Earnings won the whipsaw — the jobs test next.

The month’s central question — whether enormous AI spending would pay off — was answered in the bulls’ favour, and it mattered more than the Fed. Microsoft and Amazon delivered hard evidence that cloud demand is accelerating, and the market climbed even against a more hawkish central bank than anyone expected. That does not dissolve the two overhangs the month exposed — a divided Fed still worried about inflation, and a Gulf war that keeps threatening oil — but it reframes them as risks to trade around rather than through. For all the drama, the broad indices ended July roughly flat to lower; the takeaway is a market still anchored by earnings, now facing a genuine macro test in Friday’s jobs report.

1. 01

   A volatile week finished higher — the S&P up ~1% and the Nasdaq ~1.6%, snapping a two-week skid — but only after a violent midweek plunge and a two-day rebound.

2. 02

   The Fed held on a hawkish, divided 9–3 vote, with three dissents toward a hike, driving the worst broad-market day since April 2025.

3. 03

   The cloud answered the AI-capex doubt: Microsoft posted a record one-day value gain and Amazon jumped 15% on 37% AWS growth; Apple was the exception, off 7% on a soft guide.

4. 04

   Soft Q2 GDP (1.5%) and in-line core PCE (3.3%) later eased the hawkish-Fed fear and pulled Treasury yields back off their highs.

5. 05

   The Gulf pause frayed, with fresh US strikes lifting oil off its lows, and by the weekend there was no formal ceasefire — though mediators floated a 10-day truce.

• The megacaps led the recovery — Microsoft’s record day and Amazon’s cloud surge snapped the two-week decline.
• The Fed was the shock — a hawkish 9–3 hold sent yields up midweek before the data eased the fear.
• Energy and gold held firm — oil stayed off its peak but the war premium is intact, and gold held near records.

Tap Week or YTD on each card. Week = 27–31 Jul; YTD figures approximate, through 31 Jul. Single names appear as news, not recommendations.

The scoreboard captures the week’s lesson: the bull case’s core bet — that megacap earnings would prove AI spending is paying off and pull the market up — was vindicated, even against a more hawkish Fed than any scenario expected. In this market, earnings have repeatedly trumped the macro; the risk is assuming they always will, which is why Friday’s jobs report matters.

The week’s brief de-escalation did not hold. By the weekend there was no formal ceasefire, the June memorandum was reported void, and there were no active negotiations — even as fresh US strikes late in the week frayed the pause and lifted oil off its lows. The one constructive thread is a proposal from regional mediators for a 10-day ceasefire, presented to both Washington and Tehran but not yet accepted. Underneath the diplomacy, the physical picture is severe: traffic through the strait remains heavily disrupted, enough to contribute to fuel shortages in parts of Asia. Oil sits off its ~$102 peak but with the risk premium intact. These are competing, fast-moving claims; the fate of the 10-day proposal and the flow of ships are the clearest gauges of where this goes next.

Vault Wealth’s house view: we hold the balanced, cautious stance we returned to as the strikes resumed — a balanced book with residual energy and gold hedges, adding no risk until a durable de-escalation is confirmed. Acceptance of the ceasefire proposal, or oil holding below $85 with traffic recovering, would let us lean back into risk; a return toward $95 or a broadening of the strikes would send us defensive again.