Closing Look - 7/22/26
Wall Street closed mixed-to-lower Wednesday as a fourth straight day...
Summary
🔴 Wall Street closed mixed-to-lower Wednesday as a fourth straight day of rising oil prices ran into a cautious mood ahead of Big Tech earnings season’s kickoff.
Energy stocks carried the tape while software and megacap tech stayed under pressure into the close.
The real action came after the bell, where Alphabet (GOOGL) beat on every headline metric but is trading down nearly 5% as investors balked at a fresh capex hike to $195-205B for 2026.
Tesla (TSLA) beat on revenue but missed on margins and is down about 3%, IBM cut its full-year growth guidance and sits roughly flat after an early pop faded, and ServiceNow (NOW) delivered the night’s cleanest beat-and-raise, up nearly 5%.
Oil’s surge to six-week highs on continued US-Iran strikes remained the dominant macro thread of the regular session.
Major Indices & Breadth
🔴 S&P 500 closed at 7,498.96, -0.14%, as energy gains only partly offset weakness in software and megacap tech.
🔴 Nasdaq Composite fell 0.57% to 25,690.90, the session’s weakest major index.
🔴 Dow Jones Industrial Average slipped 6.06 points (-0.01%) to 52,218.58, essentially flat.
🔴 Russell 2000 eased roughly 0.2-0.3% to around 2,979, giving back a small piece of its recent small-cap rally.
🟡 Breadth was mixed: Energy Select Sector SPDR (XLE) outperformed while Technology Select Sector SPDR (XLK) and Consumer Staples Select Sector SPDR (XLP) lagged.
🟢 Leaders
SMCI +22.8%
WDC +12.5%
INTC +8.6%
🔴 Laggards
RDDT -9.0%
GEV -7.0%
Earnings
🔴 GOOGL kicked off Magnificent Seven earnings after the bell with a broad beat: revenue of $119.80B topped the $116.93B estimate, EPS came in at $9.11 (not apples-to-apples with the $2.89 consensus given a large mark-up on Alphabet’s Anthropic stake included in the print). Shares were roughly flat right after the release but sank during the call to trade down nearly 5% after hours once management raised 2026 capex guidance to $195-205B, above the prior $190B ceiling and well ahead of Street estimates.
🟢 Google Cloud revenue jumped 82% year-over-year to $24.77B, ahead of the $24.56B estimate, with cloud backlog at $514B.
🟢 Advertising revenue reached $81.63B versus $81.12B expected, with YouTube ad revenue at $11.06B versus roughly $10.81B estimated.
🔴 Capex came in at $44.9B, just above the $44.8B estimate; Gemini app active users reached 950 million, up from 750 million last quarter, processing 22 billion API tokens per minute. CFO Anat Ashkenazi said 2027 capex would “significantly increase” further, the trigger for the after-hours slide.
🔴 TSLA reported Q2 revenue of $28.24B, up 26% year-over-year and well ahead of the $25.71B estimate, but adjusted EPS of $0.33 missed the $0.51 estimate; shares fell about 3% after hours as the margin miss overshadowed the revenue beat.
🟡 IBM’s official results matched the July 14 pre-announcement — EPS of $2.93 adjusted (vs. $2.97 expected) on revenue of $17.16B (vs. $17.58B expected) — but the bigger news was a cut to full-year constant-currency revenue growth guidance to 4-5%, down from over 5%. Shares traded roughly flat after hours, giving back an earlier 2% pop, as executives said the shortfall was concentrated in large mainframe capex deals rather than a broader software pullback.
🟢 NOW beat and raised: non-GAAP EPS of $0.90 (vs. $0.8625 expected) on revenue of $3.987B (vs. $3.967B expected), with subscription revenue up 24.5% YoY to $3.877B. Shares jumped about 4.6% after hours as management raised full-year subscription guidance to $15.76-15.78B, a second consecutive raise — the best after-hours reaction of the night.
🟢 AT&T (T) beat on EPS with $0.66 versus $0.59 expected, though revenue of $31.56B (+2.3%) came in just below the $31.75B estimate; operating margin improved to 23.3% from 21.1%.
