Stock Indexes Settle Higher as Chipmakers Soar

The S&P 500 Index ($SPX) (SPY) on Tuesday closed up +0.89%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.74%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.93%.  September E-mini S&P futures (ESU26) rose +0.81%, and September E-mini Nasdaq futures (NQU26) rose +1.82%. 

Stock indexes settled higher on Tuesday as a rebound in chipmakers and AI-infrastructure stocks gathered steam.  The recent selloff in chipmakers has cheapened valuations, enticing dip buyers ahead of earnings results of megacap technology stocks this week, beginning with Alphabet and Tesla on Wednesday.  On the downside, software stocks were weak on Tuesday after Morgan Stanley downgraded several in the sector.  Also, rising crude oil prices pushed bond yields higher, with the 10-year T-note yield climbing to a 2-month high of 4.64% on Tuesday.

A positive start to earnings season is also supporting stock gains. 91% of the S&P 500 companies reporting Q2 earnings results thus far have beaten estimates, according to data compiled by Bloomberg. 

WTI crude oil (CLQ26) rose more than +2% on Tuesday to a 5-week high as the US and Iran exchanged strikes for a 10th consecutive day even as mediators sought to revive a truce.  The US targeted military command centers, launch sites, and air defenses in Iran today.  Meanwhile, Iran attacked US military sites in Kuwait and Jordan.  The UK navy also reported Iran struck two vessels around the Strait of Hormuz.  President Trump said on Tuesday that the US has “no interest” in meeting with Iran until they are ready for serious peace negotiations.

Also, Houthi rebels on Monday said they will impose a maritime blockade on Saudi Arabia in retaliation for what they say is the kingdom's siege on the Yemeni capital, a potential threat to Saudi Arabian crude exports through the Red Sea.  President Trump said Tuesday that if there is a blockade in the Red Sea, the US “will take care of it.”

The outlook for strong Q2 earnings, which begin in earnest this week, 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.   

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 settled higher on Tuesday.  The Euro Stoxx 50 closed up +0.94%.  China's Shanghai Composite closed up +1.79%.  Japan's Nikkei-225 Stock Average closed up sharply by +3.26%. 

Interest Rates

September 10-year T-notes (ZNU6) on Tuesday closed down -7 ticks, and the 10-year T-note yield rose +4.0 bp at 4.632%.  Sep T-notes fell to a 1-week low, and the 10-year T-note yield climbed to a 2-month high of 4.638%.   WTI crude oil prices jumped more than +2% to a 5-week high on Tuesday, boosting inflation expectations, a hawkish factor for Fed policy.  Also, Tuesday's strength in stocks has reduced safe-haven demand for T-notes.  Heightened Middle East tensions are supporting safe-haven demand for T-notes after President Trump threatened a disproportionate response for any Americans killed by Iran. 

European government bond yields were mixed on Tuesday.  The 10-year German bund yield climbed to a 2-month high of 3.185% and finished up +1.3 bp to 3.163%.  The 10-year UK gilt yield fell -0.2 bp to 5.030%.

The German Jul ZEW survey expectations of economic growth rose +15.8 to a 5-month high of 26.3, stronger than expectations of 15.3.

Swaps are discounting a 4% chance of a +25 bp ECB rate hike at its next policy meeting on Thursday.

US Stock Movers

Chipmakers and AI-infrastructure stocks rallied sharply on Tuesday, supporting gains in the overall market.  The iShares Semiconductor ETF (SOXX) closed up more than +5%.  Sandisk (SNDK) closed up more than +14% to lead gainers in the S&P 500, and Teradyne (TER), Western Digital (WDC), and Micron Technology (MU) closed up more than +12%.  Also, Seagate Technology Holdings Plc (STX) closed up more than +11%, and Intel (INTC) closed up more than +9%.  In addition, Applied Materials (AMAT), Advanced Micro Devices (AMD) and ARM Holdings Plc (ARM) closed up more than +7%, and Marvell Technology (MRVL) closed up more than +6%.  Finally, Lam Research (LRCX) and KLA Corp (KLAC) closed up more than +5%, and ASML Holding NV (ASML), Microchip Technology (MCHP), and Texas Instruments (TXN) closed up more than +3%. 

Cryptocurrency-exposed stocks moved higher on Tuesday as Bitcoin (^BTCUSD) rose more than +1% to a 5-week high.  Coinbase Global (COIN) closed up more than +9%, and Circle Internet Group (CRCL) and Riot Platforms (RIOT) closed up more than +8%.  Also, Galaxy Digital Holdings (GLXY) closed up more than +7%, and Strategy (MSTR) and MARA Holdings (MARA) closed up more than +4%.

