.png)
Prefer to watch? Here's this weekend's video update.
The Week in Review
Three things collided Thursday and Friday to accelerate the chip selloff. First, TSMC beat Q2 earnings but raised its 2026 capex forecast from $52–56B to $60–64B — the market read this as “AI is getting more expensive, not more profitable.” Second, Chinese startup Moonshot AI unveiled a new model it claimed narrows the gap with US AI offerings — the same DeepSeek-style scare that rocked markets in early 2025. Third, the US launched a sixth consecutive night of strikes on Iran, sending WTI crude surging to $81.78. The SMH semiconductor ETF posted its worst week since April 2025, down nearly 9%. Chipmakers are now in a bear market — down 20% from their all-time high.
The silver lining: CPI for June came in at 3.5% — below expectations, with consumer prices actually falling 0.4% month-over-month. Bank earnings were strong across the board: JPM, GS, BAC all beat; BlackRock surged 7%. UnitedHealth beat and raised guidance. Netflix missed Q3 guidance and fell 9%. IBM pre-announced a Q2 miss and fell 25%. The underlying economy is strong. The AI multiple is what’s under pressure.
Weekly Market Scorecard — Week Ending July 18, 2026
| Index | July 11 Close | July 18 Close | Change | % Change |
|---|---|---|---|---|
| SPX | 7,575.00 | 7,457.69 | -117.31 | -1.55% ↓ |
| QQQ | 725.51 | ~698 | ~-27.51 | ~-3.8% ↓ |
| IWM | ~277 | ~280 | ~+3 | ~+1.1% ↑ |
VIX closed at 18.77 — up 12% on Friday alone, up from 15.75 last week. WTI oil $81.78 (+4.47% Friday). Q2 S&P 500 earnings growth tracking at +23.6% YoY per FactSet. SMH semiconductor ETF -9% on the week, now 20% below its all-time high.
SPX / SPY
SPX closed at 7,458, down ~117 points (-1.55%) from last week’s 7,575. Key support: 7,400 (critical — break here opens 7,300), 7,300 (correction floor), 7,250 (50-day MA). Resistance: 7,500, 7,575, 7,620 (ATH). VIX at 18.77 — elevated and trending higher.
Volatility (VIX)
VIX at 18.77, up from 15.75. Not yet panic (VIX >25), but each Friday for three weeks has seen a spike. The market isn’t finding a weekly footing. Alphabet’s earnings Wednesday could reset this in either direction.
QQQ
QQQ near 698, down ~3.8% on the week. Nasdaq now 6% off its June 2 ATH. Support: 690, 680. Resistance: 710, 720, 725. The AI trade is in a structural correction.
IWM
IWM near 280, up slightly while Nasdaq fell 2.9% — a genuine rotation signal. Russell 2000 at 2,962. Support: 275, 270. Resistance: 285, 295, 300.
Next Week’s Economic Calendar — July 20–24
Monday July 20 — Retail Sales (June) 🔥; NY Empire State Manufacturing; NAHB Housing Market Index.
Tuesday July 21 — Housing Starts & Building Permits; Industrial Production.
Wednesday July 22 — Fed Beige Book 🔥; Alphabet (GOOGL) and Tesla (TSLA) earnings after close 🔥🔥🔥.
Thursday July 23 — Initial Jobless Claims; Amazon (AMZN) and Meta (META) earnings after close 🔥🔥🔥.
Friday July 24 — S&P Global PMI Manufacturing & Services (Preliminary) 🔥; New Home Sales.
Key watch: Wednesday and Thursday are the week’s defining sessions. Four of the Magnificent 7 in back-to-back evenings. If Alphabet validates AI cloud revenue growth and Amazon shows AWS acceleration, the correction stabilizes and SPX has a path back to 7,575. A guide-down from any of them — especially Alphabet or Amazon — deepens the repricing and puts 7,300 in play.
30-Day Market Outlook
Overall Bias: Neutral. Mag-7 earnings this week decide whether the AI correction has a floor or a trapdoor.
Technical levels: SPX support 7,400 / 7,300 / 7,250 (50-day MA). Resistance 7,500 / 7,575 / 7,620 (ATH). VIX 18.77 — elevated. IWM holding above 280 (mild positive). QQQ support 690/680; resistance 710/720/725.
Macro narrative: Two stories fighting for control. Bull case: economy genuinely strong (CPI 3.5%, Q2 earnings +23.6% YoY, banks beating, consumer spending resilient). Bear case: AI trade in structural correction (chips -20% from ATH, Chinese AI competition real, TSM capex raising costs, Netflix miss). Resolution happens via Mag-7 earnings this week.
Primary risk: Alphabet or Amazon guide down on cloud/AI revenue — the “AVGO moment” for the hyperscaler side of the AI trade. Secondary risk: Iran war escalates, WTI breaks above $85, inflation expectations re-anchor higher just as CPI was improving.