Wall Street just booked its worst day in a month. Tonight two forces pull the tape in opposite directions: a Big Tech selloff and a surge in oil.
US stocks closed sharply lower in the prior session. The Nasdaq fell 2.2%, its worst single day in a month. Pressure came from mega-cap tech and a jump in oil that pushed Treasury yields to their highest since January 2025.
Two stories dominate tonight. First, fears over AI capital spending after Tesla and Alphabet reported Q2. Second, oil topping $100 a barrel on Middle East escalation. The two pull the market in different directions.
Lifted by the oil surge and an Evercore upgrade; Q2 earnings Aug 5
Tonight's Catalysts 🧨
AI-spending fears: Tesla and Alphabet
Tesla (TSLA) led the drop after Q2 free cash flow swung negative to -$1.1B, its first negative reading in over two years. Thin operating margins pushed several analysts to cut price targets. Alphabet (GOOGL) posted strong revenue, but a jump in AI capital spending left investors worried about future cash flow.
Oil tops $100 and energy stocks
Oil surged on Middle East escalation, including Houthi attacks on tankers in the Red Sea. Brent held above $100 and WTI traded near $92. Chevron (CVX) and Occidental (OXY) each rose more than 2% pre-market as direct beneficiaries.
Schlumberger earnings today
Schlumberger (SLB) reports Q2 before the US open. Analysts expect EPS of $0.52, down about 30% year over year, on revenue near $8.67B. Management had flagged that Middle East disruptions would weigh on the quarter. As an oilfield services provider, SLB is a barometer for how the oil spike feeds through.
US futures pointed lower this morning, extending the prior session's pressure. Asian markets opened in the red, with Japan and South Korea leading losses. Energy was the bright spot amid the selloff, while tech stayed under pressure.
Macro Note 📝
The oil surge revived inflation fears. The 10-year Treasury yield climbed to 4.71%, its highest since January 2025, and lifted bets that rates stay higher for longer. That weighs on richly valued stocks, tech most of all.
Conclusion
Tonight is a clash of two themes. The Big Tech selloff drags the index, while the oil surge lifts energy but pushes yields up. For traders, it is a moment to separate the pressured sectors from the beneficiaries.
Tonight's Watchlist gives you a map: watch how Tesla and Alphabet trade after earnings, and see whether energy names can hold momentum if oil stays above $100. What stocks are you watching tonight?
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