Signs of Economic Resilience Boost Stocks

The S&P 500 Index ($SPX) (SPY) today is up +0.34%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.22%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.97%.  September E-mini S&P futures (ESU26) are up +0.26%, and September E-mini Nasdaq futures (NQU26) are up +0.86%. 

Stock indexes are stronger today, with the S&P 500 and Nasdaq 100 posting 1-week highs as they extend Monday’s sharp rally on the last trading day of Q2.  Demand for technology stocks is leading the overall market higher as investors anticipate another strong earnings season beginning next month, driven by the investment boom in artificial intelligence. 

Stocks added to their gains today on signs of economic resilience amid mostly better-than-expected US economic news.  The May JOLTS job openings unexpectedly increased by +9,000 to a 2-year high of 7.594 million, signaling a stronger labor market than expectations of a decline to 7.296 million.  Also, Apr S&P Cotality composite-20 home price index rose +1.14% y/y, stronger than expectations of +0.90% y/y.  In addition, the Jun MNI Chicago PMI fell -6.0 to 56.7, a smaller decline than expectations of 55.1.  On the negative side, the Conference Board’s Jun consumer confidence index rose +0.6 to 91.2, weaker than expectations of 94.4.

Signs of strength in China's economy are supportive of global growth prospects, as China's June manufacturing PMI rose by 0.3 to 50.3, above expectations of 50.1.  Also, the Jun non-manufacturing PMI unexpectedly rose by 0.1 to 50.2, stronger than expectations of a decline to 49.9.

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.   

WTI crude oil (CLQ26) is moving slightly higher today, adding to Monday’s +2% surge.  Tensions remain high in the Middle East, with Iran insisting it has control over traffic through the Strait of Hormuz, a move opposed by the US, Europe, and Gulf Arab nations.  The markets are awaiting today's expected negotiations in Doha between the US and Iran. Energy supplies are picking up as Morgan Stanley said 35 oil and gas tankers exited the Persian Gulf through the Strait of Hormuz last Thursday, the first time the level returned to the 30-to-40 range typical before the US-Iran war started in February.

The markets are discounting a 32% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets are higher today.  The Euro Stoxx 50 climbed to a 1-week high and is up +1.298%. China's Shanghai Composite closed up +0.50%.  Japan's Nikkei-225 Stock Average closed up +0.86%.

Interest Rates

September 10-year T-notes (ZNU6) today are down -6 ticks, and the 10-year T-note yield is up +2.4 bp to 4.398%.  T-notes gave up a slight advance and turned lower today, and the 10-year T-note yield rebounded from a 7-week low of 4.359%.  The strength in stocks today is curbing safe-haven demand for government debt securities and is weighing on T-notes.  T-notes extended their losses today after the May JOLTS job openings report showed an unexpected increase to a 2-year high, a hawkish factor for Fed policy.

European government bond yields are mixed today.  The 10-year German bund yield fell to a 3.5-month low of 2.831% and is down -0.6 bp to 2.851%.  The 10-year UK gilt yield is up +2.9 bp to 4.745%.

German May retail sales rose +1.1% m/m, stronger than expectations of no change and the biggest increase in eleven months.

The German Jun unemployment change unexpectedly fell -1,000, showing a stronger labor market than expectations of a +5,000 increase.

German Jun CPI (EU harmonized) fell -0.2% m/m and rose +2.4% y/y, weaker than expectations of no change m/m and +2.5% y/y.

Swaps are discounting a 6% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

The strength in chipmakers and AI infrastructure stocks is a supportive factor for the overall market today.  SanDisk (SNDK), KLA Corp (KLAC), and Marvell Technology (MRVL) are up more than +6%, and ON Semiconductor (ON), Lam Research (LRCX), ASML Holdings NV (ASML), and Applied Materials (AMAT) are up more than +5%.  Also, Intel (INTC) is up more than +4%, and Advanced Micro Devices (AMD) and Texas Instruments (TXN) are up more than +3%.  In addition, ARM Holdings Plc (ARM) is up more than +2%, and Microchip Technology (MCHP) is up more than +1%. 

Cryptocurrency-exposed stocks are under pressure today with Bitcoin (^BTCUSD) down more than -3%.  Strategy (MSTR) is down more than -9% to lead losers in the Nasdaq 100, and Coinbase Global (COIN) is down more than -5%.  Also, MARA Holdings (MARA) and Galaxy Digital Holdings (GLXY) are down more than -4%, and Riot Platforms (RIOT) is down more than -3%.

AeroVironment (AVAV) is up more than +14% after reporting Q4 revenue of $641.6 million, well above the consensus of $556.4 million, and forecasting 2027 revenue of $2.13 billion to $2.23 billion, the midpoint above the consensus of $2.16 billion. 

Nebius Group NV (NBIS) is up more than +10% to lead gainers in the Nasdaq 100 after President Capital Management initiated coverage on the stock wit a buy recommendation and a price target of $307.  

Air Products and Chemicals (APD) is up more than +9% to lead gainers in the S&P 500 after the company scrapped plans to develop a multibillion-dollar clean energy project in Louisiana.

Avex Corp (AVEX) is up more than +9% after being awarded a $50 million contract from the US Air Force to continue expanding unmanned mission support capabilities for current operations.

Tradeweb Markets (TW) is up more than +5% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $146.

MKS Inc (MKSI) is up more than +5% after BMO Capital Markets initiated coverage on the stock with a buy recommendation and a price target of $453. 

Replimune Group (REPL) is up more than +1% after BMO Capital Markets double-upgraded the stock to outperform from underperform with a price target of $16. 

Concentrix (CNXC) is down more than -16% after reporting Q2 revenue of $2.46 billion, weaker than the consensus of $2.47 billion, and cutting its full-year revenue forecast to $9.93 billion-$10.03 billion from a previous forecast of $10.04 billion-$10.18 billion, below the consensus of $10.11 billion. 

Trade Desk (TTD) is down more than -5% after Arete Research Services LLP downgraded the stock to sell from neutral with a price target of $11.60.

Digital Realty (DLR) is down more than -4% after Blackstone affiliates priced an underwritten public offering of 12.3 million shares of DLR’s common stock at $185 per share, below Monday’s close of $190.58. 

Fortinet (FTNT) is down more than -2% after HSBC downgraded the stock to reduce from hold with a price target of $102.

Morgan Stanley (MS) is down more than -1%, and Goldman Sachs (GS) is down -0.56% after Oppenheimer downgraded the stocks to underperform from market perform.

Earnings Reports(6/30/2026)

Constellation Brands Inc (STZ), NIKE Inc (NKE), Progress Software Corp (PRGS).