U.S. and Iran Pause Attacks, Stocks Rally Ahead of Megacap Earnings

Barry Adams
27 Jul, 2026
New York City

U.S. indexes scaled higher as investors prepared for a busy week of earnings and rate decisions. 

The S&P 500 Index increased 0.7%, and the tech-heavy Nasdaq Composite advanced 1.4% as investors awaited quarterly results from Microsoft, Apple, Amazon, and Meta. 

Market sentiment has wavered over the last three weeks amid worries that the elevated levels of artificial intelligence infrastructure are likely to cool sooner than anticipated. 

Last week, world stocks wobbled as investors reviewed the latest batch of earnings from leading tech companies. A sharp hike in oil prices, lackluster earnings from two megacap companies, and an uncertain international trade outlook added to market anxieties. 

So far, the investments in artificial intelligence have failed to deliver monetary returns promised by the leading tech companies, and the investment horizon is constantly extended.  

Investors turned cautious after Alphabet and Tesla signaled rising costs of AI infrastructure and IBM lowered revenue and earnings growth outlook.  

Alphabet, Google's parent company, fell more than 7% after the company hiked its 2026 capital expenditure estimate by as much as $20 billion. 

Tesla estimated its AI capex to soar to $25 billion in 2026 from $8.5 billion in 2025, driven by spending for compute infrastructure, expanding the robotaxi fleet, and scaling of humanoid robots.    

The Federal Reserve is set to announce its rate decisions at the end of its two-day policy meeting on July 29. 

Investors are widely anticipating rates to remain between 3.5% and 3.75%, but some economists are still holding out for a surprise rate hike amid rising energy costs. 

The West Texas crude oil price tumbled 9% to $83.03 a barrel after the U.S. and Iran paused military strikes following nearly two weeks of fighting. 

 

U.S. Movers 

AstraZeneca PLC gained 0.6% to $169.26 after the drugmaker reported higher second-quarter revenue and reiterated its estimate for the year on the back of a solid increase in sales in its oncology drugs. 

The drug maker said revenue increased 6% to $15.4 billion, and earnings per share rose 2% to $1.61 from a year ago, respectively. 

The company reiterated its full-year revenue growth outlook of "mid-to-high single digits" and core earnings per share to advance in low double digits.