US stocks are poised for a potentially strong week as investors remain optimistic about a resolution to the ongoing tensions in the Strait of Hormuz, despite a recent stalemate in peace talks with Iran. Crude oil prices have climbed above $106 per barrel, and Goldman Sachs has raised its Q4 oil price target to $90, reflecting concerns over supply disruptions. The market’s focus will also be on upcoming central bank meetings, including the Fed’s, where expectations of interest rate cuts later this year could further bolster sentiment.

The tech sector has overtaken defense as the top performer, with major players like Intel and AMD seeing significant gains. In contrast, defense stocks have struggled, contributing to the underperformance of European indices compared to their US counterparts. This divergence highlights the ongoing rotation back into tech, driven by strong earnings and AI optimism.

As earnings season heats up, attention will be on the “Magnificent 7,” with key reports from tech giants like Meta, Apple, and Microsoft. Investors will be looking for strong revenue growth and insights into future strategies, particularly regarding AI investments, which could influence market direction in the coming days.

StoxFeed tracks this as a market signal: Oil prices are responding to OPEC decisions and geopolitical tensions

Source: xtb.com