Edward Meir's week in review and thoughts on the week of July 27, 2026

Energy prices reacted by moving significantly higher. Both crude contracts finished up by roughly 9% on the week, with Brent settling above $100/barrel Thursday for the first time since May 22. Products had a solid showing as gasoline and distillates ended at two- and three-month highs, respectively. In addition, crack spreads traded at record levels both in the US and in Europe.

There were no strikes reported by either side this weekend as the Trump administration decided to halt attacks as it contemplates next steps. Reports out on Friday also noted the administration was evaluating a pair of cease-fire proposals from both the Chinese and the Iraqis. In addition, the New York Times and CNN reported over the weekend the US Defense Department raised concerns with the White House about US munitions running low. For its part, Iran said Sunday it would also halt its attacks as long as the US maintains its pause.

Crude oil markets responded in Monday morning’s Asia session by selling off sharply; Brent is down by almost $5/barrel versus Friday’s close, with nearby futures trading at just under $92/barrel. We are seeing sharp declines in product prices as well.

Stock market

US equity markets had a rough week. The Nasdaq lost almost 3%, while the S&P 500 and the Dow each fell by 1.6% and .9%, respectively. The Philadelphia Semiconductor index was particularly soft on ongoing worries about AI spending. Although demand for AI infrastructure remains robust, investors are becoming increasingly concerned about the sector’s economics and the unprecedented capital spending required to support it. The unease is being picked up in the corporate debt markets as well. In this regard, the Financial Times pointed out that Meta had to increase the yield on a $12 billion issue tied to one of its data centers in El Paso, Tx., by roughly 40 basis points (to 7%) in order to entice investors.

In the US treasury markets, the 2-year note yield settled Friday at 4.33%, up 16 basis points on the week, while the 10-year ended up 14 basis points, ending at 4.68%. The higher rates come as no surprise as bond yields are shadowing crude oil prices almost to the T.

With treasury rates rising, the dollar was on track for its biggest weekly gain in about a month — up by about 0.7%. The yen was in the spotlight once again, finishing the week at 40-year lows (at just under 164). For now, the Japanese government is trying to talk up the currency, with the country’s Finance Minister reiterating Friday the government’s readiness to act. But to be effective, the government will have to signal it is prepared to raise interest rates, something it has not categorically stated it would do. In the meantime, the US Treasury called for strong action, saying excessive currency volatility was undesirable.

Metals

Despite rising oil prices and a stronger dollar, base metals held their ground this week. Zinc and nickel led the way, up by about 1.9% and 2.5%, respectively, while copper and aluminum ended with a 0.9% advance and a 0.3% gain. Lead and tin finished 0.2% and 1% higher. We were surprised by copper’s firmer tone, as the complex has been tracking the semiconductor equity space reliably of late, but this correlation seems to have broken down. Copper could be drawing support instead from ongoing inventory declines on both the LME and Shanghai, along with nervousness about a pending White House decision on copper cathode import duties.

Gold and silver both had a relatively quiet week. Gold finished up by about $52/ounce week over week (up by about 1.2%), while silver did better, gaining about $4/ounce (4%). Platinum and palladium both ended the week just about flat.

Trade

There were quite a few developments on the US trade front this past week. Thursday, the Trump administration announced new tariffs of 10%-12.5% on goods from 60 trading partners, citing allegations of forced labor practices. However, the expected announcement did not have much of an impact as there are a host of exemptions attached.

Furthermore, the tariffs will replace a 10% global tariff that was scheduled to expire last week and so there is not much of a net change for much of the trading community. The tariffs are not going to stack on top of Section 232 duties either. These latest duties are being imposed under the legally more robust Section 301 of the 1974 Trade Act, but nevertheless, we think court challenges will arise as the forced labor allegations lack proof. Moreover, pretty much all the countries impacted have laws on banning such labor practices anyway.

Trump also unveiled 50% tariffs on a wide range of Canadian imports “ranging from wine to cement and ice hockey,” along with “dairy products, swimming pools, furniture, seeds, clothing and fishing rods will also be impacted”, Reuters reports. The tariffs are set to take effect in 30 days’ time but will impact a relatively minor proportion of Canadian exports, thought to be around $20 billion of the $382 billion worth of trade that the US conducted with Canada in 2025.

