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Last updated: July 17, 2026, 5:30 PM ET

AI Boom Fuels Bond Issuance and Chip Market Volatility

Big tech firms, including Oracle, are turning to the bond market to finance the construction of vast data centers required for artificial intelligence development turning to bonds. This trend highlights the immense capital expenditure needed to support AI infrastructure. Meanwhile, the semiconductor market experienced significant turbulence, with chip stocks tumbling into a bear market. This selloff was partly triggered by a new AI model unveiled by Chinese startup Moonshot AI, which is seen as potentially challenging U.S. dominance in the field. The market's reaction underscores investor concerns about the rapid pace of AI development and its implications for established players. Apple briefly surpassed Nvidia as the world's most valuable company, escaping the broader AI sell-off that impacted chipmakers.

Geopolitical Tensions and Energy Market Dynamics

Escalating tensions between Iran and the U.S. have significantly impacted oil markets, with hedge funds piling into bullish bets on Brent crude at the fastest pace in nearly a decade. Shipping traffic in the Persian Gulf has neared a halt, pushing oil prices to their highest level in a month. This disruption highlights the fragility of global energy supply chains and the potential for conflict to directly affect commodity prices. Despite these tensions, Treasury yields edged lower as the economy remained solid. The cost of hedging against dollar swings has also fallen to its lowest level this year, suggesting traders foresee little disruption to the dollar's reserve currency status.

Corporate Dealmaking and Market Activity

In corporate news, Telecom Italia's board is leaning toward endorsing a €10.8 billion ($12.4 takeover offer from Poste Italiane. Anglo American has selected a consortium led by former De Beers boss Gareth Penny as the preferred bidder for its diamond business. Meanwhile, BASF is seeking banks to lead the initial public offering of its €20 billion agrichemical unit. The market also saw a notable IPO filing from Blue Owl-backed Latigo Biotherapeutics, adding to a growing pipeline of biotech firms considering public offerings.

Economic Indicators and Policy Shifts

Import prices in the U.S. unexpectedly rose.3% in June. The Treasury market eked out a gain for the week as supportive inflation data prevailed, leading traders to largely abandon bets on a July Federal Reserve interest-rate hike. In the UK, Andy Burnham is set to become the new Prime Minister amidst political upheaval and economic stagnation. The EU is set to delay fines for breaking methane rules after pressure from the U.S. delays fines. In Argentina, the Neuquen province plans to pitch its first U.S. bond since 2017, capitalizing on a shale oil boom.

Retail and Consumer Sector Dynamics

The retail sector faced mixed signals. Sweetgreen Inc. shares halted a four-day skid after U.S. regulators traced a parasite outbreak to shredded iceberg lettuce. Taco Bell's growth was impacted by the outbreak, leading to a fall in visits and sales. In other news, Moneysupermarket is set to launch an investment platform, entering a crowded market.

Other Market Developments

Gold settled up 0.7% on Friday, but posted weekly losses. The Nasdaq dropped again as the chip slump deepened, with Netflix also plunging after warning of slower growth. Hedge funds are increasing bullish oil bets as fighting between Iran and the U.S. ramps up. San Antonio is tapping the bond market for almost $1 billion to fund a major airport expansion. In the U.S., drilling activity has achieved its longest stretch without a decrease in over four years.