Week 28 will be remembered as the week the Iran-US ceasefire came apart. Three commercial vessels were struck in the Strait of Hormuz on Monday July 6 and Tuesday July 7, prompting the United States and Iran to exchange their fiercest fire since the original June ceasefire. President Trump declared the diplomatic deal was over on Wednesday July 8, sending Brent crude above $80 per barrel intraday before it retraced to close the week at $76.01 as hints of back-channel talks emerged. US equities absorbed the shock better than many expected. The S&P 500 closed Friday July 10 at 7,575.39, up roughly 1.2% for the week, and the Nasdaq Composite gained about 1.7% to close at 26,281.61, both notching weekly gains on the back of a Friday rally led by Big Tech. The Dow Jones Industrial Average was the laggard, declining approximately 0.5% as energy-cost-sensitive industrials weighed on the index. Our Alibaba (BABA) and Tencent (0700.HK) positions had their best week in months, with BABA surging nearly 17% to close at $112.33 and Tencent climbing roughly 6.7% to HK$460.20. Gold and silver both caught an intraday bid on Friday but gave back gains to close lower for the session, with gold ending the week near $4,109 per ounce and silver closing just below $60 at around $59.78 per ounce. Next week, earnings season begins in earnest with JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs all reporting on Tuesday July 14, the same day June CPI and Chair Warsh's first Humphrey-Hawkins testimony hit the tape.
Week 28 Recap
The week opened with an escalation that few were positioned for. On Monday July 6 and Tuesday July 7, three commercial vessels were struck while transiting the Strait of Hormuz, the narrow chokepoint through which roughly 20% of global oil supply flows. The US and Iran then exchanged their most intense fire since the June ceasefire, with both sides targeting military infrastructure. President Trump declared on Wednesday July 8 that the diplomatic deal was over, and Brent crude briefly crossed $80 per barrel intraday before retreating to settle at $76.01 as the week closed. Shipping through the Strait of Hormuz ground to a near-standstill, and the weekend saw continued rhetoric from both sides with no clear path back to the negotiating table. Trump later confirmed that Iran had requested continued talks, but the US is demanding a public commitment from Tehran to halt attacks on shipping and keep all lanes open. The Pentagon is reportedly preparing for a prolonged engagement that could last days or weeks. Risk assets initially wobbled, then recovered as dip buyers stepped in on Thursday and Friday.
US Equities and the Iran Shock
US equities proved remarkably resilient to the geopolitical shock. The S&P 500 closed Wednesday July 8 at 7,482.71, down 0.28% on the day after Trump declared the deal was over, with the Dow dropping 576 points or 1.1% and the Nasdaq managing a 0.2% gain on the back of tech strength. The market then steadied through Thursday July 9, which also saw PepsiCo kick off the informal earnings season with a Q2 print, before rallying on Friday July 10. The S&P 500 closed Friday up 0.42% at 7,575.39, and the Nasdaq Composite closed up 0.29% at 26,281.61, with both indices notching weekly gains of approximately 1.2% and 1.7% respectively on the strength of Friday's Big Tech leadership. The Dow Jones Industrial Average declined roughly 0.5% for the week as industrials and energy-import-sensitive names absorbed the brunt of the oil-price spike. Treasury yields were choppy, with the 2-year settling around 4.21% and the 10-year around 4.56% as traders weighed the inflationary implications of higher oil against the growth drag of a prolonged conflict. The CME FedWatch probability of a September rate hike ticked back up sharply on the oil-driven inflation impulse, ending the week priced at a 63% to 67% probability of at least a 25 basis-point hike, up from the roughly 50% printed immediately after the weak June payrolls but still below the 80% level seen in mid-June. The market is no longer pricing the next move as a coin flip, and the July 14 CPI print will be the deciding data point on whether the probability pushes back toward 80% or retreats.
