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July 24, 2026 - 17:29
5 minutes
(Bloomberg) — Wall Street is wrapping up a jittery week with gains in stocks and bonds as oil fell on hopes for a diplomatic solution to the Middle East conflict.Equities extended gains as Reuters reported that Pakistan is exploring a path toward resuming stalled US and Iran talks following a push initiated by China. The S&P 500 was still set for a second straight week of declines, the longest losing run since March. Treasuries also halted a selloff that had been driven by worries that elevated energy costs could fuel inflation. Brent crude dropped below $100.A week that began with spiraling violence between the US and Iran has culminated in elevated oil prices. There’s been some relief from the supply disruption, with Saudi Arabian crude still being shipped from its Red Sea coast. That’s a key workaround while Tehran tries to stop flows through the Strait of Hormuz.The conflict has raised the prospect of higher energy costs, reinforcing expectations that central banks may need to keep interest rates higher for longer. No immediate Federal Reserve moves are currently anticipated, but a summer of inflation angst is now looking likely to persist in financial markets.The risk of further escalation is elevated, and a retest of oil price highs from earlier this year cannot be ruled out should military actions intensify, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. Still, she expects energy flows through the Strait of Hormuz to recover over time.“This means that inflationary pressure should subside as the year progresses, and that an aggressive tightening cycle remains unlikely in the near term,” she said.“As we have seen multiple times in the past few years, equity markets tend to overreact to war developments, partly because war events tend to create uncertainty,” said Thomas Lee at Fundstrat Global Advisors. “But these periods of risk-off have been buying opportunities in the past, and we expect this to be the case again.”Among the reasons for optimism, Lee cited a solid earnings season. About 85% of the S&P 500 companies that have reported results so far have exceeded profit estimates, the highest proportion in five years, according to data compiled by Bloomberg Intelligence.Traders are getting ready for next week’s reports from megacaps including Microsoft Corp., Meta Platforms Inc. and Apple Inc. Wall Street has been looking for more convincing evidence that the vast sums being poured into AI are generating new growth rather than weighing on profits.On the economic front, US business activity expanded at the fastest pace in eight months as strong domestic demand for services offset cooling factory production, growing supply chain delays and rising costs. New-home sales climbed in June.Corporate Highlights:A coalition of technology companies led by Nvidia Corp. and Microsoft Corp. called on policymakers to promote the development of open-weight artificial intelligence models, positioning it as key to ensuring the US maintains technological leadership. BlackRock Inc. began marketing $12.3 billion of high-grade bonds to fund a Meta Platforms Inc. data center project, testing investor appetite amid growing concerns about excessive AI infrastructure spending. American Express Co. said second-quarter expenses surged 12% as it spent more on marketing to attract and retain premium cardholders. Verizon Communications Inc. reported mobility and broadband sales that exceeded Wall Street’s expectations in the second quarter, signaling that Chief Executive Officer Dan Schulman’s turnaround plan is starting to bear fruit. SLB, the world’s biggest oil field services provider, said it will take time for full production capacity to return to the Middle East and will require a durable resolution to the US-Iran conflict. Some of the main moves in markets:StocksThe S&P 500 rose 0.6% as of 11:28 a.m. New York time The Nasdaq 100 fell 0.2% The Dow Jones Industrial Average rose 0.7% The Stoxx Europe 600 rose 0.8% The MSCI World Index rose 0.6% CurrenciesThe Bloomberg Dollar Spot Index fell 0.2% The euro was little changed at $1.1387 The British pound rose 0.2% to $1.3343 The Japanese yen rose 0.1% to 163.69 per dollar CryptocurrenciesBitcoin fell 1.5% to $64,101.07 Ether fell 1.1% to $1,864.94 BondsThe yield on 10-year Treasuries declined four basis points to 4.65% Germany’s 10-year yield declined three basis points to 3.17% Britain’s 10-year yield declined seven basis points to 5.03% CommoditiesWest Texas Intermediate crude fell 4.7% to $87.90 a barrel Spot gold rose 0.7% to $4,076.61 an ounce ©2026 Bloomberg L.P.
