions.