🔴 GE Vernova (GEV) reported Q2 revenue of $11.1B with a $176B backlog, but shares fell more than 7% on margin concerns.
🟢 Halliburton (HAL) beat on both EPS and revenue, rising 2.5%, citing a new Iraq contract and growing international backlog.
🔴 Pegasystems (PEGA) missed with adjusted EPS of $0.35 versus $0.43 expected, citing AI-driven delays in enterprise purchasing decisions.
🟡 Additional notable earnings today: CME Group (CME), Philip Morris (PM), CSX (CSX), and Texas Instruments (TXN).
AI
🟢 Super Micro Computer (SMCI) soared after guiding fiscal Q4 gross margin to 15-17%, roughly double its prior 8.2-8.4% outlook, alongside a record $60B in new orders and a new AI data center partnership with SpaceX’s SpaceXAI venture — lifting Dell and HPE in sympathy.
🟢 Western Digital (WDC) and Intel (INTC) led broader memory/storage strength on sustained AI infrastructure demand, resumed Kioxia merger talks, and continued restrictions on Chinese memory supply.
🟡 Goldman Sachs flagged roughly $489B in AI-related debt issued so far in 2026, with Microsoft, Amazon, and Meta accounting for about 40% of it — a backdrop investors are weighing against tonight’s Mag Seven prints (see Earnings).
🟡 GOOGL’s Gemini momentum (950M active users, 22B tokens/minute) and $44.9B quarterly capex underscore the scale of AI spending now facing investor scrutiny (see Earnings).
🟢 NOW’s Now Assist AI product line continued to show accelerating adoption, with deals including three or more Now Assist products up nearly 70% year-over-year, a key driver behind tonight’s guidance raise (see Earnings).
Corporate
🔴 Reddit (RDDT) slid 9% after the Wall Street Journal reported the company is weighing cutting off Google’s access to its content for AI training as a licensing deal nears expiration.
🔴 GEV’s revenue beat wasn’t enough to offset margin worries (see Earnings).
🟡 PEGA flagged that “unprecedented changes in the AI market” are slowing enterprise software purchasing decisions (see Earnings).
Market Structure
🟡 No major index additions, removals, or structural rule changes were announced today.
Macro/Policy
🔴 Treasury yields ticked higher as oil’s surge revived inflation concerns, with traders now pricing meaningfully elevated odds of a Fed rate hike at the September meeting.
🟡 The Fed remains in its customary blackout period ahead of next week’s FOMC meeting, where policymakers are widely expected to hold rates steady.
🟢 In the UK, headline CPI cooled to 2.6% year-over-year in June from 2.8% in May, reinforcing expectations the Bank of England stays on hold near-term.
Treasury Bonds
🔴 10-year Treasury yield rose to 4.64%, up about 2 basis points and near a two-month high.
🟡 2-year yield held near 4.26%; 30-year yield sat around 5.13%.
🟡 2s10s spread stands near 38 basis points as the curve holds its steepening bias amid rising oil and rate-hike repricing (see Macro/Policy).
Geopolitics
🔴 The US carried out an 11th consecutive night of strikes on Iranian military targets; Secretary of State Marco Rubio said Iran is “not serious about talks.”
🔴 Trump warned of further strikes on Iran and threatened to respond if Iran-backed Houthi rebels disrupt Red Sea shipping.
🟡 The standoff continues to drive global energy prices and currency volatility (see Commodities, Currencies).
Foreign Markets
🟡 India’s Nifty 50 and Sensex both closed essentially flat, with FII buying offset by DII profit-taking.
🟡 European markets were mixed as investors awaited Thursday’s ECB rate decision, broadly expected to hold at 2.25%.
Currencies
🟡 US Dollar Index (DXY) slipped 0.05% to 101.12.
🔴 USD/JPY surged to 163.19, up 0.42% and marking a fresh 40-year low for the yen, with intervention risk rising as traders weigh Bank of Japan policy uncertainty under new Prime Minister Sanae Takaichi.
