Hopes for U.S.-Iran negotiations reignite, crude oil plunges over 5%; tech stocks weigh on U.S. equity rebound, chip index crashes 4%.

U.S. benchmark indices: The S&P 500 rose 3.68 points (0.05%) to close at 7,411.98, down 0.61% for the week and gapping lower on July 23. The Dow Jones Industrial Average gained 235.60 points (0.46%) to close at 51,947.25, falling 0.38% for the week. The Nasdaq Composite dropped 161.869 points (−0.64%) to close at 24,975.824, down 2.13% for the week. The Nasdaq-100 fell 326.466 points (−1.15%) to 28,128.342, down 1.62% for the week. The Russell 2000 declined 0.35% to close at 2,929.999, down 1.09% for the week. The VIX (fear index) fell 0.70% to 18.57, down 1.07% for the week. U.S. sector ETFs: Most U.S. sector ETFs closed higher. The Global Airlines ETF rose 2.66%, the Internet ETF gained 0.44%, and the Energy ETF rose 0.4%. The Technology ETF fell 1.44%, the Global Technology ETF dropped 1.69%, and the Semiconductor ETF plunged 3.27%. Year-to-date through 2026, the Semiconductor ETF’s cumulative gain narrowed to 55.83%, while the Energy ETF rose 35.19%, the Global Technology ETF and Technology ETF gained up to 26.76%, the Internet ETF fell 3.73%, and the Discretionary Consumer ETF declined 8.01%. (July 24 — U.S. Sector ETF Performance) Magnificent Seven: The Wind Financial U.S. Magnificent Seven index rose 0.27%. Tesla fell 2.08%, Meta dropped 1.80%, NVIDIA declined 0.92%, Amazon fell 0.66%, Microsoft edged up 0.03%, Alphabet (GOOGL) rose 0.65%, and Apple surged 3.53%. Chip stocks: The Philadelphia Semiconductor Index plunged 524.952 points (−4.25%) to 11,818.885, up 1.24% for the week. TSMC ADR fell 2.88%, and AMD dropped 3.29%. Chinese ADRs: The Nasdaq Golden Dragon China Index declined 0.66% to 6,104.64, down 2.80% for the week, continuing its broad-based slide. Among major Chinese ADRs, ASE Technology fell 6.8%, NIO and XPeng each dropped over 3%, Tencent rose 0.4%, and Meituan climbed 1%. Other individual stocks: Circle fell 0.34%. Eurozone blue-chip index: The Euro Stoxx 50 rebounded over 1.1% on Friday; constituent SAP rose over 9.2%. For the week, oil & gas and basic materials sectors gained at least 3%, while telecoms fell 3.1%. German equities rebounded over 1.3% on Friday; the UK index rose ~1.3% for the week; the Bloomberg Defense Index gained 3.6%. Pan-European equities: The STOXX Europe 600 rose 0.82% to 644.51, up 0.46% for the week. The Euro Stoxx 50 rose 1.14% to 6,280.94, up 0.80% for the week. National indices: Germany’s DAX 30 rose 1.36% to 25,099.00, up 1.08% for the week. France’s CAC 40 rose 0.88% to 8,372.28, up 0.40% for the week. The UK’s FTSE 100 rose 0.91% to 10,736.23, up 1.28% for the week.

JPMorgan’s trading desk—dubbed 'the most accurate over the past two years'—turns bullish.

Third, earnings expectations offer room for upward revision. Q2 2026 EPS growth stood at a robust 52%; the market currently forecasts ~29% for Q3, but this team believes that estimate may be too low—positive revenue and EPS growth is expected across all 11 S&P 500 sectors. Fourth, bond yields may stabilize. JPMorgan interest-rate strategist Jay Barry expects the 10-year U.S. Treasury yield to rise modestly from 5.18% to 5.20% over the next month, then decline to 5.05% by year-end. A reduction in yield volatility would help alleviate some of the downward pressure weighing on equities. Fifth, technical indicators continue improving. Seasonal factors have turned favorable, retail investor participation is poised to increase, and overall positioning remains relatively light—providing room for upside. Dense near-term catalysts: Watch key data windows The desk also outlined recent high-impact catalysts likely to trigger market volatility: On inflation: This week brings both the PCE price index and ISM Manufacturing data. Within the latter, the ISM Manufacturing Prices Paid subcomponent serves as an important forward-looking inflation gauge; the Services Prices Paid subcomponent carries even greater influence. Hotter-than-expected readings could trigger bearish flattening of the yield curve. CPI data will be released on October 14, followed by the Fed’s FOMC meeting on October 28. On labor markets: Improving employment data would reinforce the growth and consumption narrative—but under the current market pricing framework, the ‘good news is bad news’ dynamic may re-emerge: strong jobs data could prompt further repricing of rate-hike expectations. On AI: The launch of META’s Muse injects fresh momentum into the theme. This week’s OpenAI Developer Day and Micron Technology’s (MU) earnings report will serve as critical watchpoints. Tactical adjustments: Tech remains core long; pairing shifts to derivatives At the implementation level, the desk explicitly revised its positioning strategy: Technology remains the core long exposure—but shorting the RTY (Russell 2000) is no longer recommended as a hedge. The rationale: further declines in oil prices and yields could spark a short squeeze in RTY. Instead, the team recommends expressing exposure to this squeeze risk via derivative instruments. Within technology, structural dispersion is expected: semiconductors and Magnificent Seven constituents are likely to outperform the broader tech sector. While software has yet to achieve consensus, it is gradually gaining traction and is viewed as a non-consensus long opportunity. AI’s thematic persistence is acknowledged, and the team recommends maintaining related exposures. Beyond technology, the team believes cyclical sectors require a bull steepening of the yield curve to sustain a rally. In non-AI areas, banks stand out—benefiting from economic reopening, potential curve steepening, and improved capital markets outlook. For rate-sensitive sectors—real estate, telecom, and utilities—the team sees scope for participation in short squeezes, though they are likely to underperform the S&P 500 (excluding AI-related names) over time. The largest potential catalyst, the team notes, would be a U.S.-Iran agreement—likely triggering sharp gains in European equities and RTY. Likewise, post-pandemic recovery themes (aviation, autos, cruises, discretionary consumption, hospitality, etc.) remain compelling, with options recommended as the preferred vehicle for positioning.

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