Stocks Seek Comeback Following Tech Rout Thursday; Oil Drops, but Remains High; AI Narrative May Have Blown Up

The week thus far has not been a pleasant one for those in the bull camp.

For the NASDAQ, Tuesday was the only session returned to the upside. Those gains were gradually eroded on Wednesday and completely eviscerated by the fallout Thursday, as market fears of excessive AI capex spending, shaky private credit markets, escalation in the Middle East, and rising bond yields shook investors to their cores.

Hardest hit were the hyperscalers, with Alphabet (GOOGL) leading the slide, dropping 7.13%. Alphabet was added to the Dow Industrials just a week ago. Thursday's results dragged down the 30-stock blue chip index.

Amazon, which announced nothing, but is among the tech companies with the heaviest investment in AI capex, lost 4.57% on the day. Meta Platforms (META) lost 3.36%. Microsoft (MSFT) dropped two percent. Apple (AAPL) shed one percent.

Tesla (TSLA) lost 14% on the day, investors worried about the company's own spending plans on AI, self-driving taxis, and robotics. It surely didn't help matters when the company reported a profit of 31 cents in the second quarter when analysts were expecting 51 cents. Oops.

The NASDAQ broke through prior lows, ending the session at its lowest level since May 4. It is down more than seven percent from its June 2nd high (27,093.90). Trajectory indicates that the downdraft on the NASDAQ is far from over. The last time tihe index reported three straight winning sessions was June 15.

Early Friday morning, stock futures were sailing higher on the back of some sketchy earnings by Intel (INTC) which reported late Thursday. For the quarter, Intel blew away estimates, with earnings per share of $0.38 on revenue of $16.1 billion. Wall Street was anticipating EPS of $0.21 on revenue of $14.43 billion. The stock initially boomed more than 10% in after-hours trading.

With the cash open looming, those gains have been pared down to about three percent. After all, with the share price at its closing level of 100 on Thursday, the stock was already up more than 170% year-to-date and had recently topped out at 140 per share. Beating estimates that are low hurdles doesn't actually make the company a good investment. The wins this quarter don't even outweigh the losses from the first quarter ($3.7 billion). The chart, and the move from $41 in March to $140 in June looks to be mostly the work of insiders after the government took an equity position in the company.

Whatever the futures are forecasting for Friday probably are only going to provide a shot-term bounce that may not last the morning. The issues facing the market are not about to be resolved over the course of one session, one week, or even one month. This appears to be a long unwind that the elites wish to control by keeping reality at bay via the usual rosy narrative. It doesn't appear to be working very well.

As of Thursday's close, the Dow was down 434 points on the week. The NASDAQ was off 382, and the S&P was down 49 points. The week has been far short of an outright disaster. Friday's sentiment will complete the story. For now, it's not looking very positive. At 8:45 am ET, Dow futures are up 190, but are down from earlier highs. NASDAQ futures are up a very modest 12 points, and S&P futures are showing an 11-point gain, but all of them are beginning to slide toward the red.

Friday's trading may be more about testing positions, seeing whether the Mag7 stocks can regain some lost ground via dip-buyers, though even that would be pushing on a string. The AI narrative continues to break down; the War vs. Iran continues to devolve into what appears to be another forever war, the price of oil took a small dive overnight, but U.S. gas prices continue to rise, hitting a national average of $4.09 today, according to GasBuddy.com.

The June 2nd highs for the NASDAQ and S&P are beginning to look more and more like tops. The Dow, late to the party, peaked on July 6th (53,055.91) and is down a little more than two percent, but needs a catalyst to move forward and none appears to be in the works.

There's an FOMC meeting next week (July 28-29), but the Fed isn't likely to make any move, one way or the other. Tightening at this juncture would appear to be off the table. The latest rally - from the end of March to late June, early July, was built mostly on hope that the Mideast would be sorted out and oil would flow from the Gulf unimpeded. With that seemingly off the table, there's a world of worry setting the tone.

At the Close, Thursday, July 23, 2026:
Dow: 51,711.65, -506.93 (-0.97%)
NASDAQ: 25,137.69, -553.21 (-2.15%)
S&P 500: 7,408.30, -90.66 (-1.21%)
NYSE Composite: 23,874.27, -45.44 (-0.19%)