The Prime Daily: 23 July 2026

Authored By Prime Research | Published at: Jul 23, 2026 08:55 AM IST

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AI Spending Fears Drag Markets Lower

Wall Street closed slightly lower on Wednesday, with the tech-heavy Nasdaq Composite leading the modest decline. Investors turned defensive ahead of a heavy slate of Magnificent Seven earnings, stalling the brief recovery that had followed a rally in semiconductor stocks.

Beneath the index-level moves, individual results drove sharp swings. AT&T and Philip Morris rallied on stronger-than-expected spring profits.

Alphabet beat estimates with $9.11 EPS on $119.8 billion in revenue, with cloud revenue up 82%, but shares fell roughly 3% after hours as the company raised its 2026 capex guidance to $195-205 billion from $180-190 billion. Free cash flow turned negative on the AI infrastructure buildout, sharpening investor scrutiny of AI spending payoffs across the Magnificent Seven. Tesla also came under pressure after adjusted earnings missed expectations.

IBM cut its 2026 revenue growth forecast to 4-5% after mainframe sales sank 42% and both profit and revenue missed estimates, as customers redirect budgets toward AI data-centre hardware. Palantir fell 4% on valuation concerns and sector-wide caution ahead of its August 3 earnings report.

SpaceX has fallen 47% from its high, shedding roughly $1.4 trillion in value. AMD secured a major Microsoft Azure deal for its Helios AI infrastructure, adding to wins with OpenAI and Meta. Texas Instruments beat estimates but fell in extended trading, while Micron faces bearish calls on weak DRAM/NAND pricing set against AI-driven cost pressures.

The US dollar index eased slightly to 101.13 after hitting a one-week high, while the yen held near a 40-year low against the dollar amid intervention speculation. Sterling steadied after UK inflation cooled to 2.6%, with traders now focused on today’s ECB decision and next week’s Fed meeting.

Brent settled near $96, at multi-week highs, as the US conducted an 12th consecutive day of strikes on Iran and Iran retaliated against US bases. Houthi threats to blockade Red Sea shipping tied to Saudi exports added a further supply-risk premium, pushing Treasury yields to two-month highs near 4.66% and weighing on equities.

The rapid rise in energy prices renewed inflation concerns, keeping 10-year yields near their highs for the year and prompting traders to reassess the odds of near-term Fed rate moves.

Asian markets are trading higher Thursday ahead of earnings from Texas Instruments and other bellwethers that should offer further signal on the AI trade.

Nifty extended its losing streak for the third straight session yesterday, shedding 191 points to close at 23,996 on concerns over rising energy prices.

The Indian rupee came under renewed pressure, slipping 32 paise to close at 96.56 amid a surge in crude oil prices and rising geopolitical uncertainty. Fresh concerns around U.S. tariff rhetoric also weighed on sentiment.

Nifty broke below the lowest level of the past nine sessions, pointing to weakening momentum. Nifty has the next support zone of 23800, while the 24,200–24,300 band is likely to cap any near-term rebound.

Indian markets are set to open lower on rising concerns over higher crude oil prices.

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