Software stocks were under pressure on Tuesday after Morgan Stanley downgraded Adobe, Intuit, and Workday.  Atlassian Corp (TEAM) closed down more than -5%, and Thomson Reuters (TRI) closed down more than -4% to lead losers in the Nasdaq 100.  Also, Workday (WDAY) closed down more than -4%, and Adobe Systems (ADBE), Datadog (DDOG), and Autodesk (ADSK) closed down more than -3%.  In addition, ServiceNow (NOW) and Salesforce (CRM) closed down more than -2%. 

Nebius Group NV (NBIS) closed up more than +18% to lead gainers in the Nasdaq 100 after Nvidia reported a 9.3% stake in the company in a 13G filing. 

Hasbro (HAS) closed up more than +8% after reporting Q2 net revenue of $1.14 billion, better than the consensus of $1.07 billion, and boosting its full-year adjusted Ebitda forecast to $1.45 billion to $1.50 billion from a previous forecast of $1.40 billion to $1.45 billion, stronger than the consensus of $1.45 billion.

3M Co (MMM) closed up more than +7% to lead gainers in the Dow Jones Industrials after reporting Q1 adjusted EPS of $2.40, stronger than the consensus of $2.25, and raising its full-year adjusted EPS forecast to $8.80 to $8.95 from a previous forecast of $8.50 to $8.70. 

Robinhood Markets (HOOD) closed up more than +7% after Bernstein and Piper Sandler said the company’s revenue from prediction markets is set to overshadow that from cryptocurrency trading as soon as Q2.

General Motors (GM) closed up more than +5% after reporting Q2 net sales of $48.03 billion, stronger than the consensus of $46.61 billion, and raising its full-year adjusted EPS forecast to $12 to $14 from a previous estimate of $11.50 to $13.50, the midpoint above the consensus of $12.81. 

Ralph Lauren (RL) closed up more than +2% after Raymond James upgraded the stock to outperform from market perform with a price target of $410.

Danaher (DHR) closed down more than -10% to lead losers in the S&P 500 after forecasting Q3 non-GAAP core revenue growth of 2.0% to 3.0%, weaker than the consensus of 3.61%. 

MSCI Inc (MSCI) closed down more than -10% after reporting Q2 adjusted EPS of $4.94, below the consensus of $4.99, and boosting its full-year operating expenses estimate to $1.54 billion to $1.58 billion from a previous estimate of $1.49 billion to $1.53 billion.

Agios Pharmaceuticals (AGIO) closed down more than -6% after announcing it will not advance the development of tebapivat for sickle cell disease following Phase 2 trial results that failed to establish a differentiated profile versus placebo.

Halliburton (HAL) closed down more than -5% after reporting Q2 adjusted operating income of $683 million, weaker than the consensus of $688.7 million. 

Equifax (EFX) closed down more than -3% after lowering the top end of its full-year adjusted EPS forecast to $8.39 to $8.69 from $8.34 to $8.74. 

Earnings Reports(7/22/2026)

Alphabet Inc (GOOGL), AT&T Inc (T), AvalonBay Communities Inc (AVB), CME Group Inc (CME), Crown Castle Inc (CCI), CSX Corp (CSX), EastGroup Properties Inc (EGP), Equity LifeStyle Properties Inc (ELS), Equity Residential (EQR), First American Financial Corp (FAF), First Industrial Realty Trust (FR), GE Vernova Inc (GEV), Globe Life Inc (GL), Graco Inc (GGG), International Business Machine (IBM), Iridium Communications Inc (IRDM), Kinder Morgan Inc (KMI), Knight-Swift Transportation Ho (KNX), Las Vegas Sands Corp (LVS), Medpace Holdings Inc (MEDP), Molina Healthcare Inc (MOH), Moody's Corp (MCO), Northern Trust Corp (NTRS), Otis Worldwide Corp (OTIS), Packaging Corp of America (PKG), Philip Morris International Inc (PM), Pinnacle Financial Partners In (PNFP), PulteGroup Inc (PHM), QuantumScape Corp (QS), Raymond James Financial Inc (RJF), Reliance Inc (RS), RenaissanceRe Holdings Ltd (RNR), RLI Corp (RLI), Rollins Inc (ROL), RPM International Inc (RPM), SEI Investments Co (SEIC), ServiceNow Inc (NOW), Sonoco Products Co (SON), Southwest Airlines Co (LUV), Stifel Financial Corp (SF), TE Connectivity PLC (TEL), Teledyne Technologies Inc (TDY), Tesla Inc (TSLA), Texas Instruments Inc (TXN), Travel + Leisure Co (TNL), Westinghouse Air Brake Technol (WAB), WEX Inc (WEX), Wyndham Hotels & Resorts Inc (WH).