Trump invoked Section 338 of US trade law, permitting a president to impose tariffs of up to 50% against countries deemed to have discriminated against US goods. Reuters notes this is the first time that this particular law has been used in nearly a century. We suspect the clause will be easy to invoke going forward as well given the administration will likely find several more cases where US trading partners have discriminated against US goods and services.

The White House also found time to revisit aluminum tariffs last week, saying companies could be eligible for reduced tariffs on imports if they submit plans to “build, refurbish or expand” US aluminum facilities and commit to begin construction by January 2029. The administration will consider how feasible proposed plans are and what annual aluminum production is expected to be in advance of giving any concessions. Once companies receive approval, their tariff burden will be halved each year for a volume of aluminum imports that matches projected production levels.

This is not a move that will necessarily change the investing climate much in our view, as a key component behind any ramp-up in aluminum investment is not being addressed at all, namely, power. US smelters are at a distinct disadvantage here, since they will be unable to compete on bidding for power with the likes of hyperscalers and data centers.

Macro readings and other news from the past week

• The Federal Reserve meets this week. We are looking for somewhat more hawkish language to come out of the policy statement and the subsequent Warsh press conference.
• June new home sales came in at 628,000, up from the prior reading of 618,000, but remain 5.6% below year-ago levels. Sales remain pressured by affordability constraints tied to rising mortgage rates. The Western region of the country (with the priciest homes) saw the biggest sales hit month-over-month, but there was also weakness in the more affordable Southern region — the nation’s largest. The median home price fell 2.7% from a year earlier to $398,300, while home inventory remains high, at 9.3 months of supply. Separately, the weekly MBA mortgage applications index rose by 1.9% from the prior week’s reading of -2.7%.
• The American Institute of Architects expects overall nonresidential building spending to decline 0.3% in 2026, with manufacturing construction down 11.6% following a 6.7% drop last year. Commercial spending is projected to rise 4.8% but would fall 1% without counting data centers. Healthcare and recreation are expected to support a 2.8% increase in institutional construction.
• Out of Europe, we got some S&P Global flash PMI numbers last week that show a welcome rebound in business activity. The July Eurozone service PMI recovered to a five-month high of 51.6 (up from 49.4), while manufacturing PMI rose to 52.0 (from 51.4) and is at a one-year high. Activity in Germany returned to growth (to 52.2), while in France, the contraction the country has been seeing in services slowed marginally. In Britain, firms reported their first growth in three months and businesses were the most upbeat since the Gulf conflict began. The Japanese PMI came in at 54.7, with output growing the fastest since February 2014 and new orders posting their largest increase in more than five years.
• In the US, the July S&P Global manufacturing PMI fell to 53.8 from the prior reading of 53.9. Services PMI fell to 53.6 from 51.2.
• Reuters reports global crude steel production in June rose 1.7% from a year earlier to 155.7 million tons, according to the World Steel Association. Chinese crude steel output rose 0.4% to 83.7 million tons in June year over year, but has been declining on a month-over-month basis.
• Global primary aluminum output in June fell 1.5% year on year to 5.98 million tons, according to the International Aluminum Institute.

This week’s US macro readings

It will be a much busier week on the US macro front compared to what we saw last week.

• Monday, we get June durable goods orders (expected at 2.1%, last -4.5%).
• Tuesday brings us the US trade balance for June, as well as the S&P Case-Shiller home price index (expected at 1.3%, last 1.1%). July consumer confidence also comes out Tuesday (expected at 92.5, last 91.2).
• Wednesday, we get the Federal Reserve policy statement.
• Thursday brings us weekly initial claims (expected at 203,000, last 187,000) as well as our first reading for Q2 GDP (expected at 2.1%). Personal income and spending numbers for June also come out Thursday (expected at 0.4% and 0.3%, respectively, last 0.7% and 0.3%) as does the June PCE price index Thursday (expected at -0.1%, last 0.4%). The year-over-year June PCE reading is expected to drop to 3.7% (last 4.1%). The core PCE is expected to come in at 0.2% (last 0.3%), while the year-over-year core is expected to come in at 3.3% (last 3.4%). The June PCE reading is the last of the three June inflation readings that will show a sizable drop; July inflation numbers will likely be higher given the recent spike we have seen in energy.
• Friday brings us the Chicago PMI for July (expected at 55, last 56.7) as well as July consumer sentiment readings (expected at 54, last 54.4).

We wish all our readers all the best for the upcoming week.