MARKET COMMENTARY

Markets edged higher last week; however, that narrow leadership came as tension around Iran and oil kept investors on edge and put pressure on the Federal Reserve ahead of their late July meeting.

Here's how that played out across the major indices:

Stock Index Performance

• The S&P 500 rose 1.23%.
• The Nasdaq 100 jumped 1.69%.
• The Dow Jones Industrial Average slipped 0.50%.

What's Driving Markets

Geopolitics Remains a Market Driver. China drew investor interest by holding up better than expected amid global volatility, while the Japanese yen sat near 40-year lows. Additionally, renewed U.S. strikes on Iran sent stock futures tumbling and oil futures spiking over the weekend. For U.S. investors, these geopolitical shifts can affect the dollar, overseas earnings, and the case for investing abroad.

Oil Is Keeping Inflation Risk Alive. As oil futures shot up after the conflict between the United States and Iran reignited over the last week, concerns about rising energy costs made headlines yet again. A prolonged increase in oil prices won't just be felt at the pump; it can ripple across the entire United States economy, contributing to higher prices across most categories. And, as prices increase, additional pressure is placed on the Federal Reserve to address any persistent inflation.

Higher for Longer, But Not Forever. Minutes from the June Federal Reserve meeting, released July 8, showed officials split. Some want rates held high until inflation is fully under control. Others are more worried about slowing growth. That divide points to a gradual path ahead, with another hike unlikely, and aggressive cuts just as unlikely. For everyday borrowers, that means mortgage and credit card rates may stay elevated for now.

The Week Ahead

This week brings a full slate of earnings, inflation data, and geopolitical headlines, with indexes near record highs. The Consumer Price Index (CPI), out Tuesday, July 14, and a wave of large-cap earnings will show whether inflation and profit growth still support current valuations. Watch for signs that inflation is easing enough to keep the Fed on hold, and for earnings commentary on demand and AI-related spending.