Today’s Market Recap: Oil Breaks $100, Fueling Inflation Fears, as AI Capex Faces Scrutiny and Tesla’s 14% Plunge Drags Down Tech Sector

The U.S. House of Representatives passed a resolution explicitly calling for restrictions on Trump’s military actions against Iran, sending a political signal urging him to “hit the brakes.” The resolution passed by a narrow margin of just six votes in the Republican-controlled House, with four Republican lawmakers defecting to support the Democrats—a sign that concerns over the president’s military authority are growing even within the party.

Geopolitical tensions have entered a dangerous new phase, with Brent crude oil prices already hitting the $100 mark. RBC has warned that oil prices could break through the all-time high of $146 set in 2008. The Houthi rebels’ entry into the conflict has put simultaneous pressure on the Strait of Hormuz and the Strait of Mandeb—two major energy transport corridors—causing the risk of supply disruptions to rise sharply. RBC assesses that if the conflict escalates fully, oil prices are likely to surpass the December 2022 high of $128 and, in an extreme scenario, could even challenge the all-time record of $146; Goldman Sachs also forecasts that if shipping disruptions persist, oil prices could rise above $120 in the fourth quarter.

AMD is rolling out a flurry of new products, betting heavily on the AI computing market—projected to reach $2 trillion by 2030—and striving to consolidate its competitive edge through performance advantages. Its Helios platform is scheduled for delivery by the end of Q3 and has secured a commitment from OpenAI for “large-scale” deployment; CEO Lisa Su revealed that customer demand is “extremely strong”; The new-generation EPYC Venice CPUs deliver performance up to 3.4 times that of Intel’s Xeon products and are approximately 20% faster than NVIDIA’s Vera CPUs. AMD forecasts that by 2030, the AI accelerator market will reach $1.4 trillion, while the data center CPU market will reach $220 billion.

Oracle’s stock price fell below its 52-week low as the market lost confidence in the growth narrative of its cloud infrastructure (OCI), and concerns over the return on AI capital expenditures continued to weigh on the stock. On July 23, Oracle closed down more than 4% at $120, marking a year-to-date decline of over 37% and hitting a new low; all investors who bought the stock within the past year are now facing paper losses. Investors’ growing concerns about the AI investment-to-return cycle, coupled with a broader weakness in the tech sector, have subjected Oracle’s valuation to even stricter scrutiny.

AI demand is driving Intel to post its strongest growth in 15 years. Q2 revenue surged 25% year-over-year, far exceeding expectations, and the company maintained its guidance for high growth; its stock price rose more than 10% at one point in after-hours trading. Q2 revenue exceeded market expectations by nearly 12%; revenue from the data center and AI business surged 59% year-over-year—a growth rate nearly four times that of Q1—while the foundry business grew 31%, nearly doubling its growth rate. Q3 revenue guidance projects a year-over-year increase of 15% to 23%, exceeding the lower end of market expectations by nearly 5% and the upper end by more than 10%. The CEO stated that AI is driving “unprecedented” demand for computing power. Meanwhile, the company expects supply shortages to persist, and next year’s capital expenditures will be significantly higher than this year’s.

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