Mixed macro data and markets correcting: inflation under pressure

Between July 15 and 17, 2026, financial markets shifted rapidly. The period began with relief over weaker-than-expected US inflation and solid corporate earnings, but ended under the combined pressure of the tech correction and the escalation between the United States and Iran. Within a few sessions, attention shifted from the possibility of a more patient Federal Reserve to the risk that rising oil prices could reignite global inflation.

US inflation: the first positive sign

The data that initially supported the market was the US Producer Price Index. In June, the PPI fell 0.3% month-on-month, versus expectations for a flat rate. The decline was driven primarily by energy products, but on an annual basis, the overall reading remained elevated at 5.5% , signaling that disinflation could not yet be considered over.

The weaker reading, coming after a slowdown in consumer prices, dampened expectations of an immediate rate hike by the Federal Reserve. The market interpreted the data as confirmation that the central bank could wait before intervening again, at least until the energy price hike was reflected in final prices.

Wall Street supported by data and earnings

The first effect was visible in stocks. The S&P 500 gained 0.38% and the Nasdaq 0.62% , supported by both the slowdown in inflation and corporate earnings. Morgan Stanley benefited from the resumption of extraordinary operations, BlackRock from the increase in the value of assets under management, and Johnson & Johnson beat expectations for revenue and profit.

The indexes' resilience, however, masked a growing fragility in the technology sector, where high valuations required near-perfect results to justify the prices reached. The market thus continued to reward earnings and growth, but left less and less room for disappointment. This element would emerge forcefully in the following sessions.

Treasuries, dollar, and gold: mixed signals

The cooling of producer prices also benefited the bond market. The yield on the 10-year Treasury note fell by about three basis points, while the 2-year note reacted even more sharply. On the currency market, the dollar index retreated to 100.52 and the euro rose to $1.1461 . By the end of the period, however, the greenback had recovered some ground, supported by the demand for security generated by geopolitical tensions.

Gold clearly demonstrated the conflict between inflation, interest rates, and geopolitical risk. Following the PPI release, the precious metal recovered its initial losses and stabilized near $4,059 an ounce . However, the situation reversed when the market began to price in the inflationary consequences of oil: in the following session, gold fell 2.1% , while silver also suffered significant sell-offs.

The concern wasn't a lack of defensive demand, but the possibility that a new energy shock would force the Fed to keep rates high for longer. Stronger bond yields and a stronger dollar are reducing the relative attractiveness of gold, which doesn't pay interest. On Friday, the metal recovered about 1% , returning to just above $4,009 , but still couldn't avoid its worst week in the last six.

Tech correction overwhelms indices

In the second half of the period, the spotlight shifted to technology. TSMC's excellent quarterly results were not enough to reassure the market: investors had already built in exceptional expectations for artificial intelligence. The semiconductor sector thus became the starting point for a global correction, fueled by doubts about the sustainability of investments and the valuations reached by AI-related companies.

On Friday, the S&P 500 lost 1.01% and the Nasdaq 1.40% . For the entire week, the technology index lost 2.9% , confirming a weakness greater than that of the broader market. The correction also spread to Europe, with the STOXX 600 falling 0.34% , and especially to Asia, where the Nikkei lost 4% .

The message was clear: high growth was no longer enough in the technology sector, because prices demanded error-free growth. The reduction in expectations for artificial intelligence thus transformed simple profit-taking into a broader correction, capable of affecting the major global indices.

Hormuz brings oil back to the center

The other decisive factor was the worsening conflict between the United States and Iran. Attacks on strategic infrastructure and new threats to shipping in the Strait of Hormuz increased the risk of a reduction in energy exports from the Gulf. The impact on trade routes and civilian facilities raised the possibility of a prolonged shock to global energy supply.

After a relatively subdued initial phase, oil reacted violently: WTI rose 4.48% to $82.49 a barrel , while Brent reached $88.10 . The rise in crude supported energy stocks, the only positive sector in the S&P 500 in the final session, but penalized assets more sensitive to rates and growth.

Copper was also impacted by the worsening economic outlook. The three-month contract on the London Metal Exchange fell 1.3% to around $13,420 per ton , despite still relatively low physical inventories. For industrial metals, rising energy prices simultaneously represent an increase in production costs and a potential dampener on global demand.

An increasingly fragile balance

The period has shown how unstable the balance between inflation, monetary policy, and geopolitics is. US data has given the Fed more room to wait and temporarily supported Treasuries. At the same time, however, oil has reminded us that a significant portion of disinflation still depends on energy.

The market is therefore facing two potentially related shocks: the revision of technology valuations and the return of imported inflation via commodities. The initial relief in prices supported stocks and bonds, but the geopolitical escalation quickly brought volatility, risk premiums, and caution back to the forefront of investors' decisions.