Market Recap 10 July
| Index | Close | Change | % Change |
|---|---|---|---|
| Dow Jones Industrial Average | 52,637 | -263 | -0.50% |
| Nasdaq Composite | 26,281 | 449 | 1.74% |
| S&P 500 | 7,575 | 92 | 1.23% |
| MSCI EAFE | 3,125.35 | 39.89 | 1.29% |
| U.S. 10-Year Treasury Yield | 4.569% | 8.4 bp | 1.87% |
| WTI Crude | $71.41/bbl | $2.72 | 3.96% |
War With Iran On, Strait of Hormuz, Closed
On Saturday, the U.S. launched a third round of strikes on Iran, following an Iranian attack on another commercial vessel in the Gulf.
In response, Iran's Revolutionary Guard declared the Strait of Hormuz closed. Again.
With the tit-for-tat escalations in the Gulf, WTI crude oil rose 3.96% to $71.41 a barrel this week. Commodity markets closed prior to Saturday's strikes and reopened Sunday evening, with WTI trading up 4.09%, or $2.92, to $74.33 heading into Monday's session.
Fed Minutes: A Coin Flip
The FOMC released its meeting minutes Wednesday. The bankers are evenly split on whether to hike or cut.
Fed Chair Warsh potentially holds the deciding vote (only 12 members vote; it's unclear if those voters are equally split), and he declined to participate in the dot plot chart. However, given his hawkish comments at the ECB Central Banking Forum two weeks ago¹, investors would be wise to assume rate hikes are in the near future.
This Week's Something to Watch: Oracle
Over the last several weeks, this blog has focused on the SpaceX (SPCX) IPO and its trading action. The stock broke $150 and closed below that level on consecutive days to end the week; the next level of support is the IPO price, $135.
This week, Oracle's (ORCL) debt downgrade to just above junk status seemed like the appropriate story to cover.
S&P Global Ratings downgraded Oracle to BBB-, its last rung above junk status, on Thursday.² The agency pointed to Oracle's AI data center buildout and the cash burn it's creating.
Oracle is really two companies sharing one balance sheet. The legacy software business, Fusion ERP and NetSuite, is high-margin and largely untouched by AI compute costs. Oracle Cloud Infrastructure (OCI), the GPU business built to undercut Amazon Web Services (AWS) on price, runs at a fraction of that margin.
The bet is enormous. Fiscal 2026 capex³ hit $55.7 billion, up 162% from last year, pushing free cash flow to negative $23.7 billion despite $32 billion of operating cash flow.⁴ Oracle's $638 billion backlog of cloud contracts is why the equity market doesn't seem to care.
The bond market is saying Oracle is burning cash too fast for a business with thin AI margins. The equity market is saying the backlog justifies it. Someone is wrong.
The Week Ahead
This week brings inflation data and the start of Q2 earnings season. The Fed and markets will watch inflation trends via the Consumer and Producer Price Indices, out Tuesday and Wednesday. The major money center banks kick off Q2 earnings Tuesday.
- Monday – None. Earnings: None.
- Tuesday – June CPI. Earnings: Wells Fargo (WFC), Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM).
- Wednesday – June PPI. Earnings: ASML (ASML), BlackRock (BLK), JB Hunt (JBHT), and United Airlines (UAL).
- Thursday – Initial jobless claims, June retail sales. Earnings: Netflix (NFLX).
- Friday – None. Earnings: None.
Closing Perspective
This was a quiet week by 2026 standards: the U.S. and Iran can't decide if they want to continue fighting, oil and the world's energy supplies are being held hostage, and the Fed can't decide if it's hiking or cutting. Next week brings inflation data and the first wave of Q2 earnings. Both will tell us more about where rates and prices are headed than anything said this week.
Footnotes
¹ Kevin Warsh comments, ECB Central Banking Forum, CNBC, July 1, 2026, https://www.cnbc.com/2026/07/01/kevin-warsh-ecb-forum-live-updates.html
² S&P Global Ratings, "Oracle Corp. Downgraded To 'BBB-/A-3' From 'BBB/A-2,'" spglobal.com.
³ Investopedia, "Capital Expenditure (CapEx)," https://www.investopedia.com/terms/c/capitalexpenditure.asp
⁴ Oracle Corporation, "Oracle Announces Record Q4 and FY 2026 Results," oracle.com, June 10, 2026.
Disclaimer: this is neither a recommendation to buy or sell any securities mentioned above. Investing involves risk and the potential loss of principal.