Cheaper Oil Arrives

Oil collapsed on hopes of peace. Semiconductor stocks got hit by a threat that may last much longer.

Author

Josh Banuelos
July 28, 2026

Your Daily Dose of Market & Career Clarity

📬 Delivered to 150,000+ ambitious readers

Co-Invest With Firms Like a16z, Bessemer & Y Combinator in Vetted Startup

Market Snapshot

📉 Banana Bits

Co-Invest With Firms Like a16z, Bessemer & Y Combinator in Vetted Startups

Alumni Ventures is giving readers early access to high-potential startup opportunities across today's most active sectors — co-investing alongside firms like Andreessen Horowitz (a16z), Bessemer, and Y Combinator.

You get:

  • Curated deal flow of high-potential startups

  • Co-investment alongside name-brand venture firms

  • No cost to view deals

  • No obligation to invest

Market News

Oil Cracked, So Did the Chip Trade.

Monday delivered the rare and beautiful sight of a market disagreeing with itself. The Dow ripped 263 points. The Nasdaq slid. The S&P 500 closed up 0.02%, the index equivalent of a shrug and did it the hard way, opening roughly 0.8% higher and surrendering every basis point of it by the bell.

The setup was a genuine peace-trade gap. Washington paused strikes on Iran, Trump said talks with Tehran were live, and crude got taken apart: Brent settled −8.7% at $88.36, WTI −7.5% at $82.61. For an economy where gas has pushed back above $4 and airfares are running ~26% over last year, that's the closest thing to a stimulus check anyone's getting this summer. Energy shares paid for it, Occidental and Exxon both closed red, while defensives actually led the tape, with consumer staples and healthcare the day's strongest sectors.

Notice what didn't happen: airlines barely moved. Delta added 1.89% on a 7.5% crude collapse, which tells you the market understands that a price drop and a supply fix are different things.

The other half of the day was a genuine repricing. Chips opened higher on CXMT's spectacular Shanghai debut, then reversed hard when Reuters, citing The Information, reported China had begun producing its own DUV lithography machines. That's the escalation that matters. China going from chip customer to chip competitor in memory is one problem; China building the equipment that makes chips is a different, structural one.

The damage spread through the whole stack. ASML fell 5.80%, AMD 5.17%, Nvidia 4.99%, Teradyne about 4%, Micron roughly 2%, with Applied Materials, Lam Research, and KLA all dragged along. Zoom out and it's less dramatic than it sounds: the Philadelphia Semiconductor Index is still up about 63% in 2026 — but it's now roughly 20% off the record it set in late June.

Which brings us to a very loaded week. Microsoft reports Wednesday, with Apple, Amazon, and Meta close behind, and every one of them will be graded on a single line item: capex. Analysts expect S&P 500 companies to post aggregate Q2 earnings growth near 39%, with AI-linked names supplying a large chunk of it. After Alphabet's and Tesla's spending guidance rattled the sector last week, "we're investing aggressively" has stopped being a flex.

Peel Take: The market priced a peace dividend and a competitive threat on the same day, and only one of them is durable. On the peace half, we'd be careful. What happened was a pause in a military campaign, not a signed deal — Iran flatly denied a ceasefire had been agreed and the Strait of Hormuz is still running near 17% of normal throughput. The China half is the one that should keep you up. Memory competition was already priced as a margin story. Domestic DUV is a moat story, and moats are what the entire semi-equipment multiple is built on.

What’s Ripe

SAP (SAP) 6.88%

  • Monday's move extended a monster Friday, when SAP jumped 9.30% on earnings. Stack them and the stock is up nearly 17% in two sessions off its Thursday close of $146.38.

  • The catalyst was cloud bookings that silenced fears AI would eat enterprise software… the exact fear that had the stock down near its lows a week ago.

  • Peel Take: This is what a de-rating unwinding looks like. SAP spent months being priced as an AI casualty — the theory that if agents can write software, nobody needs the guy who sells the software. One quarter of cloud bookings later, that thesis is on the back foot. Two-day, 17% moves in a company this size are not normal, though. Whoever's still short is doing the buying now, and that's the part of the move you don't want to chase.

Reddit (RDDT) 6.22%

  • A clean bounce off oversold levels after the stock dropped 8.3% on July 22 on a WSJ report it may not renew its Google AI content licensing deal.

  • The panic may have been miscalibrated: DA Davidson figures Google is less than 2% of Reddit revenue. Wedbush went the other way entirely and added Reddit to its Best Ideas list.

  • Peel Take: The Google scare was really two fears wearing one trench coat: a small revenue line, and a much larger question about whether AI summaries quietly strangle Reddit's traffic. The first one is genuinely rounding-error stuff at under 2% of revenue. The second one is the actual bear case and it did not get resolved by a 6% up day. So Thursday matters less for the print than for whether management can talk about distribution without flinching.

What’s Rotten

ASML (ASML) 5.8%

  • The day's worst large-cap decliner, and it had company: Applied Materials, Lam Research, and KLA fell with it as China played disruptor.

  • The trigger: China has reportedly started producing homegrown DUV lithography machines… a direct shot at ASML's core franchise.

  • Peel Take: ASML is the closest thing tech has to a genuine monopoly — nobody else can build these machines, which is precisely why the stock carries the multiple it does. So the market isn't reacting to lost revenue; it's reacting to a crack in the "nobody else can do this" premise. That's why one news report moved $100 a share. One thing to note is that DUV is the older technology — leading edge logic still runs on EUV, where ASML’s lead is measured in years and billions. 

Advanced Micro Devices (AMD) 5.17%

  • A third straight decline, and a genuinely violent session: AMD hit $476.93 intraday, down roughly 8.6%, before rallying into the close.

  • The bizarre part is who was buying the story on the way down. Mizuho raised its target to $625 from $615 and Wedbush lifted its target too, on the same day the stock dropped over 6%.

  • Peel Take: AMD is being sold as a China proxy, which is a little unfair — it's a fabless designer whose competitive problem is Nvidia, not CXMT. But that's how sector selloffs work: correlation shows up first and discrimination shows up later. Unusually, analysts are raising targets into a 5% drawdown, which means the sell-side model and the tape have openly diverged, and one of them is wrong.

🧠 Technical Trip

Interview Q&A from UBS

👉 Want 1-on-1 recruiting help from Barclays bankers & 2,000+ top mentors? Apply to WSO Academy

🦈Deal Dispatch

M&A, IPOs, And Other Notable Transactions

Banana Brain Teaser

Previous

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is?

Answer: 4.50

Today

A company’s revenue increases by 20%, but its profit margin falls from 25% to 20%. Compared with the previous period, by approximately what percentage does the company’s total profit change?

❝

Risk comes from not knowing what you’re doing.

Warren Buffet

How Would You Rate Today's Peel?

Happy Investing,
Chris, Elie, Mitchell, Fernanda, Nick, & Patrick