Wall Street closed lower for the week of July 20, 2026, with all three major benchmarks in the red: the Nasdaq Composite fell 2.9%, the S&P 500 fell 1.6%, and the Dow Jones Industrial Average fell 0.9%. The week didn't move in a straight line — Monday and Wednesday were only modestly down, before a sharper Thursday selloff dragged the week's total lower — and the two forces behind almost every session were the same: an escalating conflict involving Iran that pushed oil prices up, and second-quarter earnings season colliding with fresh worry about how much Big Tech is willing to spend on AI infrastructure.
The short version: Nasdaq -2.9%, S&P 500 -1.6%, Dow -0.9% for the week. Thursday alone: Dow -506.93 points (-1%) to 51,711.65, Nasdaq -553.21 points (-2.2%) to 25,137.69, S&P 500 -90.66 points (-1.2%) to 7,408.30. Drivers: President Trump declaring the Strait of Hormuz ceasefire over after US strikes on Iranian coastal targets, pushing oil prices higher; and Alphabet raising its 2026 capex forecast to $195-205 billion even after beating earnings estimates, reviving concern about AI-spending payback.
Iran tensions and oil set the tone all week
The week's dominant story wasn't a company at all — it was the Strait of Hormuz. President Trump declared the region's fragile ceasefire over following US military strikes on targets along the Iranian coastline, in response to what appeared to be Iranian attacks on vessels transiting the strait. Iran reportedly asked Yemen's Houthi movement to be ready to close the Red Sea oil export route if the US struck Iranian power plants and bridges, a threat that, combined with the Strait of Hormuz, covers two of the world's most important oil shipping chokepoints. Oil prices rose on the news, and equities pulled back in response, a fairly standard market reaction to geopolitical risk around energy supply. One modest counterweight: Iran's release of a detained US citizen this week was read by some investors as a small de-escalation signal, though it wasn't enough to reverse the week's losses.
Alphabet's capex raise overshadowed a strong earnings beat
Second-quarter earnings season is going well by the numbers: of the 95 S&P 500 companies that had reported by Thursday, 88% beat estimates, by a median margin of 7%, while the 12% that missed did so by an average of just 2%. Alphabet's own results fit that pattern — $9.11 in earnings per share against a $2.88 estimate, and revenue of $103.62 billion, both comfortably ahead of expectations. But Alphabet's stock still weighed on the broader market after the company raised its full-year 2026 capital expenditure forecast to $195-205 billion, up from $180-190 billion, as part of continued heavy AI infrastructure investment. Investors read the bigger number as a sign that AI spending among the largest tech companies keeps climbing with no clear ceiling in sight, reviving a worry that's shadowed the sector for much of 2026: that the payoff on all this spending is further away than the spending itself.
| Session | S&P 500 | Nasdaq | Dow |
|---|---|---|---|
| Monday, Jul 20 | 7,443.28 (-0.19%) | 25,508.07 (-0.05%) | 51,839.26 (-0.59%) |
| Wednesday, Jul 22 | 7,498.96 (-0.14%) | 25,690.90 (-0.57%) | 52,218.58 (-0.01%) |
| Thursday, Jul 23 | 7,408.30 (-1.2%) | 25,137.69 (-2.2%) | 51,711.65 (-1.0%) |
| Full week | -1.6% | -2.9% | -0.9% |
What this means if you're investing through it
- A strong earnings season doesn't guarantee a strong market week — an 88% beat rate across reporting companies still coincided with a down week, because geopolitical risk and forward spending guidance moved sentiment more than the quarter that just ended.
- Oil-price-driven selloffs tend to be event-specific — worth distinguishing from a broader shift in growth expectations, since they typically ease if the underlying geopolitical risk does.
- Rising AI capex is now a two-sided story — the same spending increase that reassures investors about future AI capability also raises near-term questions about return on that spending, and markets are increasingly pricing both sides at once.