Stock Indexes Supported by Strength in Chipmakers and AI Stocks

The S&P 500 Index ($SPX) (SPY) today is up +0.43%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.04%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.17%.  September E-mini S&P futures (ESU26) are up +0.46%, and September E-mini Nasdaq futures (NQU26) are up +1.33%. 

Stock indexes are moving higher today, led by strength in chipmakers and AI infrastructure stocks.  Also, crude oil prices are lower as oil flows through the Strait of Hormuz accelerate and after OPEC+ on Sunday agreed to raise its crude output target. Lower crude prices are easing inflation expectations and lowering bond yields, with the 10-year T-note yield down -2 bp to 4.46%. 

Stocks and bonds also have carryover support from last Thursday’s smaller-than-expected increase in US nonfarm payrolls, which bolstered speculation that the Fed will not raise interest rates anytime soon.

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 down -0.5% but remains above last Thursday’s 4.25-month low.  Crude oil prices are under pressure as Saudi Arabia and the United Arab Emirates ramp up shipments nearly to pre-war levels. Also, OPEC+ on Sunday agreed to add 188,000 bpd to their output target, beginning August 1, in line with plans to complete the reversal of production curbs imposed a few years ago.

The markets are discounting a 24% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets are moving lower today.  The Euro Stoxx 50 fell from a new record high and is down -0.47%.  China's Shanghai Composite closed down -0.06%.  Japan's Nikkei-225 Stock Average closed down -0.01%.

Interest Rates

September 10-year T-notes (ZNU6) today are up +4 ticks, and the 10-year T-note yield is down -1.9 bp to 4.464%.  Sep T-notes are moving higher today amid a decline in WTI crude oil prices, which has reduced inflation expectations.  T-notes also have carryover support from last Thursday’s weaker-than-expected Jun payrolls report, which reduced the chances of the Fed tightening monetary policy.  Supply pressures are limiting gains in T-notes as the Treasury will auction $119 billion T-notes and T-bonds this week, beginning with a $58 billion auction of 3-year T-notes on Tuesday.

European government bond yields are mixed today.  The 10-year German bund yield climbed to a 2-week high of 2.940% and is up +0.3 bp to 2.938%.  The 10-year UK gilt yield is down -0.4 bp to 4.779%.

Eurozone May retail sales rose +0.2% m/m, weaker than expectations of +0.3% m/m.

The Eurozone July Sentix investor confidence index rose by +10.3 to a 4-month high of -3.1, stronger than expectations of -10.0.

German May factory orders rose +1.9% m/m, stronger than expectations of +1.1% m/m.

Swaps are discounting a 3% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

Chipmakers and AI infrastructure stocks are climbing today, helping lift the overall market.  The iShares Semiconductor ETF (SOXX) is up more than +3%.  Western Digital (WDC) is up more than +8% to lead gainers in the S&P 500 and Nasdaq 100, and Seagate Technology Holdings Plc (STX) is up more than +6%.  Also, ARM Holdings Plc (ARM), Broadcom (AVGO), and ON Semiconductor (ON) are up more than +5%, and Advanced Micro Devices (AMD) and Qualcomm are up more than +4%.  In addition, Intel (INTC) and Texas Instruments (TXN) are up more than +3%, and ASML Holding NV (ASML), Microchip Technology (MCHP), Marvell Technology (MRVL), KLA Corp (KLAC), Lam Research (LRCX), and SanDisk (SNDK) are up more than +2%. 

Cybersecurity stocks are rallying today, a positive factor for the overall market.  CrowdStrike Holdings (CRWD) is up more than +6%, and Palo Alto Networks (PANW), Okta (OKTA), and Fortinet (FTNT) are up more than +4%.  Also, Zscaler (ZS) is up by more than +3%, and Cloudflare (NET) is up more than +2%. 

Software stocks are under pressure today, limiting gains in the broader market.  Workday (WDAY) is down more than +3%, and Intuit (INTU) is down more than -2%.  Also, Microsoft (MSFT), Adobe (ADBE), Autodesk (ADSK), and Salesforce (CRM) are down more than -1%.

Space Exploration Technologies (SPCX) is up more than +3% after Haitong International initiated coverage of the stock with a recommendation of outperform and a price target of $191. 

US Bancorp (USB) is up more than +2% after Jeffries upgraded the stock to buy from hold with a price target of $75.

Murphy USA (MUSA) is up more than +1% after Goldman Sachs upgraded the stock to neutral from sell.

ZIM Integrated Shipping Services Ltd (ZIM) is down more than -7% after Ynet reported that Israeli Prime Minister Netanyahu said the proposed sale of the company is “not on the agenda.” 

Brown & Brown (BRO) is down more than -1% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $55.

Earnings Reports(7/6/2026)

None.