The S&P 500 Index ($SPX) (SPY) on Wednesday closed down -0.17%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.49%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.83%. September E-mini S&P futures (ESU26) fell -0.19%, and September E-mini Nasdaq futures (NQU26) fell -0.90%.
Stock indices settled mixed on Wednesday, with Dow Jones Industrials posting a new all-time high. However, the S&P 500 fell from a record high, and the Nasdaq 100 fell from a 1-month high and turned negative as a -7% decline in Advanced Micro Devices led chipmakers lower after the company’s third-quarter sales forecast underwhelmed investors expecting stronger performance amid healthy demand. Also, SpaceX closed down more than -13% after the company projected higher-than-expected spending on its AI business.
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Some positive corporate earnings results supported stocks on Wednesday. Booking Holdings closed up more than +6% after reporting better-than-expected Q2 gross bookings. Also, Amgen closed up more than +3% after reporting stronger-than-expected Q2 EPS.
Wednesday’s US economic news was slightly weaker than expected and a drag on stocks. The July ADP employment change rose by +44,000, weaker than expectations of +65,000. Also, the July ISM services index rose +0.1 to 54.1, weaker than expectations of 54.5. In addition, the July ISM services price paid sub-index unexpectedly rose +2.6 to 70.3, stronger than expectations of a decline to 65.0 and a sign of sticky service price pressures.
Hawkish Fed comments were bearish for stocks and bonds. Tuesday evening, Kansas City Fed President Jeff Schmid said, “Given the strength of demand and investment, I do not see the current stance of monetary policy as restrictive. As such, I believe that bringing inflation down to the Fed’s 2% objective will require tighter policy.” On Wednesday, Minneapolis Fed President Neel Kashkari said that the Fed should start to raise interest rates incrementally right now to curb inflation that remains too high.
US MBA mortgage applications fell -2.9% in the week ended July 31, with the purchase mortgage sub-index down -3.6% and the refinancing mortgage sub-index down -1.9%. The average 30-year fixed-rate mortgage rose +5 bp to a 1-year high of 6.81% from 6.76% in the prior week.
Sep WTI crude oil prices (CLU26) fell to a 3-week low on Wednesday after Axios reported that the US, Iran, and Oman were nearing an interim agreement to reopen the Strait of Hormuz. Crude prices initially pushed higher on Wednesday after a Houthi military spokesperson said the group will escalate attacks on Saudi oil tankers in the northern Red Sea to prevent them from transiting the area. However, Saudi Aramco said that Houthi threats have yet to affect Saudi crude exports through the Red Sea and that the kingdom is preparing contingency measures to keep barrels moving.
The outlook for strong Q2 earnings is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2. So far, earnings results have been positive, with 86% of the 387 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data.
The markets are discounting a 55% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Wednesday. The Euro Stoxx 50 fell from a new all-time high and closed down -0.15%. China’s Shanghai Composite climbed to a 2-week high and closed up +1.47%. Japan’s Nikkei-225 Stock Average rose to a 1.5-week high and closed up +3.66%.
Interest Rates
September 10-year T-notes (ZNU6) closed up +1.5 ticks on Wednesday. The 10-year T-note yield rose +0.6 bp to 4.619%. Sep T-notes rose to a 2-week high on Wednesday, and the 10-year T-note yield rebounded from a 1-week low of 4.592%. WTI crude oil fell to a 3-week low on Wednesday and lowered inflation expectations, a bullish factor for T-notes. Also, Wednesday’s July ADP employment and July ISM services reports were weaker than expected, a dovish factor for Fed policy.
Wednesday’s move in the S&P 500 to a new all-time high reduced safe-haven demand for government debt securities and was bearish for T-note prices. Also, hawkish Fed comments were negative for T-note prices after Kansas City Fed President Jeff Schmid and Minneapolis Fed President Neel Kashkari said tighter Fed policy is needed to reduce inflation. In addition, the July ISM services price paid sub-index unexpectedly increased, a sign of service price pressures.
In supportive news for T-note prices, the Treasury on Wednesday maintained the amount of government securities to be auctioned at next week’s quarterly refunding at $125 billion, unchanged from last quarter, and retained its previous guidance for future debt issuance, signaling no change in note and bond auction sizes well into 2027.
European government bond yields were mixed on Wednesday. The 10-year German bund yield rebounded from a 3-week low of 3.088% and finished up +0.4 bp to 3.111%. The 10-year UK gilt yield dropped to a 3.5-week low of 4.874% and finished down -0.6 bp to 4.890%.
The Eurozone July S&P composite PMI was revised upward by +0.1 to 52.0 from the previously reported 51.9.
Eurozone June PPI eased to 4.6% y/y from 5.9% y/y in May, right on expectations.
Markets are discounting an 84% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.
US Stock Movers
Advanced Micro Devices (AMD) closed down more than -7% to lead chipmakers lower on Wednesday after its Q3 sales forecast underwhelmed investors expecting a stronger performance amid healthy demand. Also, Microchip Technology (MCHP), Marvell Technology (MRVL), Lam Research (LRCX), and Qualcomm (QCOM) closed down more than -3%. In addition, ARM Holdings Plc (ARM), NXP Semiconductors NV (NXPI), Applied Materials (AMAT), and Texas Instruments (TXN) closed down more than -2%.
