Market Update: Defense stocks buck the selloff as oil tops $100 and Wall Street braces for a hotter Fed, July 24, 2026

Defense names were the outlier in a risk,off tape

The main story from Thursday's session wasn't just another tech,led slide. It was the sharp rotation into defense and industrial stocks as geopolitical risk intensified. The Reuters,reported selloff left the Dow Jones Industrial Average down 506.93 points, or 0.97%, at 51,711.65, the S&P 500 lower by 90.66 points, or 1.21%, at 7,408.30, and the Nasdaq Composite off 553.21 points, or 2.15%, at 25,137.69. But under the hood, investors were paying up for companies tied to military demand and aircraft maintenance as Middle East tensions escalated.

That showed up clearly in single,stock action. Lockheed Martin jumped 10.5% after lifting its 2026 sales and profit outlook, while RTX gained 7.3% after raising its own full,year forecasts on strong demand for commercial aerospace maintenance and military systems, according to Reuters. In a market struggling to reward even solid earnings, that kind of bid matters. It tells you traders are still willing to chase visibility and pricing power, just not in the usual growth pockets.

Big Tech stayed under pressure as investors balked at more spending

The biggest drag remained mega,cap tech. Alphabet and Tesla were at the center of the move again as investors recoiled from another round of heavy spending plans tied to AI and future growth. Alphabet fell 7.1% and Tesla dropped 14.5%, with CNBC and Reuters both pointing to investor unease over rising capex and a harsher test for returns on those investments.

Tesla's post,earnings reaction was especially severe. The company reported adjusted earnings per share of 33 cents versus 51 cents expected, while revenue of $28.24 billion beat estimates, according to CNBC. That mix, weak profit quality despite solid revenue, is exactly the sort of result this market is punishing. Alphabet's numbers were better on the surface, but investors focused on the scale of future spending rather than cloud momentum, a dynamic highlighted by Reuters.

There was at least one bright spot after the bell. Intel rose 5.2% in extended trading after forecasting third,quarter revenue of $15.8 billion to $16.8 billion, above the $15.1 billion analyst estimate, and adjusted profit of 38 cents a share versus expectations for 27 cents, according to Reuters. Second,quarter revenue climbed 25.4% to $16.13 billion, with the company citing AI,driven demand for data,center CPUs. That gives traders another read on where AI spending is being rewarded and where it isn't.

Oil and yields are now the market's macro problem

Brent crude settling above $100 a barrel for the first time since May changed the tone of the whole session. U.S. crude settled above $92, according to Reuters, as the conflict in the Middle East widened and shipping risk intensified. Al Jazeera, citing AFP and Reuters, reported that Brent moved past $100 after Houthi attacks on Saudi oil tankers in the Red Sea and renewed concern over traffic through both the Red Sea and the Strait of Hormuz.

That crude spike fed directly into rates. Reuters reported that higher oil prices lifted Treasury yields as traders worried about inflation heading into next week's Fed meeting. The U.S. 10,year Treasury yield was around 4.69% on Friday, according to Trading Economics, after climbing to a more than one,year high during Thursday's move, as also noted in Reuters coverage carried by The Straits Times. For equity traders, the message is straightforward: if oil stays elevated, long,duration growth remains vulnerable.

Fed expectations turned more hawkish

The Fed isn't expected to move next week, but markets are repricing what comes after. Reuters reporting cited by The Straits Times said traders were pricing in an 83% chance of a September rate hike, up from 68% a day earlier. That's a meaningful shift in 24 hours, and it helps explain why yields, the dollar and equity multiples all moved in sync.

This is where the oil shock matters more than the earnings headlines. If energy costs remain high, the Fed can lean hawkish even without a near,term move. That raises the bar for risk assets, particularly richly valued software, semis and consumer discretionary names. Thursday's tape looked like a market beginning to discount that possibility rather than just reacting to one bad earnings batch.

Gold fell, and crypto mostly stayed defensive

Gold didn't act like a classic panic hedge on Thursday. Spot gold fell 2% to $4,047.26 an ounce, while U.S. gold futures for August delivery slid 2.5% to $4,050, according to Reuters reporting carried by The Straits Times. The reason was simple enough: higher oil pushed inflation fears up, Treasury yields rose, and non,yielding assets lost appeal.

Crypto also wasn't offering much shelter. Bitcoin traded around $64,889 on July 24, down 0.25% on the day, while Ether was near $1,880, up 0.22%, according to Trading Economics. Those aren't dramatic moves, so crypto isn't the lead today, but the lack of upside response is notable. In a session defined by inflation risk and higher real yields, digital assets looked more like another risk trade than a haven.

Earnings are still driving sharp stock,specific moves

Thursday reinforced that this market is rewarding clear guidance upgrades and punishing everything else. Beyond the tech weakness, several industrial and defense names responded well to earnings and outlook changes. Reuters noted that industrials were the best,performing S&P 500 sector, up 1.77%, helped by Lockheed and RTX. That sector leadership is worth tracking if geopolitical risk stays elevated and if traders keep rotating toward companies with backlog visibility and direct pricing leverage.

Friday's earnings slate is lighter but still tradable. TipRanks shows reports due from American Express, Verizon, NextEra Energy, Schlumberger and Charter Communications on July 24. After Intel's strong forecast, traders will also keep an eye on whether other cyclicals and old,tech names can echo that better,than,feared tone. The broader setup remains unforgiving, though. Beats alone may not be enough unless guidance improves too.

What to Watch Today

• Oil at $100: Watch whether Brent can hold triple digits after the Middle East flare,up. If it does, expect more pressure on rate,sensitive growth stocks and more support for energy and defense.
• Treasury yields: The 10,year near 4.69% is a key line. A fresh push higher would likely weigh on the Nasdaq again.
• Fed repricing: Traders will be watching any policy commentary and rate,market moves ahead of next week's meeting, especially after September hike odds jumped, according to Reuters coverage.
• Friday earnings: American Express, Verizon, Schlumberger and NextEra Energy are among the names on deck, according to TipRanks.
• Sector rotation: Keep an eye on whether defense, aerospace and industrials continue to absorb flows while mega,cap tech stays under pressure.
• Crypto response: Bitcoin holding around $65,000 matters less than whether it can decouple from the broader risk,off tape. So far, it hasn't.