The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +1.79%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +1.71%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +3.32%. September E-mini S&P futures (ESU26) rose +1.79%, and September E-mini Nasdaq futures (NQU26) rose +3.22%.
Stock indices rallied sharply on Tuesday, with the S&P 500 and Dow Jones Industrials posting new all-time highs and the Nasdaq 100 posting a 3-week high. Strength in technology stocks led the broader market higher on some better-than-expected earnings results. Palantir Technologies rose more than +29% after reporting stronger-than-expected Q2 revenue and raising its full-year revenue forecast. Also, Zebra Technologies rose more than +28% after reporting better-than-expected Q2 EPS and raising its full-year EPS forecast. In addition, Caterpillar rose more than +5% after reporting Q2 adjusted EPS that was well above the consensus.
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Market sentiment also improved on Tuesday after a plunge in crude oil prices eased inflation fears and pushed bond yields lower. Crude prices gave up an overnight advance and sold off as the prospect of a deal between the US and Iran to reopen the Strait of Hormuz appears to be gaining traction, with US and Iranian officials sounding hopeful about an agreement to reopen the waterway. The 10-year T-note yield fell -6 bp to 4.62%.
On the negative side for stocks was Tuesday’s US economic news that was weaker than expected. June factory orders unexpectedly fell -0.3% m/m, weaker than expectations of +0.2% m/m. Also, June factory orders ex-transportation unexpectedly fell -0.4% m/m versus expectations of +0.4% m/m and the biggest decline in 14 months. In addition, June JOLTS job openings fell -178,000 to 7.359 million, showing a weaker labor market than expectations of 7.454 million.
The US June trade deficit was -$73.3 billion, slightly larger than expectations of -$73.0 billion and a negative factor for Q2 GDP.
Sep WTI crude oil prices (CLU26) tumbled more than -5% on Tuesday to a 3-week low after a Qatari spokesman said a proposed resolution “is being circulated between the US and Iran,” cautioning that a deal has not yet been reached. Crude prices extended their losses on Tuesday when Treasury Secretary Bessent said: “There is a chance we may have a deal today or tomorrow to open the strait.” Also, the key Saudi export port of Yanbu in the Red Sea had its busiest day on Monday since Houthi rebels began attacking shipping in the region, as more ships transited through the Bab el-Mandeb chokepoint.
President Trump has threatened Iran with renewed air strikes and stressed that his latest offer of talks is Iran’s “last chance” as he demanded full reopening of the Strait of Hormuz. A diplomatic resolution is hanging on talks between Oman and Iran to get more ships moving through the strait, but Iran continues to insist on its authority over the waterway.
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 322 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data.
The markets are discounting a 58% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled higher on Tuesday. The Euro Stoxx 50 rose to a new all-time high and closed up +0.94%. China's Shanghai Composite closed up +0.33%. Japan's Nikkei-225 Stock Average closed up +0.32%.
Interest Rates
September 10-year T-notes (ZNU6) on Tuesday closed up +13.5 ticks. The 10-year T-note yield fell -5.5 bp to 4.621%. T-notes recovered from overnight losses and pushed higher on Tuesday after crude oil prices fell sharply. WTI crude oil sank more than -5% on Tuesday to a 3-week low, lowering inflation expectations. T-notes added to their gains on Tuesday amid weaker-than-expected US economic reports, including June JOLTS job openings and June factory orders. Tuesday’s rally in the S&P 500 to a new record high limited the upside in T-notes.
European government bond yields moved lower on Tuesday. The 10-year German bund yield dropped to a 3-week low of 3.102% and finished down -4.5 bp to 3.107%. The 10-year UK gilt yield fell to a 3-week low of 4.892% and finished down -5.6 bp to 4.897%.
Markets are discounting a 79% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.
US Stock Movers
Chipmakers and AI-infrastructure stocks rallied sharply on Tuesday, boosting the overall market. The Philadelphia Stock Exchange Semiconductor Index ($SOX) climbed to a 1-week high and closed up more than +6%. ARM Holdings (ARM) closed up more than +17%, and Marvel Technology (MRVL) closed up more than +12%. Also, Sandisk (SNDK) and Intel (INTC) closed up more than +10%, and Micron Technology (MU), Advanced Micro Devices (AMD), Microchip Technology (MCHP), Lam Research (LRCX), and Qualcomm (QCOM) closed up more than +7%. In addition, KLA Corp (KLAC) and Broadcom (AVGO) closed up more than +6%, and Applied Materials (AMAT), NXP Semiconductors NV (NXPI), Analog Devices (ADI), and Texas Instruments (TXN) closed up more than +5%.
