It was another deflating week for the stock market, as rising oil prices and climbing bond yields finally seemed to shake investors out of their complacency. For a while it looked like equity markets might keep looking through the latest surge in crude, but when Brent topped $100 a barrel on Thursday, that got people’s attention. Energy analysts are sounding alarms, with one telling Morningstar’s Karen Gilchrist that the situation is actually worse than last time. Add to that a string of earnings disappointments from heavyweights like Alphabet and Tesla, both of which slid amid concerns about their massive capital expenditure plans, and you have a recipe for a bruising week. Tesla’s nearly 19 percent decline was its worst weekly loss since the pandemic crash of March 2020.
Then there is Elon Musk’s SpaceX, which continues to generate headlines for all the wrong reasons. The IPO drew plenty of superlatives for its sheer size, but now the losses piling up for investors who bought in after the offering are earning their own superlatives. The stock is down 43 percent from the high reached in the week following its public debut and sits 15 percent below the price at which the record-sized IPO hit the market. With earnings due August 4, the results could be critical for sentiment. But two days later comes an even bigger test, the first lockup expiration date for pre-IPO shareholders. That could unleash a flood of additional shares onto the market that would dwarf the original offering, potentially pressuring the stock further and meaning some index funds could end up holding significantly more SpaceX in their portfolios in the coming months.
With so many crosswinds buffeting equities, Morningstar chief US strategist Dave Sekera, chief economist Preston Caldwell, and investment specialist Susan Dziubinski gathered this past week to discuss where stocks may be headed next, what the economic outlook really looks like, and importantly, where investors might find opportunities right now. Meanwhile, over in the bond market, former Fed Vice Chair Richard Clarida, now an economic advisor at Pimco, shared his firm’s latest secular outlook with Morningstar’s Leslie Norton. Among the areas Pimco is flagging is private credit, where PitchBook LCD data appears to support concerns about growing risk.
Finally, sustainable investing strategies may be finding their footing again after a brutal start to 2026 marked by poor performance and relentless political headwinds. Returns have been picking up lately, and analysts are pointing to specific drivers behind the revival. Whether the rebound has staying power remains to be seen, but for ESG-focused investors who have endured a difficult stretch, any good news is welcome indeed.