NEW YORK, July 23, 2026, 12:10 p.m. EDT — U.S. equities declined, with investors watching a $7 billion withdrawal that is challenging AI-related bets as crude oil prices approached the $100 mark.
- By 11:45 a.m. EDT, the S&P 500 was down 1.4%. The Nasdaq Composite slipped 2.6%, and the Dow declined 1.0%.
- Alphabet NASDAQ:GOOGL and Tesla NASDAQ:TSLA posted a joint free-cash-flow shortfall of $6.96 billion for the second quarter.
- Brent crude climbed 7%, topping $100, while the yield on the 10-year Treasury hit 4.70%.
U.S. equities dropped steeply at midday following Alphabet and Tesla’s combined cash outflow of almost $7 billion. Brent crude’s climb past $100 heightened inflation concerns. The cash market continued trading.
Both firms reported solid revenue figures. However, investors turned their attention to expenditures and cash flow conversion. The earnings reports moved the market’s focus away from growth and toward immediate returns.
Alphabet shares fell 6.53% and Tesla dropped 13.99% as of 11:52 a.m. EDT. Together, their average loss stood at 10.3%, more than seven times the decline of the broad-market index.
| Security | Price | Preliminary move | Q2 free cash flow |
|---|---|---|---|
| SPDR S&P 500 ETF Trust NYSEARCA:SPY | $736.92 | fell 1.40% | n/a |
| Invesco QQQ Trust NASDAQ:QQQ | $690.37 | dropped 2.12% | n/a |
| SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) | $515.87 | slipped 1.07% | n/a |
| Alphabet | $319.75 | lost 6.53% | -$5.855 billion |
| Tesla | $321.67 | declined 13.99% | -$1.1 billion |
The price snapshot shown is based on trades around 11:52 a.m. EDT. Cash-flow data is sourced from disclosed quarterly statements.
Alphabet reported a 24% increase in revenue, reaching $119.8 billion. The company’s cloud division expanded by 82% to $24.8 billion. Capital expenditures totaled $44.9 billion, resulting in negative free cash flow of $5.855 billion.
Management increased its capital spending guidance for 2026 to a range of $195 billion-$205 billion, compared to the earlier projection of $180 billion-$190 billion.
AJ Bell (LON:AJB)’s Russ Mould pointed to “a healthy degree of scepticism” regarding investment returns. Concerns surfaced swiftly. Reuters
Tesla posted revenue of $28.24 billion and achieved record deliveries for the quarter. Adjusted earnings came in at 33 cents per share, missing the consensus estimate of 51 cents. Capital expenditures rose to $5.8 billion, contributing to a $1.1 billion cash shortfall.
Elon Musk, Chief Executive, described 2026 as “a massive capex year.” Projected expenditure is set to surpass $25 billion, close to three times higher than the previous year. Automotive gross margin reached 16.3%, falling short of the 18.04% forecast. Reuters
Oil prices surged for a second time, shaking up valuations. Brent climbed 7% to $100.71, trading above $100 for the first time since May. West Texas Intermediate advanced 6% to $92.01.
The yield on the 10-year Treasury rose to 4.70% from 4.67% on Wednesday. Initial jobless claims dropped to 187,000, marking the lowest level since September 1969.
Markets assigned about a 36% likelihood to a quarter-point rate hike by the Federal Reserve next week, up from nearly 12% the previous week.
The energy and defense sectors outperformed. Exxon Mobil NYSE:XOM advanced 2.10%, and Lockheed Martin NYSE:LMT climbed 11.36% after increasing its sales and profit outlooks for 2026.
Upcoming megacap earnings plans will also be scrutinized for cash-flow performance. On Thursday, initial reporters saw that revenue gains were not enough.
Risks: Resumed shipping lanes may weigh on oil prices and aid a rebound in technology stocks. An extended disruption would increase inflation risks and maintain high yields.
As of 12:10 p.m. EDT, movements were still in the early stages. The most evident midday trend leaned toward near-term cash rather than capital-intensive growth.
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