Ceasefire on Ice: Widespread Losses as Oil Climbs

Published as of: July 8, 2026, 9:11 a.m. ET

(Wednesday market open) The ceasefire is "over," according to President Trump, and investors adopted a defensive crouch this morning watching crude oil and Treasury yields surge. Excepting a handful of energy, staples, and defense contractor names, stocks turned red in early trading with major indexes down almost 1%. Chip stocks got punished again to extend Tuesday's losses. Crude climbed more than 4%, sparking a harsh overnight sell-off in Asian markets that are among the most vulnerable to oil shortages.

Even before the latest Middle East news, investors had sore necks watching the back-and-forth action between chips and the rest of the market that might put Wimbledon to shame. Though the week began with a brief chip recovery Monday, generally, the trend has been away from tech and toward cyclical stocks that tend to do better in a growing U.S. economy, something that's also helped small caps. Any resumption of full-scale war with Iran might threaten that part of the market, too, as cheaper oil factored into hopes for domestic strength.

Major indexes had a rough day Tuesday as chips led the path downward. However, some of Tuesday's chip market pressure might have reflected investors freeing up funds to invest in South Korean chipmaker SK Hynix. The company launched a U.S. share sale Monday to raise $28 billion, with a final listing price expected Thursday before U.S. trading begins Friday, Reuters reported. Before that, minutes from the last Federal Reserve meeting bow at 2 p.m. ET today and might provide fresh perspective on policy under new Chairman Kevin Warsh.

1. Price check on aisle five: Results from PepsiCo (PEP) early tomorrow could be a welcome refreshment for investors exhausted by tech's choppy influence on markets and the resumption of Middle East hostilities. The approach of earnings season—represented by PepsiCo and Delta Air Lines (DAL) late this week—can sometimes be a ballast for a market uncertain of direction, though this earnings season now coincides with geopolitical uncertainty that threatens to steal its thunder. The last time PepsiCo reported, it beat expectations as snack sales in North America revived thanks in part to price cuts, CNBC noted. It also reiterated its full-year forecast. PepsiCo shares rose smartly Wednesday ahead of its report, and analysts expect adjusted earnings growth of 4.1% from a year ago to $2.21 per share. This week's reports from consumer names follow news of Walmart (WMT) lowering prices for summer items from beef to potato chips. Investors might be interested to learn if other consumer firms are making similar moves, which could weigh on margins but also get customers in the door—or through the jet gate, depending on the company. Yesterday's New York Fed monthly consumer survey showed inflation expectations up again, near three-year highs.
    
2. Tech on edge ahead of earnings: Samsung Electronics' sharp descent yesterday took place thousands of miles away on the South Korean stock exchange. Still, U.S. investors can take some lessons ahead of next week's results from chip infrastructure maker ASML (ASML) and giant chip producer Taiwan Semiconductor Manufacturing (TSM). Judging from Samsung's descent despite a 19-fold annual rise in operating profit, investors might not be patient with companies in this sector that can't meet expectations either for results or guidance. Even those that do could be punished, as Broadcom (AVGO) investors learned a few weeks ago when the company failed to raise annual revenue guidance, which was already quite firm. So-called Wall Street "whisper numbers" hold significance but aren't always easy to find, and Samsung apparently missed those somewhat hazy expectations on the buy side. Investors might want to get used to these rapid-fire rotations in the market, which reinforce the benefits of diversification, said Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research (SCFR) in an interview with CNBC Tuesday. Earnings season could help determine if tech and AI can redevelop their leadership, she added.
    
3. Summer storms may be in forecast: Volatility remained relatively low early this week despite the tug-of-war between tech and the rest of the market and briefly fell below 16 for the Cboe Volatility Index (VIX). Futures trading suggests the summer calm could be over, as VIX popped almost 12% to above 18 this morning at one point before easing slightly as investors weighed chances of the ceasefire truly ending. Anything approaching 20 suggests tough treading for the S&P 500 Index. Looking ahead, VIX futures trace a higher path toward 19 by August and approach 20 by September. Today's VIX rally likely reflects the renewed conflict, but looking down the road, even an end to hostilities won't necessarily calm volatility. Investors are concerned about potential central bank rate hikes and possible choppiness this fall approaching the U.S. mid-term election. If the futures market is right, those who think volatility is cheap now may not see it much cheaper. When the market appears weak, investors often purchase more options as a form of protection, raising implied volatility.

