New York, July 14, 2026 – A sharp rally in oil prices has rattled technology stocks, with Brent crude jumping approximately 13% over two sessions. The surge has heightened worries that rising energy costs could squeeze profit margins for AI-linked companies, just as the probability of a Federal Reserve rate hike climbs. S&P 500 futures edged up 0.1% ahead of Tuesday’s U.S. session, but traders now price in a 43.3% chance of a 25-basis-point rate increase at the July 28-29 meeting, up from 34.2% on Friday.
“The prospect of tighter monetary policy into a potential energy shock is rarely supportive for risk assets,” said Chris Weston, head of research at Pepperstone. The market’s focus is also on June CPI data due at 8:30 a.m. EDT, with economists polled by Reuters expecting headline inflation to ease to 3.8% from May’s 4.2%, and core CPI to dip to 2.8% from 2.9%. However, KPMG chief economist Diane Swonk noted that “people are still struggling to catch up,” suggesting limited relief for consumers.
Monday’s trading revealed a sharp cross-asset divide. The S&P 500 slipped 0.79% to 7,515.34, while the Nasdaq Composite fell 1.55% to 25,873.18. The Dow Jones Industrial Average was relatively resilient, down just 0.26% to 52,498.64, helped by gains in energy stocks. The Philadelphia Semiconductor Index tumbled 4.78% to 12,347.78, underperforming the broader market by a wide margin. Brent crude jumped 9.6% on Monday alone, closing at $83.30 a barrel.
Tech names faced broad selling, but it was not a full-fledged flight to cash. On the Nasdaq, declining stocks outpaced advancers by a two-to-one ratio. Total U.S. exchange volume reached 15.91 billion shares, about 27% below the 20-day average. Energy was the top-performing S&P 500 sector, while technology lagged the most. “Now there’s less cushion and there continues to be a lot of unknowns,” said Thomas Martin, senior portfolio manager at GLOBALT.
Losses hit every major segment of the AI hardware supply chain. Micron Technology (NASDAQ: MU) fell 4.3%, Taiwan Semiconductor Manufacturing (NYSE: TSM) dropped 2.9%, and Marvell Technology (NASDAQ: MRVL) sank 7.8%. The declines were broad-based, affecting memory chips, contract manufacturing, and data-center networking. Despite the recent pullback, the Philadelphia Semiconductor Index remains up 83% year-to-date, though it has fallen more than 11% from its June peak. Semiconductor funds saw approximately $11 billion in outflows during the week ended June 24, the largest weekly withdrawal in over two decades. “We’ve never seen this kind of extreme earnings growth,” said Steve Sosnick, chief market analyst at Interactive Brokers (NASDAQ: IBKR), questioning how long it can persist.
Investors are closely watching oil and interest rates move in tandem. Brent crude was at $86.04 early Tuesday, up 3.3%, bringing the two-day gain to nearly 13%. The July Fed-hike probability jumped 9.1 percentage points to 43.3%. June CPI is forecast to show headline inflation at 3.8% year-over-year, down from 4.2%, while core CPI is expected at 2.8% versus 2.9%. Timing is critical: June CPI captures the recent drop in gas prices, but those prices have begun to climb again after renewed geopolitical tensions.
Bank earnings are also in the spotlight. JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), and Goldman Sachs (NYSE: GS) all report before the bell. FactSet (NYSE: FDS) expects S&P 500 second-quarter earnings to rise 23.6% year-over-year, marking the second consecutive quarter of growth above 20%. Investors will watch for shifts in consumer credit, trading volumes, and debt markets tied to AI spending.
The outlook remains binary. Softer core CPI and a faster recovery in tanker traffic could reduce rate-hike expectations and lift beaten-down chip stocks. However, if disruptions persist, high fuel and shipping costs may force companies to protect margins against those 20%-plus profit estimates, pressuring household spending. U.S. officials said the maritime blockade on Iran will begin enforcement Tuesday, keeping Asian refined-fuel markets tight despite a sharp drop in China’s crude imports. CPI data is first, followed by bank executives’ commentary.