Gold and Silver: The Geopolitical Bid Returns
The precious metals complex had a choppy week. Gold August futures opened Monday July 6 at $4,187.50 per ounce, up 1.5% from the prior Thursday's $4,125.70 close, as the Iran escalation triggered an immediate safe-haven bid. But spot gold drifted lower through the week as the dollar firmed on the same geopolitical risk, closing Friday July 10 near $4,109 per ounce, down roughly 1.9% from the Monday open. Silver followed a similar path, surging more than 3% intraday on Friday to touch $60.65 before giving back gains to close the week just below $60 at around $59.78 per ounce. The gold-to-silver ratio held near 69. Our iShares Gold Producers UCITS ETF (IAUP.L) and iShares MSCI Global Silver and Metals Miners ETF (SLVP) traded choppily alongside the spot complex, holding the recovery off the week 26 lows but not extending it meaningfully. The macro setup for precious metals remains strongly supportive on three fronts, even though the spot price action was mixed this week. First, the Iran conflict and the effective closure of the Strait of Hormuz have reintroduced a geopolitical risk premium that was absent during the June de-escalation, and this is exactly the regime in which gold and silver tend to outperform over a multi-week horizon. Second, the PBOC has now extended its gold buying streak to 20 consecutive months, and central bank demand is tracking 800 to 850 tonnes for 2026. Third, real yields are falling as the market prices a growth drag from sustained oil elevation, which is the single most important macro input for the metals complex. The counterweight this week was a firmer dollar, which typically strengthens during acute geopolitical uncertainty and creates a headwind for dollar-denominated gold. We expect this tension to resolve in favor of higher gold prices as the dollar's safe-haven bid fades and real yields remain anchored. We hold our IAUP.L and SLVP positions.
China Internet: Alibaba and Tencent Rally
Our two largest positions had their best week in months, driven by a combination of AI optimism, a constructive China macro print, and rotation back into oversold Chinese internet names. Alibaba (BABA) closed Friday July 10 at $112.33, up $1.19 or 1.07% during the regular session from the prior close of $111.14. The week saw the stock surge as much as 12.5% in a single session on Wednesday July 8, its strongest one-day gain since September 2025. The intraday range on Friday spanned $112.01 to $115.58, and the stock has now recovered roughly 17% from the prior week's $96.14 close. The 52-week low of $91.99, set in week 26, is holding as a decisive floor. Tencent (0700.HK) closed Friday July 10 at HK$460.20, down HK$9.40 or 2.00% on the day, but up approximately 6.7% for the week from the prior Friday's HK$431.20 close. The intraday range on Friday spanned HK$458.80 to HK$473.60, and the 52-week low of HK$411.00 is also holding as support. The rally was broad across the China internet complex, with JD.com and other large-cap names participating, and it was driven less by any single catalyst than by the market re-rating the AI monetization optionality at both companies. Alibaba's cloud division continues to accelerate its AI infrastructure buildout, and Tencent's Xiaowei AI assistant is now embedded inside Weixin with access to the 1.4 billion user base. We expect Q2 earnings for both companies in August to show accelerating cloud revenue at Alibaba and the first tangible contributions from AI-integrated advertising and mini-program GMV at Tencent. Analyst consensus remains firmly Buy on both names, with average price targets clustering around $173 to $196 for BABA and HK$610 to HK$722 for Tencent, implying meaningful upside from current levels. We are holding both positions and remain confident that the August prints will validate the thesis.
