Make or break week begins mixed ahead of Fed and Big Tech results

• Trump says US is talking with Iran right now, ready for ‘strong action’ if talks fail
• Oil slides, Brent below $90 as pause to US-Iran military strikes appears to hold
• Wall Street mixed on oil relief, AI doubts and earnings
• Dollar two-way after suspension of near two-week US bombings

Forex

USD closed marginally higher for a third straight day and to kick off a potentially wild week of major risk events. De-escalation in the Middle East initially saw some selling as oil sold off by more than 10% at one point. There are varying reports on the status of talks, and we know relations are severely fractious. The FOMC is a key focus this week with around a 38% chance of a rate hike. A ‘hawkish hold’ is expected at a minimum but forward guidance is likely to be limited – the new modus operandi of fresh Fed Chair Warsh. ‘Data dependency’ will probably the central central bank words of the week.

EUR marginally outperformed most of its peers with the broader tone dominating markets on Monday. That is easing crude prices and improved geopolitical tensions. But elevated gas prices are more important for the euro given their importance in the region’s energy imports, with the terms of trade hovering near March lows. Near-term support is last week’s low at 1.1363 with the cycle bottom at 1.1324.

GBP was the underperformer as cable dipped to near four-week lows. The Bank of England meeting is the big event. While rates should remain on hold, eyes will be on whether support for tighter policy broadens within the MPC. Quarterly forecasts are also released, with a coin toss chance of a September rate hike.

JPY outperformed most if its peers, but the major is consolidating just below recent highs at 163.98. Policymakers and government officials remain focused on efforts shore up confidence in the currency, signalling openness to accelerating the pace of BoJ tightening while maintaining verbal intervention. A steady BoJ meeting is likely on Friday with risks around the tone.

CHF weakened in response to reports that the SNB is expecting to keep rates at zero until the end of 2027. The sources added that the view is mainly influenced by inflation forecasts, as well as the swissie’s recent weakening against the euro and the rate differential between Switzerland and the currency bloc. USD/CHF made new 2026 highs at 0.8193.

Stocks

US stocks: The S&P 500 added 0.02% to close at 7,413, the Nasdaq closed down 0.32% at 28,039 and the Dow Jones settled higher by 0.51% at 5`2,215. Consumer Staples and Communication Services were the clear winners, with Energy the big laggard, with Utilities and Tech next worst. The equal-weight S&P 500 outperformed, highlighting positive underlying breadth. Nvidia closed sharply lower (-4.99%) on reports that the company is in talks with OpenAI to guarantee $250bln in financing for a data centre. ASML fell following reports that China has begun mass production of domestically developed DUV lithography equipment. The SOX chip index slid 2.2% and is now down over 20% from its record high on June 22, though remains more than 60% higher in 2026.

Asian Stocks: Futures are mixed. APAC stocks were generally positive with falling crude prices on the military strike pause in the Gulf boosting risk sentiment. The ASX 200 was higher on tech and miners strength, set against soft energy and defensives. The Nikkei 225 saw choppy price action amid soft oil, yields and PPI data. The Shanghai Comp and the Hang Seng rose with tech helping Hong Kong. CXMT soared over 500% on debut, making it mainland China’s most valuable company by market cap.

Gold

Gold continued to trade just above $4,000. Bugs need to beat the falling trendline from the record highs and then the 50-day SMA at $4,238. But there is strong support below around the major psychological zone st the big figure. Any Fed chat about rates will be important for the non-yielding precious metal.

Chart of the Day – Alphabet sell-off hits support zone

Last week saw Google’s parent report a revenue beat and exceptional Cloud performance. Indeed, enterprise demand for AI infrastructure and cloud compute stole the show, helping the tech giant diversify beyond its core advertising business. However, the big ‘cloud’ over the results was 2026 capex guidance of $195-$205 billion, $15 billion more than previously expected. This resulted in negative free cash flow for ​the first time in GOOG’s history, burning $5.9 billion this quarter alone.

Capex is likely to be the key watchword for Big Tech results this week too, with Meta and Microsoft reporting after the close on Wednesday, and Apple and Amazon after the bell on Thursday. The big jump in AI investment highlights just how expensive the hyperscaler race has become. GOOG fell sharply after results when the stock opened on Thursday. But it found support at the 200-day SMA at $324.31 plus a major Fib level (61.8%) of the March to May move at $324.25. The midpoint of this move sits at $340.36, while below is the minor retracement level at $301.32.