Red sea attacks send oil back above $100 as bond yields jump and tech sell off.
This week @ 15:15 pm Friday 24th July in London.
Markets:
- FTSE 100 rose 0.98% this week to 10,704, as stronger than expected UK retail sales and a return to growth in the flash composite PMI lifted sentiment, even as rising energy costs weighed on consumer-facing and travel-related stocks.
- S&P 500 fell 0.66% this week to 7,408, as a sharp fall in mega-cap technology shares following Alphabet’s second-quarter results offset a strong start to the earnings season, with sentiment also pressured by the surge in oil prices.
- Nasdaq Composite fell 2.09% this week to 24,988, driven lower by Alphabet’s post-earnings share price decline after the company lifted its 2026 AI infrastructure spending guidance to as much as $205bn, unsettling investors already focused on the scale of AI-related capital expenditure.
- STOXX Europe 50 rose 0.48% this week to 5,411, as gains in technology and mining shares helped offset renewed pressure on sentiment from rising energy costs and hawkish signals from the European Central Bank.
Bonds:
- UK 10-year gilt yields rose 11.0bps this week to 5.06%, as the surge in oil prices amid the widening Middle East conflict reignited inflation concerns, even as resilient UK activity data added to the case for the Bank of England to hold rates at next week’s meeting.
- U.S. 10-year Treasury yields rose 12.2bps this week to 4.67%, as the spike in oil prices lifted inflation expectations, pushing yields to some of their highest levels in over a year ahead of next week’s Federal Reserve decision.
Commodities:
- Brent crude rose 10.94% this week to $97.74/bbl, after breaching $100 a barrel for the first time since May as Houthi attacks on tankers in the Red Sea opened a new front in the Middle East conflict, before easing back later in the week.
- Gold rose 1.08% this week to $4,062.10/oz, as safe-haven demand tied to the escalating Middle East conflict offset pressure from a firmer US dollar and rising Treasury yields.
- Copper rose 1.11% this week to $6.33/lb, supported by tightening Chinese supply conditions, including a crackdown on scrap-related VAT fraud and declining exchange inventories.
FX:
- GBP/USD fell 1.01% this week to 1.3319, as the US dollar strengthened on safe-haven demand amid the escalating Middle East conflict and rising US Treasury yields.
- GBP/EUR fell 0.56% this week to 1.1695, as hawkish signals from the European Central Bank supported the euro against sterling.
Macro
- UK flash composite PMI rose to 52.1 in July (from 49.3), comfortably beating expectations, with services returning to expansion at 51.8 and manufacturing at a near two-year high of 52.8; June retail sales also rose unexpectedly.
- Eurozone composite PMI returned to expansion for the first time in four months; the European Central Bank held interest rates unchanged, though markets interpreted President Lagarde’s comments as leaving the door open to a possible hike in September.
- US Q2 earnings season moved into its busiest week, with the Federal Reserve’s next rate decision due on 29 July and the Bank of England’s on 30 July.
- The Middle East conflict widened after Houthi attacks on tankers in the Red Sea opened a second front alongside the ongoing closure of the Strait of Hormuz, briefly pushing Brent crude above $100/bbl for the first time since May before prices eased on Friday; Iran reportedly rejected a US-backed ceasefire proposal put forward by Iraq.
Company news:
- Alphabet reported second-quarter revenue up 24% year-on-year to $119.8bn and Google Cloud growth of 82%, but shares fell sharply after the company raised its 2026 capital expenditure guidance to $195bn-$205bn on the back of AI infrastructure demand.
- Danaher reported second-quarter adjusted EPS up 8% to $1.94 and revenue up 5.5% to $6.3bn, both ahead of estimates, and raised full-year guidance, though shares fell sharply as investors focused on bioprocessing timing issues and margin pressure.
- Union Pacific reported record second-quarter revenue and adjusted EPS, both ahead of estimates, raised full-year EPS guidance, and reached a settlement with Canadian National related to its proposed merger with Norfolk Southern.
- Newmont beat second-quarter profit estimates as higher realised gold prices offset lower production, generating record quarterly free cash flow of $2.2bn; the company reaffirmed full-year production and cost guidance.
What we will be keeping an eye on next week…
w/c 27th July 2026
- Federal Reserve interest rate decision, Wednesday 29 July: no change in the target range is widely expected, with focus on the tone of the statement given the recent oil-driven rise in inflation expectations.
- Bank of England interest rate decision, Thursday 30 July: accompanied by a new Monetary Policy Report; markets will watch closely for the MPC’s response to elevated energy prices and the recent hawkish shift in the vote split.
- Continued Q2 earnings from major US and European companies, alongside further developments in the Middle East conflict and their impact on oil supply.
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
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