🟡 EUR/USD held near 1.140 ahead of Thursday’s ECB decision.
🟡 GBP/USD traded around 1.337, with sterling ticking modestly lower after softer UK inflation data (see Foreign Markets).
Commodities
🔴 WTI crude settled up about 3% at $86.83/barrel; Brent crude settled up 3.4% at $94.07, its highest level in over a month, on continued US-Iran strikes and Red Sea shipping threats (see Geopolitics).
🟢 Gold rose 1.8% to around $4,151/oz, a two-week high, on safe-haven demand.
🟢 Silver jumped 4.45% to $58.86/oz, outperforming gold amid tight physical supply.
Crypto
🟡 Bitcoin (BTC) traded in a $65,500-$66,500 range, holding near a two-week high; strength was tied more to a broader semiconductor rally and currency stress abroad (see Currencies) than crypto-specific catalysts.
🟡 Ethereum (ETH) held near $1,920, up modestly on the day.
Prediction Markets
🟡 Markets had assigned GOOGL a 96.6% probability of an earnings beat heading into tonight’s print, which resolved yes (see Earnings).
🟡 Fed-hike probability for the September meeting sits in the mid-to-high 50s percent range, up from roughly 51% a day earlier, as oil-driven inflation fears build (see Macro/Policy).
Volatility
🟡 VIX held roughly flat near 16.9-17.0, showing little fear despite the oil surge and looming Big Tech earnings.
🟡 Options markets had priced in swings up to ±7-12% tonight; actual after-hours moves landed well inside those ranges — GOOGL -5%, TSLA -3%, IBM roughly flat, and NOW +4.6%.
Tomorrow’s Calendar
INTC reports Q2 earnings after the close Thursday; consensus calls for $14.4B revenue and $0.10 EPS.
European Central Bank rate decision Thursday, widely expected to hold at 2.25%.
Weekly initial jobless claims, 8:30 AM ET.
Thursday’s open will show whether GOOGL’s cloud strength and NOW’s beat-and-raise outweigh TSLA’s margin miss and IBM’s guidance cut in shaping broader tech sentiment.
3 Scenarios
🟢 Bullish: Investors look past GOOGL’s capex sticker shock toward its underlying cloud strength, and NOW’s beat-and-raise draws buyers into beaten-down software; Iran signals de-escalation, easing oil; indices push back toward record highs.
🟡 Neutral: Tonight’s split verdict (GOOGL and TSLA down, NOW up, IBM flat) roughly nets out; oil and yields stay elevated but don’t spike further; markets grind sideways into Thursday’s ECB decision and Friday’s broader data flow.
🔴 Bearish: GOOGL’s capex hike and TSLA’s margin miss reignite AI-spending-sustainability fears across megacap tech, outweighing NOW’s strength; continued Iran escalation pushes Brent toward $100, and rate-hike odds climb further, pressuring both stocks and bonds.
Final Take
Oil, not earnings, set the tone for most of Wednesday’s session, with a fourth straight day of gains pushing Brent to its highest level in over a month on continued US-Iran hostilities.
That kept pressure on rate-sensitive tech even as energy names carried the index.
The after-hours action delivered a genuinely split verdict across four reports: GOOGL beat on every headline number but is trading down nearly 5% as investors focused on a fresh capex hike to $195-205B rather than the underlying results; TSLA’s record revenue quarter came with a margin miss that sent shares down about 3%; IBM’s headline numbers simply confirmed what it had already pre-announced, but a cut to full-year growth guidance left shares roughly flat after an early pop faded; and NOW turned in the night’s cleanest print, beating and raising to jump nearly 5%, the best reaction of the four.
Taken together, it’s a mixed signal on enterprise software: IBM’s stumble looks concentrated in mainframe capex timing rather than a broad AI-driven pullback, which is exactly the read NOW’s strong subscription growth supports.
Thursday’s open will show whether that nuance holds or whether the market lumps all four reports into a single verdict on tech spending.
Source: CNBC, Yahoo Finance, Reuters, Bloomberg, TradingEconomics, Trading Economics, Investrade.
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