Strength in Chipmakers Boosts Stock Indexes

The S&P 500 Index ($SPX) (SPY) today is up +0.48%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.26%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.27%.  September E-mini S&P futures (ESU26) are up +0.49%, and September E-mini Nasdaq futures (NQU26) are up +1.26%. 

Stock indexes are climbing today, led by chipmakers, after South Korea’s SK Hynix saw its American depositary receipts (ADRs) listing more than seven times oversubscribed, signaling strong investor demand.  The US offering by SK Hynix would raise about $24.5 billion for the company, making it the second-largest by a foreign company, according to Bloomberg calculations.  Strength in trucking and freight stocks is also lifting the broader market after Citigroup upgraded the sector.

Stocks are moving higher today despite an escalation of hostilities in the Middle East as the US and Iran traded attacks against each other for a second day. 

Signs of strength in the US labor market are also supportive of stocks after weekly initial unemployment claims unexpectedly fell -2,000 to a 6-week low of 215,000, showing a stronger labor market than expectations of a +2,000 increase to 217,000.  Conversely, today’s housing news was negative for stocks after Jun existing home sales unexpectedly fell -2.4% m/m to 4.09 million, weaker than expectations of an increase to 4.20 million.

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) gave up an early advance today and is down more than -1% on speculation that the tit-for-tat attacks between the US and Iran will not escalate any further.  Crude prices initially moved higher after the US military struck Iran for a second day today, hitting about 90 Iranian targets to degrade the country's ability to attack commercial shipping in the Strait of Hormuz.  Iran responded by targeting US bases in Bahrain, Kuwait, and Qatar with drones and missiles. On Wednesday, President Trump said the ceasefire with Iran is over, raising the prospect of persistent hostilities in the region that could disrupt energy supplies.  The US on Tuesday also revoked the Iran oil waiver that allowed buyers to purchase and transport Iranian oil legally.

The markets are discounting a 26% 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 is up +1.10%.  China's Shanghai Composite recovered from a 1-month low and closed up +1.65%.  Japan's Nikkei-225 Stock Average closed up +1.38%.

Interest Rates

September 10-year T-notes (ZNU6) today are up +4 ticks, and the 10-year T-note yield is down -2.8 bp to 4.551%.  T-notes are moving higher today amid an increase in safe-haven demand after the US launched attacks against Iran for a second day. T-notes added to their gains after US Jun existing home sales unexpectedly declined.  Gains in T-notes are limited after weekly US jobless claims unexpectedly fell to a 6-week low, a sign of labor market strength that is hawkish for Fed policy.   Also, supply pressures are bearish for T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today. 

European government bond yields are moving lower today.  The 10-year German bund yield fell from a 1.5-month high of 3.118% and is down -0.5 bp to 3.087%.  The 10-year UK gilt yield is down -7.1 bp to 4.903%.

German trade news was mixed, with May exports unexpectedly rising +0.9% m/m, versus expectations of a -0.4% m/m decline.  May imports fell -2.5% m/m, weaker than expectations of -0.8% m/m.

Swaps are discounting a 13% 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 moving higher today, providing support to the overall market.  The iShares Semiconductor ETF (SOXX) is up more than +4%.  ARM Holdings Plc (ARM) is up more than +11%, and SanDisk (SNDK) and ON Semiconductor (ON) are up more than +8%.  Also, Advanced Micro Devices (AMD), Micron Technology (MU), KLA Corp (KLAC), and Western Digital (WDC) are up more than +7%, and Lam Research (LRCX), Applied Materials (AMAT), and Marvell Technology (MRVL) are up more than +6%.  In addition, Seagate Technology Holdings NV (STX) and Microchip Technology are up more than +5%, and NXP Semiconductors NV (NXPI) and Qualcomm (QCOM) are up more than +4%. 

Trucking companies are moving higher today after Citigroup upgraded the sector.  FedEx Freight Holding (FDXF) is up more than +7%, and Old Dominion Freight Line (ODFL) and Knight-Swift Transportation Holdings (KNX) are up more than +3%.  Also, ArcBest (ARCB), JB Hunt Transport Services (JBHT), CH Robinson Worldwide (CHRW), and United Parcel Service (UPS) are up more than +2%.  In addition, Marten Transport Ltd (MRTN), Saia Inc (SAIA), and XPO Inc (XPO) are up more than +1%. 

Airline stocks and cruise line operators are climbing today with WTI crude oil prices down by more than -1%.  Norwegian Cruise Line Holdings (NCLH) is up by more than +5%, and Alaska Air Group (ALK) is up more than +4%.  Also, American Airlines Group (AAL) and Carnival (CCL) are up more than +3%, and United Airlines Holdings (UAL), Delta Air Lines (DAL), Southwest Airlines (LUV), and Royal Caribbean Cruises Ltd (RCL) are up by more than +2%.

Cerebras Systems (CBRS) is up more than +8% after announcing it plans to expand its European AI infrastructure to 200MW of total compute capacity by the end of 2027.  Goldman Sachs downgraded the stock to sell from neutral with a price target of $19.

Alnylam Pharmaceuticals (ALNY) is up more than +5% to lead gainers in the Nasdaq 100 after rivals AstraZeneca and Ionis Pharmaceuticals slumped after a late-stage trial of their Wainua drug failed to prevent heart problems in patients.  Ionis Pharmaceuticals (IONS) is down more than -20% on the news.

Ceco Environmental Corp (CECO) is up more than +5% after JPMorgan Chase initiated coverage on the stock with a recommendation of overweight and a price target of $130.   

Granite Construction (GVA) is down more than -8% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $139.

Paramount Skydance (PSKY) is down more than -7% to lead losers in the S&P 500 after Arete Research downgraded the stock to sell from neutral with a price target of $2.

Costco Wholesale (COST) is down more than -4% after reporting that June total comparable sales rose 8.8%, below the consensus of 9.8%.

PepsiCo (PEP) is down more than -3% after reporting Q2 operating profit of $4.02 billion, weaker than the consensus of $4.06 billion.

International Business Machines (IBM) is down more than -2% after Starbucks said it was developing in-house tools with the help of artificial intelligence that could replace some software applications it buys from IBM. 

Mattel (MAT) is down more than -1% after Goldman Sachs downgraded the stock to sell from neutral with a price target of $12.

Earnings Reports(7/9/2026)

Immersion Corp (IMMR), Nurix Therapeutics Inc (NRIX), PepsiCo Inc (PEP), Simply Good Foods Co/The (SMPL), Simulations Plus Inc (SLP), WD-40 Co (WDFC).