$100 Oil Price Sends Shockwaves Through Market as Earnings Season Heats Up

The market had its worst week in two months due to disappointing earnings from tech giants Alphabet and Tesla, which failed to impress investors despite their solid financials. The era of applauding AI spending for its own sake is over, with 'We're spending more' now being seen as an interrogation prompt rather than a bull case.

This week's earnings calendar will be crucial in determining the direction of the market. On Wednesday, Microsoft and Meta will report their quarterly results, followed by Apple and Amazon on Thursday. The Federal Reserve is also set to announce its decision on interest rates, with the core PCE inflation rate expected to rise to 3.4%.

The stakes are high, with earnings season so far delivering excellent growth rates, strong breadth, and a high beat rate. However, none of this has mattered in recent weeks due to rising oil prices and a higher discount rate, which have weighed on the market. The Fed's decision will be closely watched, with some predicting a hike in interest rates.

The week ahead promises to be action-packed, with several key companies reporting their earnings, including Visa, UPS, Boeing, Coca-Cola, Royal Caribbean, JetBlue, Ford, and Enphase. The data calendar is also busy, with the Q2 GDP print, June core PCE, and employment cost index all due out this week.