U.S. stocks declined broadly this week as investors shifted focus from growth to value amid heightened tensions in the U.S.-Iran conflict and substantial capital expenditure in artificial intelligence (CapEx). As of July 17, 88% of S&P 500 companies reporting earnings surpassed earnings per share (EPS) expectations, with 85% exceeding revenue forecasts, according to FactSet data.
Next week, four major tech companies from the “Magnificent 7” will report earnings, coinciding with the Federal Reserve’s interest rate decision, which is anticipated to remain unchanged. Significant changes in capital expenditure have affected stocks like Oracle Corp. and Tesla Inc., while Apple Inc.’s upcoming earnings report on July 30 is seen as a critical test for its current valuation.
Overall, small-cap stocks have outperformed the S&P 500 in the first half of 2026, with a need for careful selection as not all small-cap stocks remain viable investments. Analysts highlighted two Asian-based ETFs that have delivered gains over 50% year-to-date, underscoring the importance of looking beyond U.S. markets for growth opportunities.
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