The U.S. and Iran both paused strikes over the weekend, sending Brent crude down more than 7% to about $92. Bitcoin climbed above $65,000. Meta, Microsoft, Apple, and Amazon report over the next 48 hours as the Fed meets Tuesday and Wednesday.
Monday begins with relief.
The bigger test starts now.
U.S. futures moved higher after the U.S. and Iran avoided new strikes over the weekend.
S&P 500 futures gained 0.7%. Nasdaq 100 futures rose 1.2%. Dow futures added 0.6%.
Last week ended on a weak note.
The Nasdaq posted its second straight weekly loss after Alphabet (GOOGL) dropped 7% and Tesla (TSLA) fell 14%. Both companies reported strong revenue but raised concerns about rising AI spending and weaker free cash flow.
Asia stabilized.
Japan's Nikkei slipped 0.12%, while the Topix gained 0.87%. South Korea's Kospi rose 0.44% and the Kosdaq climbed 1.71%. Australia's ASX 200 gained 1.17%, and Hong Kong's Hang Seng added 0.81%.
The focus now shifts.
Meta reports Tuesday.
Microsoft (MSFT) and Arm Holdings (ARM) report Wednesday.
Apple (AAPL) and Amazon (AMZN) report Thursday.
The Fed also announces its rate decision Wednesday.
The Signal
The Iran pause lifted markets. Earnings now decide whether the rally lasts.
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Oil gave back last week's surge.
Washington also paused its bombing campaign after 13 straight nights of strikes.
Last week Brent briefly traded above $102. WTI fell back near $84.
The market should not confuse a pause with a deal. Analysts still expect the Strait of Hormuz to remain effectively closed well into 2027.
Oman held talks with Iran over the weekend while U.S. naval forces continued diverting commercial ships away from the blockade.
Energy Signal
Oil fell because fighting paused. The supply problem remains.
The Fed meets this week.
Markets now expect about a 65% chance of no change at the July meeting.
September still looks different.
Markets continue to price roughly an 80% chance of a rate hike by then.
June inflation improved. Headline CPI slowed to 3.5% from 4.2%. Core CPI held at 2.6%. Lower oil prices reduce some pressure for this week's meeting.
New Section 301 tariffs remain another inflation risk.
The 10% to 12.5% duties took effect Friday on most major trading partners, although energy products remain exempt.
Fed Chair Kevin Warsh is expected to hold rates steady.
Investors will focus on what he says about inflation, tariffs, and September.
Macro Signal
July looks like a hold. September remains the real debate.
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This week belongs to the hyperscalers.
Alphabet already showed investors what they expect.
Revenue alone is no longer enough.
About 82% of S&P 500 companies have beaten earnings estimates so far.
The companies that disappointed investors were the ones with rising AI spending and weaker free cash flow.
Microsoft faces one of the biggest tests.
Wall Street expects Azure cloud growth near 39% to 40%. Anything below that could disappoint investors.
Meta will need to prove AI spending is improving advertising returns.
Amazon's AWS business is expected to generate about $40.5 billion in cloud revenue.
Apple must show how Apple Intelligence is helping services growth.
Investors will also be watching guidance more than headline results. Wall Street already expects spending to stay high. The real question is whether management teams can point to faster cloud growth, stronger AI products, or improving margins over the next few quarters. The companies that connect spending to revenue will likely set the tone for the rest of earnings season.
Capital Signal
The AI spending debate moves from forecasts to proof this week.
Bitcoin is holding above $65,000.
BTC traded near $65,170 as risk appetite returned with lower oil prices. Institutional demand continues improving.
U.S. spot Bitcoin ETFs now hold about $80.9 billion in assets, up from $74.4 billion at the start of July. The recent five-session buying streak added about $727 million.
Ethereum is leading Monday's move. ETH gained about 3.5% as Ethereum ETF inflows reached $337.7 million this month.
Investors continue watching the Clarity Act.
The bill must move before the August 7 Senate recess.
Prediction markets now place the chances of passage this year near 35%.
Strategy (MSTR) still holds 843,775 Bitcoin and has increased its cash reserve to about $3.225 billion after recent stock sales.
ETF demand has become the biggest source of support while Congress debates crypto regulation. If the Clarity Act advances before the August recess, investors expect institutional participation to expand further. If it stalls, attention will quickly shift back to Fed policy, Treasury yields, and whether macro conditions continue supporting digital assets.
The Verdict
Bitcoin is supported by stronger ETF demand. Ethereum is betting regulation improves before Congress votes.
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This week opens with relief.
It quickly becomes a test.
Oil has fallen.
The Fed meets Wednesday.
Four of the world's biggest technology companies report within two days.
Alphabet showed investors will no longer reward higher AI spending without clear returns.
Meta, Microsoft, Apple, and Amazon now report under that same standard.
Bitcoin enters the week above $65,000 with stronger institutional demand.
The next move across stocks, bonds, and crypto depends on the same question.
Can AI spending finally produce enough returns to justify the bill?
