Latest / Finance TL;DR Daily / Oil Spike Ignites Fed Hike Fears as Odds Surge to Eighty-Two Percent
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- Oil Spike Ignites Fed Hike Fears as Odds Surge to Eighty-Two Percent 2026-07-24 Welcome to Finance TL;DR Daily, the podcast where we break down the biggest stories in finance. It's Friday, July twenty-fourth. Today, oil's rapid run to one hundred dollars a barrel is reigniting inflation fears, putting a potential Federal Reserve interest rate hike right back on the table for September. Here's what's moving today: The sudden spike in energy prices is rewriting the market's monetary outlook. Brent crude futures surged seven percent to close at one hundred dollars and sixty-nine cents a barrel on Thursday—the highest level since late May—while West Texas Intermediate advanced six percent to ninety-two dollars and nineteen cents. This surge has pushed the national average for a gallon of gasoline above four dollars. Meanwhile, the labor market remains incredibly tight. Weekly jobless claims fell to one hundred eighty-seven thousand, which is the lowest level since nineteen sixty-nine. In response, traders are dramatically shifting their interest rate expectations. According to the CME FedWatch tool, there is now an eighty-two percent probability that the Federal Reserve will raise borrowing costs at its September meeting, up from just fifty-three percent a week ago. While the central bank is widely expected to keep rates unchanged at three-point-five to three-point-seven-five percent next week, the projected odds of a quarter-point hike at that meeting have also jumped to nearly thirty-eight percent. Along with oil, U.S. Treasury yields climbed, with the two-year note gaining over five basis points—or hundredths of a percentage point—to four-point-three-five-three percent. Christopher Rupkey, chief economist at FWDBONDS, noted that economic growth is showing signs of overheating, though he questioned whether this trend can be sustained with energy prices rising so quickly. While macro fears take center stage, the artificial intelligence boom continues to power impressive growth in tech, even if it is not enough to keep investors happy. Intel reported its second-quarter earnings, posting sixteen-point-one billion dollars in revenue. That is a twenty-five percent year-over-year jump, representing the company's fastest growth rate in almost fifteen years. Growth was driven by its data center and AI segment, which surged fifty-nine percent to six-point-three billion dollars on robust server demand. Adjusting for one-time items, Intel delivered earnings of forty-two cents per share, beating Wall Street expectations, and forecasted stronger-than-expected third-quarter revenue and profit. Intel's Chief Executive, Lip-Bu Tan, hailed the results, pointing to unprecedented demand for AI computing. Yet, despite the stellar numbers, Intel's shares fell during Friday trading, ending a painful month where the stock has tumbled twenty-eight percent. The decline highlights persistent investor anxiety about the sustainability of Intel's turn-around and its ability to defend its market share against rivals. The broader bond market is also experiencing a period of uneasy calibration. U.S. Treasury yields retreated slightly on Friday after their rapid mid-week rise. The ten-year yield fell three basis points to four-point-six-six-seven percent, stepping back from a brief climb past four-point-seven percent on Thursday, which marked its highest level since January of twenty twenty-five. This cooling of yields was helped by the S&P Global Flash purchasing managers index—an active tracker of business activity—falling to fifty-three-point-eight in July and missing economist forecasts. Chief economist Chris Rupkey pointed out that the sudden escalation of conflict in the Middle East has triggered a dramatic, overnight reversal in energy markets. Even with Friday's slight pullback in yields, the eighty percent probability of a September rate hike remains firmly priced in, keeping substantial pressure on corporate and consumer borrowing costs. In the telecommunications sector, Verizon Communications is proving that solid operational execution can overcome a top-line slowdown. Verizon shares climbed nearly three percent on Friday after the carrier beat earnings expectations and bumped up its full-year guidance. While total operating revenue dipped slightly by zero-point-seven percent to thirty-four-point-three billion dollars—largely due to a planned decline in equipment revenue—the company produced a record thirteen-point-seven billion dollars in adjusted EBITDA, which measures core operating profit. Free cash flow climbed twenty-four percent year-over-year, helping Verizon return over nine billion dollars to shareholders in the first half of the year. The solid performance prompted Verizon to lift its full-year earnings-per-share outlook and expand its share buyback target to four-and-a-half billion dollars. Chief Executive Dan Schulman remarked that the results show clear evidence of a structural inflection point. Investors clearly agreed, favoring improved core profitability and strong cash generation over the minor revenue miss. Finally, enterprise software giant Oracle has secured a massive runway of stable business with the federal government. The Pentagon has awarded Oracle a ten-year enterprise software contract worth up to seven billion dollars. This agreement is designed to streamline how the Department of Defense, the Coast Guard, and the intelligence community purchase and manage Oracle's software licenses. The contract features a five-year base period worth over three billion dollars, with five additional option years that could bring the total value to just under seven billion dollars. Department of Defense Chief Information Officer Kirsten Davies emphasized that the deal will drive over four hundred million dollars in taxpayer savings while directly helping military operations. Oracle shares rose three percent in extended trading. For Oracle, securing this high-profile deal provides a highly reliable, decade-long revenue stream that should help offset recent stagnation in its commercial software segment. It has been a week where geopolitical shifts and surging energy prices have forced investors to recalibrate their expectations for inflation and interest rates, even as corporate earnings hold up. This has been Finance TL;DR Daily. We'll see you tomorrow.