Markets Take a Breather as Investors Take Profits
Week Ending July 17, 2026
After several weeks of markets steadily climbing higher, last week finally brought a bit of a pause. While headlines focused on falling technology stocks and renewed tensions in the Middle East, the bigger picture remained largely unchanged.
In many ways, this felt like a healthy reset. Some of the biggest winners of the year, particularly semiconductor and artificial intelligence companies, gave back a portion of their gains as investors locked in profits. That is a normal part of investing. Markets rarely move in a straight line, and periods like this often create opportunities rather than reasons to panic.
Market Overview
Weekly Market Performance (July 13 to July 17, 2026)
- S&P 500: -1.55%
- Nasdaq Composite: -2.90%
- Dow Jones Industrial Average: -0.93%
- MSCI EAFE Index: -0.80%
- S&P/TSX Composite Index: -0.30%
The biggest declines came from technology stocks, particularly companies tied to artificial intelligence and semiconductor manufacturing. After an incredible run over the past several months, many investors simply chose to lock in some profits.
Here in Canada, the TSX slipped just 0.30%, once again showing some resilience compared to the U.S. markets. Higher oil prices provided support for Canada's energy sector, while financial companies continued to provide stability. Our market remains much more diversified than the U.S., with less concentration in technology, which can help reduce volatility during weeks like this.
Why the Market Pulled Back
The biggest story last week was the rotation out of technology.
Semiconductor companies, which have been among the market's strongest performers thanks to artificial intelligence spending, came under pressure as investors took profits. The selling spread across much of the broader technology sector and weighed heavily on both the Nasdaq and the S&P 500.
Renewed tensions in the Middle East also captured investors' attention early in the week, pushing oil prices higher and reminding everyone that geopolitical events can quickly influence market sentiment.
One thing I found encouraging was that money was not leaving the stock market altogether. Instead, investors appeared to be shifting into sectors such as energy, financials, healthcare, and consumer staples. This suggests investors are becoming more selective rather than broadly pessimistic about the economy.
Inflation Continues Moving in the Right Direction
One of the week's brightest spots came from inflation.
The U.S. Consumer Price Index unexpectedly declined on a monthly basis for the first time since 2020. Wholesale prices also came in lower than expected, suggesting inflationary pressures continue to ease.
That is encouraging news because lower inflation gives the Federal Reserve more flexibility when considering future interest rate cuts. While no immediate action is expected, investors welcomed another sign that price pressures are moving in the right direction.
It was also a reminder that markets rarely respond to just one headline. Even with positive inflation news, profit taking in technology stocks had the greater influence on overall market performance.
What Canada Was Telling Us
There was also plenty happening here at home.
Following last week's decision by the Bank of Canada to leave interest rates unchanged, investors continue to watch for signs that inflation is moving sustainably toward the Bank's target. The Bank acknowledged that inflation continues to improve, but it also made it clear that it wants more evidence before considering further interest rate cuts.
Canada also signed a new trade and critical minerals agreement with the European Union this week, aimed at strengthening investment and reducing reliance on global supply chains. While this will not have an immediate impact on markets, it is another step toward supporting Canada's resource sector and long term economic growth.
Higher oil prices also helped support many of Canada's largest energy companies, cushioning some of the weakness seen elsewhere in the market.
What the Week Really Meant
If I had to summarize last week in one sentence, it would be this:
A little profit taking does not change the long term story.
After months of impressive gains, it is perfectly normal to see investors lock in profits and rotate into other areas of the market. Healthy bull markets often experience these types of pauses
The fundamentals that have supported markets remain largely intact. Inflation continues to improve. Businesses are still investing. Employment remains relatively strong. Corporate earnings have generally been better than expected.
Volatility never feels comfortable while it is happening, but history has shown that reacting emotionally to short term market swings is rarely a successful investment strategy.
As I often remind clients, your financial plan was never built around what happens in one week. It was built around where you want to be years from now.
Looking Ahead
This week brings another busy calendar.
Investors will continue watching economic reports for further evidence that inflation is cooling while earnings season moves into high gear.
Several major technology companies, including Alphabet, Tesla, Intel, and Texas Instruments, will report earnings. Given last week's weakness in technology, investors will be paying close attention to what these companies say about artificial intelligence spending and their outlook for future growth.
If I had to sum up the current environment in one sentence, it would be this:
The market has become a little more selective, but the long term outlook remains encouraging.
Short term pullbacks are a normal part of investing. They often remind us why staying diversified and focused on long term goals continues to be one of the best strategies available.
This Week: Key Economic Data
Monday, July 20
- Leading Indicators
- Three-Month Treasury Bill Auction
- Fed Board of Governors meeting
Tuesday, July 21
- Treasury Buyback Announcement
Wednesday, July 22
- Atlanta Fed Business Inflation Expectations
- 20 Year Treasury Bond Auction
- EIA Petroleum Status Report
Thursday, July 23
- Weekly Jobless Claims
- Kansas City Fed Manufacturing Survey
- EIA Natural Gas Report
- Federal Reserve Balance Sheet
Friday, July 24
- Purchasing Managers' Index for Manufacturing and Services
- New Home Sales
This Week: Companies Reporting Earnings
Tuesday, July 21
- Charles Schwab
- Interactive Brokers
- Danaher
- Capital One
- Marsh
- 3M
- Northrop Grumman
- General Motors
Wednesday, July 22
- Alphabet
- Tesla
- GE Vernova
- Philip Morris
- Texas Instruments
- AT&T
- ServiceNow
- CSX
- CME Group
- Moody's
- Kinder Morgan
Thursday, July 23
- Intel
- RTX
- T-Mobile
- Thermo Fisher Scientific
- Union Pacific
- Lockheed Martin
- Newmont, Blackstone
- Freeport McMoRan
- Comcast
Friday, July 24
- American Express
- NextEra Energy
- Verizon
- HCA Healthcare
“Be respectful to your superiors, if you have any.”
– Mark Twain
Take a letter out of it, and it stays put and the same; remove all the letters from it, and it still stays put and stays the same. What is it?
Last Week's Riddle: Brittany carried a load of wood in a wheelbarrow, yet the wood was neither straight nor crooked. How could this be?
Answer: She was carrying a load of sawdust.
Austin was just blending in with Matthew’s stuffed animals.
Footnotes And Sources
1. WSJ.com, July 17, 2026
2. Investing.com, July 17, 2026
3. CNBC.com, July 13, 2026
4. WSJ.com, July 14, 2026
5. CNBC.com, July 15, 2026
6. CNBC.com, July 16, 2026
7. CNBC.com, July 17, 2026
8. CNBC.com, July 14, 2026
9. CNBC.com, July 15, 2026
10. TravelandLeisure.com, April 12, 2026.
11. Health.harvard.edu, February 19, 2026
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