Closing Bell: Markets Seek Safety as Middle East Tensions, Oil and 10-Year Yield Climb

President Donald Trump said he is considering renewed military operations against Iran, and Houthi rebels attacked two Saudi ships in the Red Sea, contributing to higher oil prices Thursday and risk-off sentiment across markets.  

The U.S. benchmark crude price rose more than 5% to $91.57 per barrel, a multi-week high. The U.S. 10-year Treasury yield closed at 4.703%, up 0.46 points, or 0.99%, to reach its highest level since January 2025, reflecting expectations for an interest rate hike to curb rising inflation. 

The Dow Jones Industrial Average slipped by 0.97% to 51,711.65, and the S&P 500 fell 1.2% to 7,408.30. The Nasdaq Composite tumbled more than 2.15% to 25,137.69 and the Russell 2000 fell 0.67% to 2,940.16. 

Four things to watch from Wednesday's market: 

Markets took a cue from reports about AI spending from the Magnificent 7. Center stage was Alphabet (GOOGL), which slid nearly 7% after boosting its 2026 capital spending outlook to $195 billion-$205 billion. It reported strong cloud growth. Tesla (TSLA) tumbled nearly 15% following a profit miss, higher capex plans and negative free cash flow. Investors continue to question how soaring AI infrastructure costs across Big Tech will weigh on near-term returns.  

Microsoft (MSFT) and Databricks announced an expansion of their strategic partnership into the 2030s to help businesses build AI applications based on proprietary business data while improving performance, efficiency, and scalability. Databricks will deepen its use of Azure infrastructure, and Microsoft will continue integrating Databricks' data and AI capabilities across products. Shares of MSFT were down more than 2% Thursday. 

AMD (AMD) shares slipped 2.3% as it unveiled new processors, accelerators and server designs while forecasting the AI accelerator market could reach $1.4 trillion by 2030, according to reports. CEO Lisa Su said the Helios AI platform and Venice EPYC server CPUs are in full production with strong customer demand, while AMD also announced a partnership with Cerebras to expand AI infrastructure offerings.  

Defense companies, many of them reporting results this week, found support as risk associated with the U.S.-Iran war expands. RTX (RTX) rallied 7% after raising its full-year sales and profit outlook. Lockheed Martin (LMT) jumped 10.5% after reporting earnings and revenue that handily beat analyst consensus expectations, with Missile and Fire Control revenue jumping 19%, according to reports. Among other defense names, L3Harris Technologies (LHX) stock climbed 5%, General Dynamics (GD) shares were up 2.3%, and Northrop Grumman (NOC) shares rose 1.6%. 

Economic Events and Data (ET) Friday, July 24 

08:00 AM: Building Permits 

09:45 AM: S&P Global Composite PMI Flash 

10:00 AM: New Home Sales 

11:00 AM: Kansas Fed Manufacturing Index 

Earnings Calendar Friday 

Premarket: American Express (AXP), NextEra Energy (NEE), Verizon (VZ), HCA Healthcare (HCA), Canadian National Railway (CNI), SLB (SLB), Charter Communications (CHTR), Lamb Weston (LW) 

Postmarket: n/a 

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