Market Outlook: Big Tech Volatility, Consumer Earnings and Oil Highs
Corporate Earnings Test Consumer Facing Sectors
Consumer-facing sectors face a rigorous test this week as major corporations report earnings and executives appear on television broadcasts. Hormel Foods CEO John Ghingo is scheduled to appear on CNBC’s Squawk on the Street during the 11 a.m. hour Eastern Time. Hormel shares have dropped 17% over the past three months, resting 21% below their June peak. Coca-Cola reports earnings Tuesday morning, riding a 13% gain over three months that pushed the stock to a new high the prior week. Royal Caribbean also reports Tuesday morning, with CEO Jason Liberty joining Squawk on the Street later in the day. Royal Caribbean shares are down 4% over three months and 21% below their February high.
AI Adoption Correlates with Higher Unemployment
Labor market pressures are also mounting alongside artificial intelligence integration. CNBC anchor Carl Quintanilla highlighted a Goldman Sachs note stating that the share of United States firms adopting artificial intelligence in regular business functions demonstrates a statistically significant negative correlation with employment growth and a statistically positive correlation with unemployment.
Semiconductor and Communication Sector Rebounds and Declines
Technology hardware and communication services face severe pullbacks from earlier highs. The iShares Semiconductor ETF is off 25% from its high. Amazon sits 13% below its August 3 high. In the communication services sector, which hit lows not seen since June 2025, data guru Gina Francolla noted that AppLovin and T-mobil are trading at 52-week lows, leaving the sector down 15.5% from its May high.
Energy Stocks Rise as International Markets Fluctuate
Energy stocks moved against the broader tech downturn as Chevron and ExxonMobil both hit all-time highs on Monday, with further coverage scheduled on Morning Call with Morgan Brennan. International markets experienced sharp political volatility. Following the re-election of Luiz Inácio Lula da Silva in Brazil, the iShares MSCI Brazil ETF fell nearly 20% on its first trading day, bringing its decline to 30% from its 52-week high as markets reacted to the outcome. In Israel, a contentious national election takes place on Tuesday, leaving the iShares MSCI Israel ETF down 12% from its May high while maintaining an 11% gain year-to-date. World Bank Group President Ajay Banga is scheduled to appear live on Squawk Box during the 8 a.m. hour Tuesday, addressing emerging markets where the iShares MSCI Emerging Markets ETF sits 13.6% below its June high.
