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Last updated: July 31, 2026, 8:30 AM ET

Energy Producers Surge Amid Geopolitical Tensions

Major oil companies, including Exxon Mobil and Chevron, are seeing record earnings driven by soaring energy prices stemming from the conflict in the Middle East and the closure of the Strait of Hormuz surged 100%. Exxon Mobil’s profits doubled, while Chevron posted its highest quarterly earnings on record, with both companies benefiting from strong fuel margins expect to persist. These windfall profits are being channeled into debt reduction rather than significant buyback increases, signaling a cautious approach to the longevity of these price rallies. Meanwhile, European natural gas prices are poised for their largest monthly gain since March, with reserves lagging for winter use and continued supply disruptions from the war in the Middle East, prompting some European nations to consider tapping into lower gas reserves amidst rising costs. BP Plc has initiated a process to market its North Sea business for potential sale, a move that could end its oil production in the UK after six decades.

Consumer Goods Companies Raise Outlooks Amid Steady Sales

Several consumer goods companies have lifted their full-year profit outlooks following robust organic sales growth in the recent quarter. Church & Dwight, the maker of Arm & Hammer, now expects full-year sales to be flat to up 1%, an improvement from its previous forecast of a 0.5% to.5% decline. Similarly, Newell Brands, known for Sharpie markers and Elmer's glue, raised its full-year normalized earnings per share forecast to between 73 and 77 cents, up from 56 to 60 cents previously, boosted by higher sales and a tariff refund. Colgate-Palmolive also reported higher sales in the second quarter, navigating a challenging consumer environment. However, Maruti Suzuki India Ltd.’s profit missed analysts' estimates as increased input costs offset strong revenue growth.

Automakers Face Headwinds as Suppliers Cut Guidance

The automotive industry is experiencing a challenging period, with suppliers significantly cutting mid-term sales expectations. Schaeffler, a key supplier to automakers like BMW and Volkswagen, has slashed its 2028 guidance due to a darkening outlook for the industry. Ford Motor Co.’s stock, however, is seen as having considerable room to rally, according to Citi analysts, though some skepticism remains regarding the automakers' diversification efforts beyond traditional car manufacturing. German automakers, a significant pillar of the national economy, are struggling with tariffs, the rise of electric vehicles, and intense competition from Chinese companies.

Tech and AI Stocks Show Volatility, Driving Market Swings

The technology sector, particularly artificial intelligence-related stocks, continues to exhibit significant volatility. U.S. stock futures rose on renewed optimism in AI, while South Korea's Kospi Index experienced its largest daily gain on record, despite regulators' efforts to curb wild swings. Citadel's substantial purchase of embattled hedge fund Situational Awareness helped spark a relief rally in global AI stocks, leading to debate among traders about whether the market has overcome its turbulence. The AI trade has also come under scrutiny, with the near collapse of hedge fund Situational Awareness highlighting the risks associated with highly leveraged positions in the sector. Universal Music Group shares plunged by a quarter on fears surrounding streaming growth and the potential impact of AI-generated music, a sentiment echoed by a slight miss in subscription and streaming revenue that disappointed investors.

Treasury Yields Rise as Fed Holds Steady, Dollar Weakens

U.S. Treasury yields have risen, particularly short-dated ones, as investors digest the Federal Reserve's decision to hold rates steady and consider Chairman Kevin Warsh's communication. This has contributed to the dollar heading for its worst week in three months amid growing doubts about the Fed's ability to curb inflation. In contrast, Treasury yields edged lower, reversing earlier gains, as signs of a potential peace agreement in the Middle East emerged, with U.S. officials reporting that Hamas and other militant groups had agreed to a disarmament plan.

Global Markets Experience Increased Swings and Regional Dynamics

Markets globally have experienced heightened volatility this week, with swings becoming more severe across various asset classes from Korean stocks to U.S. bonds traders got. South Korea's Kospi Index has been particularly volatile, yielding substantial returns but presenting a wild trading experience with volatility exceeding 60%. Foreign investors have largely shunned Nigeria's equities market, despite its status as the world's best performer with a 66% rally, opting instead for fixed-income assets. The UK's Financial Conduct Authority has outlined the scope of data to be published on UK equities trading, a move intended to stimulate activity on the London Stock Exchange. The Bank of Japan maintained its interest rates but adopted a hawkish tone in its guidance, with new forecasts indicating greater confidence in economic activity and inflation. Meanwhile, strategists are examining International Monetary Fund guidelines for clues regarding Japan's next move on the yen.

Private Credit and Insurance Sectors See Intertwined Growth

The private credit market is experiencing significant entanglement with the insurance sector, as private equity firms increasingly engage with life insurance companies. Insurers have quietly become major drivers of the private credit boom, with numerous private equity firms striking deals with or acquiring insurance companies. Ares has secured its largest flagship credit fund commitments in three years, with equity commitments from investors to private credit groups up more than 40% from a year ago.

Other Notable Developments

In corporate news, Czech billionaire Michal Strnad has expanded his holdings by acquiring a stake in Pirelli. New York has sued Kalshi Inc.'s trading subsidiary, alleging it operated an illegal gambling operation within the state. BP is exploring the sale of its UK North Sea business as part of a portfolio review. Canada's Alimentation Couche-Tard is planning to acquire Poland's largest convenience retailer, Zabka, for approximately $8.7 billion. Nat West reported a 29% increase in pretax profit, exceeding analysts' forecasts, and has raised its guidance and brought forward share-buyback plans, partly driven by the acquisition of wealth manager Evelyn Partners. J Sainsbury Plc has agreed to sell its Argos general merchandise unit to Swift Partners for at least £120 million, as the UK retailer focuses on its core food business.