Mining stocks rallied on Wednesday with gold jumping to a 7-week high, silver rallying to a 1-month high, and copper soaring to a 2-month high. Anglogold Ashanti (AU) closed up more than +8%, and Hecla Mining (HL), Coeur Mining (CDE), and Barrick Mining (B) closed up more than +7%. Also, Newmont Corp (NEM) closed up more than +6%, and Freeport McMoRan (FCX) closed up more than +3%. In addition, Southern Copper (SCCO) closed up more than +1%.
Insulet (PODD) closed down more than -20% to lead losers in the S&P 500 after cutting its full-year revenue estimate on a constant currency basis to +20% to +2% from a previous estimate of +21% to +23%.
DaVita (DVA) closed down more than -17% after reporting Q2 dialysis revenue per treatment of $415.87, below the consensus of $417.16, and forecasting full-year adjusted operating income of $2.15 billion to $2.25 billion, the midpoint below the consensus of $2.23 billion.
SpaceX (SPCX) closed down more than -13% to lead losers in the Nasdaq 100 after disclosing higher-than-expected spending on its artificial intelligence business, despite reporting better-than-expected Q2 earnings.
CDW Corp. (CDW) closed down more than -9% after reporting a Q2 gross profit margin of 20.1%, below the consensus of 21%.
Match Group (MTCH) closed down more than -7% after reporting Q2 revenue of $853.1 million, below the consensus of $856.6 million, and forecasting Q3 revenue of $885 million to $895 million, the midpoint below the consensus of $891.2 million.
Viasat (VSAT) closed down more than -6% after reporting Q1 revenue of $1.16 billion, below the consensus of $1.20 billion.
Honeywell Aerospace (HONA) closed down more than -5% after forecasting full-year organic revenue growth of 4% to 5%, below a previous forecast of 9%, and forecasting full-year adjusted EPS of $7.60 to $7.90, below the consensus of $8.68.
Uber Technologies (UBER) closed down more than -5% after forecasting Q3 gross bookings of $58.25 billion to $60.25 billion, the midpoint below the consensus of $59.32 billion.
Shopify (SHOP) closed up more than +16% to lead gainers in the Nasdaq 100 after reporting Q2 revenue of $3.58 billion, stronger than the consensus of $3.45 billion.
Charles River Laboratories (CRL) closed up more than +11% to lead gainers in the S&P 500 after reporting Q2 revenue of $1.00 billion, above the consensus of $975.7 million.
Compass (COMP) closed up more than +6% after reporting Q2 revenue of $4.31 billion, above the consensus of $4.11 billion, and forecasting Q3 revenue of $3.85 billion to $4.05 billion, stronger than the consensus of $3.77 billion.
Kratos (KTOS) closed up more than +6% after raising its full-year revenue forecast to $1.75 billion to $1.81 billion from a previous estimate of $1.70 billion to $1.76 billion, better than the consensus of $1.74 billion.
Booking Holdings (BKNG) closed up more than +6% after reporting Q2 gross bookings of $51.00 billion, above the consensus of $49.68 billion.
Amgen (AMGN) closed up more than +4% to lead gainers in the Dow Jones Industrials after reporting Q2 adjusted EPS of $6.29, well above the consensus of $5.62.
Eli Lilly (LLY) closed up more than +4% after reporting Q2 revenue of $22.97 billion, better than the consensus of $20.59 billion, and raising its full-year revenue forecast to $85 billion to $87 billion from a previous estimate of $82 billion to $85 billion, above the consensus of $85.31 billion.
Arista Networks (ANET) closed up more than +3% after reporting Q2 revenue of $3.04 billion, well above the consensus of $2.83 billion, and forecasting Q3 revenue of $3.30 billion, better than the consensus of $2.95 billion.
Earnings Reports (8/6/2026)
Aflac Inc (AFL), Airbnb Inc (ABNB), Akamai Technologies Inc (AKAM), American International Group Inc (AIG), Becton Dickinson & Co (BDX), Bio-Techne Corp (TECH), ConocoPhillips (COP), Consolidated Edison Inc (ED), Constellation Energy Corp (CEG), Datadog Inc (DDOG), Evergy Inc (EVRG), Fiserv Inc (FISV), Fox Corp (FOXA), Gen Digital Inc (GEN), Howmet Aerospace Inc (HWM), Kenvue Inc (KVUE), Keurig Dr Pepper Inc (KDP), Microchip Technology Inc (MCHP), Molson Coors Beverage Co (TAP), Monster Beverage Corp (MNST), Parker-Hannifin Corp (PH), Ralph Lauren Corp (RL), Republic Services Inc (RSG), ResMed Inc (RMD), Sempra (SRE), Targa Resources Corp (TRGP), Trade Desk Inc/The (TTD), Viatris Inc (VTRS), Warner Bros Discovery Inc (WBD), Zoetis Inc (ZTS).
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