Big Tech earnings test tech's big rotation: What to watch this week - Yahoo Finance

What the report says

Yahoo Finance reported that investors are entering a busy earnings week after a market pullback driven by renewed Middle East fighting and a sharp decline in semiconductor shares. Alphabet and Tesla, both part of the Magnificent Seven group, are due to report results Wednesday, while Intel’s Thursday update is expected to offer another read on the chip sector. The S&P 500 ended the prior week down 1.5%, the Dow lost 0.9%, and the Nasdaq fell 2.9%, according to the report.

The week is seen as a test of whether the recent rotation out of chip stocks and into large technology names can hold. Yahoo cited Capital.com analyst Daniela Hathorn as saying investors will look for earnings support for high valuations and clues on whether the sell-off is a broader correction or a pause in the AI-led rally. LPL Financial’s Jeff Buchbinder said markets are shifting from rewarding AI spending plans to demanding evidence of measurable returns.

Geopolitics are also central to the outlook. Yahoo reported that renewed US-Iran fighting has raised concerns about crude flows through the Strait of Hormuz, with Brent crude recently moving back above $90 a barrel. The article cited Goldman Sachs estimates that flows through the strait had recovered earlier in July but had fallen again to roughly 3 million to 5 million barrels per day as of July 15.

The report also highlighted a firmer US dollar, with Bank of America pointing to Middle East tensions, demand for US tech stocks and a higher-for-longer interest-rate outlook. Economic data are expected to be lighter, with S&P Global index readings among the main releases.