Good morning! Investors made no secret how they felt about the start of Big Tech earnings.

A quick recap: Alphabet (GOOG) fell 6.9%, crossing a key mark. Tesla (TLSA) fell 14.5%, an 11-month low.

Add in a worsening Iran situation and $100 oil, and it's no wonder stocks got hammered. The bad day pulled the S&P 500 (^GSPC) down 1.2%, the Nasdaq (^IXIC) 2.2%, and the Dow (^DJI) 1.0%.

What we're watching Friday: Following its strong results Thursday evening, we expect investors to give Intel (INTC) a round of applause after the bell. 

We'll also be watching reports from American Express (AXP), NextEra Energy (NEE), and Verizon Communications (VZ), as well as economic activity readings from S&P Global.

Yahoo Finance Morning Brief is written by Ethan Wolff-Mann.

See what else is trending on Yahoo Finance.

A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 23, 2026. (REUTERS/Brendan McDermid)

Most investors feared, following Wednesday’s results, that things might get dicey on Thursday. They were right.

Instead of indicating a leveling off of AI spending or, at least, a deceleration, Alphabet and Tesla pushed more of their metaphorical chips into the center — in many cases with plans to buy more actual chips.

Never mind the fact that Google showed once again that it's a profit machine: The spending plans hit already-nervous investors primed for negativity as they grappled with new bad news about the war and inflation.

Even the news that initial jobless claims hit the lowest levels since the 1960s wasn't enough to put any pep in the market's step. The Magnificent Seven lost $767 billion in market cap.

While hyperscalers and Big Tech saw their fortunes fall, the rotation we've been seeing of late reversed back to the chip stocks: Micron Technology (MU), SK Hynix (SKHY), and Sandisk (SNDK).

After all, big spending also means someone gets paid.

"These massive companies with massive amounts of cash and lots of potential leverage are willing to spend a lot on infrastructure, more than anybody thought possible," as Mark Mahaney, senior managing director at Evercore's Internet research team, put it to our team.

We'd also note that the SaaSpocalypse got some good news: ServiceNow shrugged off some AI disruption fears.

The question investors are left with: Is this time different? Or will the market simply make peace with the spending and figure that Google knows what it's doing?

AUSTIN, TEXAS - JULY 21: Gas prices are displayed at a Valero gas station on July 21, 2026 in Austin, Texas. U.S. gas prices have risen to an average of $4 a gallon as the ongoing armed conflict between U.S. and Iran continue into its fifth month. (Brandon Bell/Getty Images)

Brent benchmark oil prices hit triple digits on Thursday (West Texas Intermediate hit $93) after rising over 7%.

As our oil expert Jake Conley put it, "everything is going wrong for oil markets right now."

This is the highest prices have been since the memo of understanding between Iran and the US was signed.

Pressure is coming from multiple fronts. Reports that Saudi tankers were attacked in the Red Sea — the new non-Hormuz front — by Houthis highlighted the potential risk in alternate routes out of the Gulf.

The only route left: the Suez, which isn't deep enough to handle the amount needed to move.

All of this comes amid a backdrop of quickly deteriorating relations with Tehran and the specter of escalation, which seems more and more likely.

Still, Jake noted that the "base case" for market strategists is some kind of diplomatic solution. 

But as Rystad Energy head of geopolitical analysis Jorge León put it, "if a ceasefire does not materialize, the risk of a significant rebound in oil prices would be substantial."

A polling place in Grand Rapids, Mich. (Joshua Lott/The Washington Post via Getty Images)

This week, we gave this quarter's earnings season outlook as a cause for hope. That's absolutely still on the table.

But so are the midterms.

Already, we're about four months away from the first Tuesday in November, and D.C. palace intrigue is simmering in the background, ready to take center stage.

While emotionally that might sound unpleasant, there's reason why it could be good for investors. LPL's Jeff Buchbinder noted that midterm years are generally bad, historically speaking. But the year after is the best-performing of the four-year presidential election cycle. Markets love when that uncertainty goes away — no matter who wins.

According to LPL's numbers, the average return in the last 18 post-election periods is 18.2%.

Of course, past performance doesn't mean anything — especially when various things feel pretty sui generis right now.

But there's yet another reason investors might be happy. Many Wall Street shops have a base case of a Republican-controlled Congress moving to a split Congress. With a likely lack of cooperation and logjam, that's even more bullish. Investors only like change when it's their portfolio going up and to the right.

(Justin Sullivan/Getty Images)

Yes, today was rough in the stock market.

But Goldman Sachs noted that for the first time since the Second World War, the stock market has been the biggest contributor to people's nest eggs.

For a country in which the American Dream is largely one bolstered by homeownership, this is kind of a big deal and certainly one that will give folks on the rent side of the rent vs. own divide a reason to celebrate.

Furthermore, the stock market's gains are one of the keys to explaining why consumer spending continues to remain strong, the bank said.

Goldman noted that the balance could easily swing back to homeownership should the stock market wobble. After all, valuations are high, and if you've gotten to this part of the newsletter, you know things are a little uncertain right now!