The Iran-US Conflict and Strait of Hormuz
The single most important development of week 28 was the collapse of the Iran-US ceasefire framework. Three commercial vessels were struck on Monday July 6 and Tuesday July 7 while transiting the Strait of Hormuz, and the US and Iran then exchanged their fiercest fire since the original June ceasefire. President Trump declared the diplomatic deal over on Wednesday July 8, and the Pentagon is reportedly preparing for a prolonged engagement. Brent crude spiked above $80 per barrel on Wednesday before retreating to settle at $76.01 as the week closed, and shipping through the Strait has ground to a near-standstill. Trump later confirmed that Iran had requested continued talks, but the US is demanding a public commitment from Tehran to halt attacks on shipping and keep all lanes open. The weekend saw continued rhetoric from both sides, with no clear path back to the negotiating table, and reports indicate the US military is preparing for a conflict in the Strait that could last for days or weeks. The implications for markets are threefold. First, the reintroduction of a geopolitical risk premium is supportive for gold, silver, and energy, and is a headwind for transport, airlines, and energy-import-sensitive industrials. Second, a sustained elevation in oil prices complicates the inflation picture ahead of the July 14 CPI print, and could push the Fed back toward a hike bias if it persists into August. Third, the conflict creates a bid for safe-haven assets and a drag on global growth expectations, which is incrementally negative for cyclical equities but neutral to positive for the long-duration AI names in our portfolio. We do not expect a full regional war, but we do expect the Hormuz situation to remain a source of volatility through the summer.
Week 29 Outlook
Week 29 is the true kickoff of Q2 earnings season, and it is also the week that will define the next leg of the macro narrative. Tuesday July 14 is a triple-catalyst day, with June CPI at 8:30 a.m. ET, JPMorgan Chase Q2 earnings before the open, and Chair Warsh's first Humphrey-Hawkins testimony before Congress all hitting the tape on the same morning. The big banks will report across Tuesday and Wednesday, with JPMorgan, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs all scheduled for Tuesday July 14, and Morgan Stanley on Wednesday July 15. This is the first of several earnings-focused weekly outlooks we will publish through August, as the reporting season is the single most important driver of equity performance over the next six weeks. Beyond earnings, the Iran conflict will remain the dominant geopolitical risk, and any further escalation in the Strait of Hormuz will move oil, gold, and equities in either direction.
Key Events
- Monday, July 13: No major US data releases. Fed speakers remain in the open window ahead of the July 29 FOMC blackout. Expect continued Iran headlines to drive the overnight session.
- Tuesday, July 14: June CPI at 8:30 a.m. ET (consensus looks for headline to tick down from May's 4.2%; a hot print would re-introduce the hike narrative). JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs all report Q2 earnings before the open. Chair Warsh's first Humphrey-Hawkins testimony begins at 10:00 a.m. ET. This is the single most important day of the week.
- Wednesday, July 15: Morgan Stanley Q2 earnings before the open. June Producer Price Index (PPI) and the NY Empire State Manufacturing Survey at 8:30 a.m. ET. The Federal Reserve's Beige Book at 2:00 p.m. ET. Fed speakers continue.
- Thursday, July 16: Weekly initial jobless claims, June Retail Sales, and the July Philadelphia Fed Manufacturing Survey at 8:30 a.m. ET. Business Inventories and Pending Home Sales at 10:00 a.m. ET.
- Friday, July 17: June housing starts and building permits. Fed speakers enter blackout ahead of the July 29 FOMC.