• Chip stocks, which dove Tuesday, racked up more losses early today as investors abandoned riskier parts of the market in response to rising oil and yields. Sandisk (SNDK) fell nearly 5% and Micron (MU) lost nearly 4%. The PHLX Semiconductor Index (SOX) is now down 16% from its recent intraday high, and a majority of tech stocks are in correction, down 10% or more from recent peaks.
   
• Consumer-oriented stocks including homebuilders, airlines, and clothing and home goods stores generally backtracked early Wednesday amid concerns about rising borrowing costs and higher energy prices. The 10-year Treasury note yield hit its highest levels since late May early today.
   
• Airline stocks were among the worst performers, with both Delta and United Airlines (UAL) down more than 3%.
   
• Energy names were among the few stocks making gains early Wednesday, including around 2% for Baker Hughes (BKR) and Valero Energy (VLO). Energy led all sectors Tuesday with a 3% rise after the U.S. revoked a waiver that let Iran sell oil and petrochemicals, but before Trump's ceasefire comments. But they went into Wednesday down more than 4.5% over the last month.
   
• Dollar Tree (DLTR) gained almost 2% early after getting upgraded to neutral from sell by Goldman Sachs.
   
• Amazon (AMZN) rose slightly Tuesday as it sought to raise at least $25 billion in bonds, which pressured tech broadly, Bloomberg reported, noting a growing fatigue over a "barrage" of AI financings. Investors sold bonds issued by other hyperscalers to free up capital for Amazon's, which led to weakness that caused bond yields to widen.
   
• SpaceX (SPCX) joined the Nasdaq-100^® (NDX) on Tuesday but the impact wasn't galactic as shares plunged 6% and are now down 29% from their peak.
   
• Shares of CBOE Global Markets (CBOE) rose 6% Tuesday on strong June volume figures.
   
• Treasury yields spiked early today on the oil rally despite solid demand for Tuesday's $58 billion 3-year Treasury note auction. Later today, 10-year notes go on the block.
   
• Rising U.S. imports might be another source of pressure on Treasuries. The trade deficit expanded to $77.6 billion in May, up from a revised $54.6 billion in April, the Commerce Department said.
   
• Technically, the S&P 500 Index might find support at levels between 7,390 and 7,415, according to Briefing.com. Below that there's more support between 7,335 and 7,350.
   
• The Atlanta Fed's GDPNow indicator for the second quarter fell from above 4% earlier this year to just above 1.4% in the updated reading Tuesday. This metric is based on incoming data and could change, but its recent dip suggests data has weakened lately.

Washington wire: Congress is in recess until July 13, but there's plenty to pay attention to including Trump Accounts officially opening for contributions and a bipartisan housing bill likely to become law this week. Also, the Supreme Court recently rebuffed Trump's attempt to fire Fed Gov. Lisa Cook. Read all about it in Washington: What to Watch Now, by Michael Townsend, managing director of legislative and regulatory affairs at Schwab.

The SOX looks a bit sick. The PHLX Semiconductor Index (SOX--candlesticks) is now down 16% from the June 22 peak and below its 50-day moving average (blue line) for the first time since early April. It's being outpaced since late June by the S&P 500 Equal Weight Index (SPXEW—purple line), and its Relative Strength Index (RSI) is below 45. Typically, RSI of 50 or above indicates bullish momentum.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

July 9: June existing home sales and expected earnings from PepsiCo (PEP).
July 10: Expected earnings from Delta Air Lines (DAL).
July 13: No major data or earnings expected.
July 14: June Consumer Price Index (CPI), congressional testimony from Fed Chairman Kevin Warsh, and expected earnings from JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), Wells Fargo (WFC), and Citigroup (C).
July 15: June Producer Price Index (PPI) and core PPI, and expected earnings from ASML (ASML), Johnson & Johnson (JNJ), Morgan Stanley (MS), BlackRock (BLK), Progressive (PGR), Bank of New York Mellon (BNY), PNC Financial Services (PNC), Kinder Morgan (KMI), United Airlines (UAL), and JB Hunt Transport (JBHT).