The tech sector’s recent attempt at a recovery faces a significant hurdle today as Alphabet prepares to report second-quarter earnings. Analysts are scrutinizing the company’s capital expenditure, as the four major AI hyperscalers are projected to see their spending exceed operating cash flow by next year. Tesla also faces pressure, with expectations that the firm may return to a cash-burn phase, testing investor appetite for high-growth stocks in a tightening bond market.

Energy remains the primary driver of market anxiety. Brent crude has reached a six-week high, fueled by reports of oil tankers rerouting away from the Red Sea following warnings from Houthi militants. Goldman Sachs warns that a failure to resolve the regional conflict could push oil to $120 per barrel by the fourth quarter, further complicating the outlook for fuel storage ahead of winter. In Japan, Finance Minister Katayama has signaled potential intervention as the yen weakens, a move exacerbated by the country’s status as a major oil importer and uncertainty regarding U.S. trade tariffs.