Cybersecurity stocks rallied on Tuesday. Cloudflare (NET) closed up more than +7%, and Palo Alto Networks (PANW) and Zscaler (ZS) closed up more than +5%. Also, CrowdStrike Holdings (CRWD) and Okta (OKTA) closed up more than +4%, and Fortinet (FTNT) closed up more than +3%.
Airlines and cruise line operators moved higher on Tuesday amid sinking crude oil prices. Alaska Air Group (ALK) closed up more than +4%, and American Airlines Group (AAL), United Airlines Holdings (UAL), Southwest Airlines (LUV), and Carnival (CCL) closed up more than +3%. Also, Delta Air Lines (DAL), Royal Caribbean Cruises (RCL), and Norwegian Cruise Line Holdings (NCLH) closed up more than +1%.
Energy stocks and service providers were under pressure on Tuesday after WTI crude oil fell more than -5% to a 3-week low. Diamondback Energy (FANG) closed down more than -3% to lead losers in the Nasdaq 100, and APA Corp (APA) closed down more than -3%. Also, Chevron (CVX), ExxonMobil Holdings (XOM), ConocoPhillips (COP), and Devon Energy (DVN) closed down more than -1%.
Palantir Technologies (PLTR) closed up more than +29% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q2 revenue of $1.94 billion, better than the consensus of $1.81 billion, and raising its full-year revenue estimate to $8.15 to $8.16 billion from a previous estimate of $7.65 billion to $7.66 billion.
Zebra Technologies (ZBRA) closed up more than +26% after reporting Q2 adjusted EPS of $6.35, well above the consensus of $4.37, and raising its full-year adjusted EPS estimate to $20.75 to $21.25 from a previous forecast of $$18.30 to $18.70.
Ameresco (AMRC) closed up more than +23% after raising its full-year adjusted EPS forecast to $1.15 to $1.35 from a previous estimate of $1.06 to $1.28, stronger than the consensus of $1.10.
Gartner (IT) closed up more than +22% after raising its full-year adjusted Ebitda forecast to $1.57 billion from a previous forecast of $1.52 billion, above the consensus of $1.56 billion.
Broadridge Financial Solutions (BR) closed up more than +7% after reporting Q4 revenue of $2.22 billion, stronger than the consensus of $2.17 billion.
Caterpillar (CAT) closed up more than +5% to lead gainers in the Dow Jones Industrials after reporting Q2 adjusted EPS of $8.17, well above the consensus of $6.17.
Bruker Corp. (BRKR) closed down more than -21% after reporting Q2 revenue of $838.5 million, weaker than the consensus of $853.6 million.
Aptiv Plc (APTV) closed down more than -16% to lead losers in the S&P 500 after reporting Q2 net sales of $3.30 billion, weaker than the consensus of $3.32 billion, and cutting its full-year net sales forecast to $12.60 billion to $12.80 billion from a previous forecast of $12.80 billion to $13.20 billion.
NRG Energy (NRG) closed down more than -15% after saying that lower load and power prices in Texas, as well as higher power supply costs, are weighing on its full-year earnings.
Chipotle Mexican Grill (CMG) closed down more than -9% after removing jalapeños from multiple stores in Minnesota after learning the peppers may be linked to a salmonella outbreak in the state that’s sickened 110 people.
Nike (NKE) closed down more than -2% to lead losers in the Dow Jones industrials after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $40.
Earnings Reports (8/5/2026)
Albemarle Corp (ALB), Allstate Corp/The (ALL), APA Corp (APA), AppLovin Corp (APP), Atmos Energy Corp (ATO), Axon Enterprise Inc (AXON), Block Inc (XYZ), CDW Corp/DE (CDW), Cencora Inc (COR), CF Industries Holdings Inc (CF), Charles River Laboratories International (CRL), Corpay Inc (CPAY), CVS Health Corp (CVS), DoorDash Inc (DASH), eBay Inc (EBAY), Eli Lilly & Co (LLY), Expedia Group Inc (EXPE), Global Payments Inc (GPN), Honeywell Aerospace Inc (HONA), Host Hotels & Resorts Inc (HST), Insulet Corp (PODD), Iron Mountain Inc (IRM), Kraft Heinz Co/The (KHC), McKesson Corp (MCK), MetLife Inc (MET), Motorola Solutions Inc (MSI), News Corp (NWSA), NiSource Inc (NI), Occidental Petroleum Corp (OXY), Phillips 66 (PSX), Realty Income Corp (O), Sandisk Corp (SNDK), Solventum Corp (SOLV), STERIS PLC (STE), Texas Pacific Land Corp (TPL), Uber Technologies Inc (UBER), Walt Disney Co/The (DIS), Western Digital Corp (WDC), Zimmer Biomet Holdings Inc (ZBH).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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