Earnings Season Kickoff: What to Expect from the Banks
This is where we want to focus the bulk of our outlook attention, and we will continue this earnings-focused framing through August as the reporting season unfolds. The big six US banks report across Tuesday July 14 and Wednesday July 15, and the results will set the tone for the entire Q2 reporting season. JPMorgan Chase is the headline print, with consensus expecting EPS of approximately $5.49 to $5.62 on revenue of roughly $48.7 to $49.5 billion, representing year-over-year growth of about 10.7% on EPS and 8.5% on revenue. The estimate has been revised up roughly 3.7% over the past three months, which is a constructive signal heading into the print. The key questions for JPMorgan are threefold. First, trading revenue: fixed income and equities trading desks should benefit from the volatility spike around the Iran conflict and the June payrolls miss, and we expect FICC trading to print up mid-single-digits year-over-year. Second, net interest income: the hawkish Fed pivot has kept the long end of the curve elevated, and JPMorgan's guidance on NII for the full year will be the single most important data point for the entire bank sector. Third, credit quality: net charge-offs and provisions will be scrutinized for any sign of deterioration in commercial real estate or consumer credit, and any uptick in reserves will weigh on the group. Bank of America, Citigroup, and Wells Fargo all report on the same day, and each has its own idiosyncratic story. Bank of America is the most rate-sensitive of the four, and its NII guidance will move the stock more than any other data point. Citigroup's turnaround under CEO Jane Fraser continues, and trading revenue and cost discipline will be the focus. Wells Fargo is the cleanest expression of the US consumer and the housing market, and its net charge-off trend and mortgage banking revenue will be the tells. Goldman Sachs reports on Tuesday alongside the other four mega-banks, and Morgan Stanley reports on Wednesday. Both should benefit from a meaningful rebound in investment banking fees, with equity capital markets activity and M&A both running well ahead of 2025 levels. The setup into the bank prints is constructive. Estimates have been revised higher, loan growth has been steady, trading revenue should benefit from the volatility spike, and the yield curve remains steep enough to support NII. The risk is that credit quality deteriorates faster than expected, or that guidance is conservative given the Iran uncertainty. We expect the banks to beat consensus on EPS but to issue cautious forward commentary, which is the right setup for the sector to grind higher through the back half of July. Beyond the banks, the earnings calendar accelerates rapidly through late July, with Tesla and Microsoft on July 23 and the broader Big Tech cluster including Alphabet, Meta, Amazon, and Apple reporting across the following week. Alibaba and Tencent will report their June-quarter results in mid-to-late August, and we will preview those prints in detail as the date approaches.
Four Macro Threads to Watch
First, the Iran conflict is now the dominant risk, and it will remain so through the summer. The Strait of Hormuz is effectively at a standstill, the ceasefire is in tatters, and the Pentagon is preparing for a prolonged engagement. The market has so far absorbed the shock well, with equities notching weekly gains, but a further escalation that disrupts Gulf oil supply for a sustained period would change the calculus entirely. We are watching Brent crude as the real-time barometer, with $80 as the upside trigger and $70 as the de-escalation signal. A sustained move above $90 would force a re-rating of inflation expectations and would push the Fed back toward a hike bias, which would be a material headwind for equity multiples.
Second, the Fed reaction function has shifted back toward a hike bias. The weak June payrolls print had briefly pulled the September hike probability down to roughly 50%, but the oil spike from the Iran conflict has since pushed it back up to a 63% to 67% probability of at least a 25 basis-point move. The July 14 CPI print and Chair Warsh's Humphrey-Hawkins testimony on the same day will be the next major inputs. If June CPI comes in below May's 4.2% headline, the September hike probability will likely fall back toward 50%, which would be a tailwind for both equity multiples and precious metals. If CPI surprises to the upside on energy costs, the probability pushes back toward 80% and risk assets will struggle. Warsh's testimony will be parsed for any signal on how the committee is weighing the oil-driven inflation impulse against the cooling labor market.
Third, the China internet thesis is at an inflection point. Alibaba and Tencent both had their best week in months, the Pentagon blacklist headline risk has cleared, and the August Q2 earnings are the next major validation point. We expect Alibaba to show accelerating cloud revenue growth driven by AI infrastructure demand, and Tencent to show the first tangible contributions from AI-integrated advertising and mini-program GMV. The analyst consensus remains firmly Buy on both names, and the absolute valuation levels remain conservative. The risk is a further escalation in US-China trade friction, particularly the proposed 12.5% Section 301 forced-labor tariff, but we do not expect a full truce breakdown before November.
Fourth, the gold and silver miners setup is now asymmetric to the upside. The geopolitical risk premium from the Iran conflict, the falling real yields, the 20-month PBOC buying streak, and the discounted miner valuations against record free cash flow generation are all aligned.