July 23, 2026

The European Central Bank kept its benchmark interest rates unchanged, in line with analysts' expectations.

International

The European Central Bank (ECB) decided today to keep its three benchmark interest rates unchanged, a decision in line with analysts' consensus expectations. Thus, the main refinancing operations rate remains at 2.40%, the level in place since the 25 basis point increase implemented at the June 11 meeting, the first since 2023. The underlying issue continues to be the tension between energy-related inflationary pressures stemming from the conflict in the Middle East and weak economic growth, projected at around 0.8% for 2026. Analysts anticipate another rate hike before the end of the year, with September being the most likely time.

As for US stocks, the main North American indices closed yesterday with limited changes. The S&P 500 remained virtually unchanged, as did the Dow Jones, while the Nasdaq fell 0.6%. Year-to-date, all three indexes are showing positive returns: +9.5% for the S&P 500, +10.5% for the Nasdaq, and +8.6% for the Dow Jones.

Regarding U.S. Treasury yields, widespread increases were observed across the curve. The 1-year Treasury yield moved from 4.07% to 4.10%, the 3-year yield advanced from 4.30% to 4.34%, and the 10-year yield shifted from 4.63% to 4.66%.

Finally, regarding the second-quarter corporate results released yesterday after the market close, Alphabet reported revenues of $119.8 billion, exceeding analysts' expectations of $116.9 billion, with a 17% increase in search revenue and an 82% increase in its cloud services unit. However, the stock is down almost 5% in pre-market trading today, following an upward revision of the year's capital expenditure plan from $195 billion to $205 billion. Earnings per share (EPS) reached $9.11 compared to the estimated $2.88, although the difference is almost entirely explained by an unrealized gain of $99 billion from the revaluation of non-listed equity holdings, which contributed approximately $6.26 per share. Excluding that effect, EPS was around $2.85, in line with analysts' expectations. Tesla, meanwhile, reported record revenue of $28.24 billion (up 26% year-over-year), although its EPS of $0.33 fell short of the $0.49 forecast, with an operating margin compressed to 1.4% and negative free cash flow; the stock is also down 7.5% in pre-market trading today. In the other reports, EPS from Philip Morris and Texas Instruments beat estimates, while GE Vernova and IBM fell short.

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