Market Insights Recap — Week of July 20, 2026

Hello, I’m Steve Orr, Chief Investment Officer for Texas Capital’s Private Bank.

Well, this is not a quiet summer by any measure. Gulf War III appears to be underway, and that has juiced crude prices higher. Now, plenty of hope and wishes from the TV experts last week after June’s consumer price index ticked down slightly to 2.6%. Now, that June headline was helped by slightly lower gas prices at the pump. Was it the temporary halt in the Iran versus everybody war? Nope. The U.S. and a number of other countries were pulling crude oil out of their strategic reserves to help keep a lid on prices. Thanks to a big drawdown in our strategic reserves, back in 2023 before the presidential election, our reserve is basically empty. So, going forward, our pump prices are going to be more sensitive to what’s happening — or not happening — in the Middle East. 

Now, refilling the SPR means that kind of puts a floor under oil prices. Now, talking like an economist: On one hand, prices are going to pull in more production over the next several years, helping lower prices down the road; on the other hand, higher prices will push up inflation readings in the next few months. Now, diesel is also going to continue to be in short supply thanks to Ukraine cutting Russian exports. So, trucking and transport rates are going to add to producer price inflation.

Inflation aside, the economy continues to run at a solid second-gear pace. Tailwinds: capital expenditures, corporate profits, lower tariff levels and spending from a full-employment workforce. Headwinds: geopolitical turmoil, future tariffs and AI is straining some resources. Lower tariffs, though, regulatory burden and tax breaks are going to help propel GDP near 3% in the second half of the year. Okay, enough of the economist talk. Interest rates do care about inflation — and our $39.5 trillion debt. Long-term interest rates are slowly grinding higher, with the 10-year Treasury nearing 4.6%. Given those concerns, the 5% level would definitely give some stock traders pause. 

Now, at the moment though, most stock traders are captivated by those Korean memory stocks exploding higher and then imploding over the last few trading dates. The AI meme continues to plough through industries. Remember a while back? Cement for data centers, and then it was copper for wires — and now it’s a possible memory chip shortage. What’s next? Well, for us longer-term investors, we don’t know, but pass the popcorn. 

Second quarter earnings season: off to a good start. The big banks adding to a possible 24% year-over-year rise in earnings per share for the 500 members of the S&P 500. This week’s Magnificent Seven names: Tesla and Alphabet, better known as Google. Next week: Microsoft, Meta, Apple and Amazon. So, watch for tariff talk to come back into the news this week as these temporary 10% waivers expire. Low unemployment, broad participation in the stock markets and parts of the AI world kind of coming back to Earth. We expect stocks to consolidate around these levels during earnings season, gathering energy for after the midterm elections. Stay invested; ‘til next time.