Stocks closed mixed on Friday and mostly lower for the week.

Crude oil ended lower on Friday and higher for the week.

Middle East headlines surrounding the escalating tensions, and the widening conflict, which includes shipping lane attacks, has sent oil back up after a meaningful retreat in months prior following the fragile Memorandum of Understanding.

After 13 days of U.S. strikes on Iran, President Trump paused further strikes over the weekend in the name of diplomacy. But the threat of larger strikes on Iran and the return to all-out war remains. And that has been keeping the energy markets on edge.

Both sides have indicated a willingness to continue negotiations. But words are different than actions. We'll see if any of the dialogue leads to a ceasefire, let alone a peace deal. But the market remains hopeful that a solution can be found, along with the regular flow of oil in the region.

Keeping volatility in check has been another stellar earnings season, so far. And even though Alphabet and Tesla sank last week on increasing AI CapEx, sales and earnings in aggregate this earnings season have been nothing short of impressive.

We'll get another 1,012 companies on deck to report this week, including four more Magnificent 7 stocks: Microsoft and Meta on Wednesday, 7/29, and Apple and Amazon on Thursday, 7/30.

On the economic report front last Friday, we got the PMI Composite report, which showed the Composite Index improve to 53.6 vs. last month's 51.9, but under views for 54.2. The Manufacturing Index was at 53.8 vs. last month's 53.9 and estimates for 54.3. The Services Index was at 53.6 vs. last month's 51.2 and estimates for 51.2.

And New Homes Sales rose to 628,000 units (annualized) vs. last month's upwardly revised 618K (from 580K), and forecast for 613K.

This week we'll get the regular docket of econ reports. But the main event will be Wednesday's FOMC Announcement. The consensus is for the Fed to keep rates unchanged with a 62.1% likelihood. But that also means a 37.9% chance of a quarter-point raise. Either way, the market will be paying close attention to the language used in the announcement, not to mention the Fed Chair Press Conference that will follow.

Investors will then turn their attention to Thursday's Personal Consumption Expenditures (PCE) index (the Fed's preferred inflation gauge). While inflation has come in better than expected recently (albeit higher on the headline rate), the continuing rise in oil prices means future reports are likely to see headline inflation tick up.

The market will also be looking for reaction to last week's announcement that the U.S. will be imposing new tariffs (10%-12%) on 60 countries. Those replace the 10% global tariffs that expired last Friday. While some are not new, in that the levels remain the same, some are. This includes adding a 25% tariff on most U.S. imports from Brazil due to their repeated unfair trade practices. You'll recall after the Supreme Court struck down the original tariffs, the Administration was able to impose other tariffs using different statutes. Some of those were temporary, hence the expiration date. Others are more permanent (or longer-lasting), and those are the ones being applied now. This comes on the heels of the announced 50% tariffs the U.S. will impose on Canada as a means of reciprocation for Canada discriminating against American goods, in particular autos, alcohol and dairy products.

Should be a busy week this week.

See you tomorrow,