Next week: Alphabet, Tesla and Intel earnings will test AI trading

TLDR

• Alphabet and Tesla reported second-quarter earnings on Wednesday, July 22
• The decline in global chip stocks has erased more than $3 trillion in market value since June 22
• The collapse of the ceasefire between the United States and Iran pushed Brent crude above $87.50 per barrel.
• Bank of America expects the US dollar to continue to rise during the second half of 2026
• Investors want proof that AI spending delivers real returns, not just promises

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Big Tech earnings season kicks off this week with Alphabet and Tesla announcing Wednesday. These results come after a tough week for markets, with the Nasdaq falling 2.9% and the S&P 500 falling 1.6%.

Alphabet has had a strong performance over the past year, with its shares nearly doubling. The company recently sold shares to fund the construction of an artificial intelligence data center. Investors are watching closely to see if this spending pays off.

#Profits For the week beginning July 20, 2026https://t.co/hLn2sKQhEY$TSLA $INTC $Google $now $ Norwegian Krone $AMC $IBM $ Jeff $TXN $hal $T $mxl $ ficker $KMI $CLF $TCBI $VZ $CCK $CHTR $DPZ $al $ earn $HBAN $fx $ALK $ALLY $DHI $stm $NEE $PM $bx $BOKF Deck $ $EWBC $LMT Human rights dollar $CX $NLY $STLD $Tesco $WRB… pic.twitter.com/Q3alZarUTr

— Earnings Whispers (@eWhispers) July 17, 2026

But there are some concerns. Reports suggest that the launch of the Gemini 3.5 Pro model may be delayed. This weighed on Alphabet shares late last week.

Spending on artificial intelligence under the microscope

The biggest question when it comes to profits is whether investment in AI translates into real profits. Jeff Bookbinder, chief equity strategist at LPL Financial, put it plainly: “The market is moving from pricing by promise to pricing by execution.”

Data center spending from the top five hyperscalers — MicrosoftAlphabet, Amazon, Meta, and Oracle – expected to reach $644 billion in 2026, up 79% year-over-year. Investors want to see returns on that number.

Semiconductor sales grew 79% year-over-year in the first quarter of 2026. BNP Paribas expects that number to jump to 132% growth in the second quarter. However, chipmakers’ stocks have been hit hard, with the PHLX Semiconductor Index losing more than $3 trillion in market value since late June.

Tesla also reports Wednesday. CEO Elon Musk has made clear that he wants to push the company beyond cars and into robotics and artificial intelligence. Tesla is tripling its capital spending to support those plans.

Intel’s reports on Thursday will be closely watched as a check on broader chip trading. Strong results last quarter sent its shares higher, and recent deals with Google and the Terafab project kept investors interested.

Oil prices rise as tensions escalate in the Middle East

The markets received another shock last week from the Middle East. The initial agreement between the United States and Iran that eased tensions collapsed, and fighting resumed between American and Iranian forces.

🇺🇸 Now: US forces strike Iran for the eighth night in a row after two soldiers were killed and another remained missing in Jordan. pic.twitter.com/GLXgB4koN9

— Currency Bureau (@coinbureau) July 19, 2026

Oil flows Oil production through the Strait of Hormuz recovered to about 10 million barrels per day in early July. By July 15, this number had fallen to between 3 and 5 million barrels per day. Goldman Sachs says the market is now suffering from a shortage of 13.4 million barrels per day from the Gulf region.

Brent crude rose about 15% last week, exceeding $87.50 per barrel. West Texas Intermediate crude rose by about 14%.

Dollar strength

US dollar It rose about 2.5% against a basket of major currencies this year. Bank of America expects more gains in the future, citing tensions in the Middle East, foreign demand for US technology stocks, and expectations of higher rates in the long term.

Bank of America expects three federal interest rate increases of 25 basis points each in 2026. Markets are pricing in only one. If Bank of America is right, this divergence could provide further support to the dollar.