Stocks Supported by Easing Middle East Tensions

The S&P 500 Index ($SPX) (SPY) today is up +0.84%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +1.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.47%.  September E-mini S&P futures (ESU26) are up +0.90%, and September E-mini Nasdaq futures (NQU26) are up +0.50%.

Stock indices are moving higher today, with the S&P 500 posting a 2-week high and the Dow Jones Industrials posting a 3.5-week high. Stocks are gaining as the latest signs of easing tensions in the Middle East push crude oil prices sharply lower and allay fears about faster inflation.  The slump in crude oil also knocked bond yields lower and supported stocks. The 10-year T-note yield is down -5 bp to 4.68%. 

On the negative side, chipmakers and AI-infrastructure stocks are weighed down on negative carryover from a -5% decline in South Korea’s Kospi Index on Monday after South Korean chipmakers tumbled.   

Dovish comments today from New York Fed President John Williams were supportive for stocks and bonds, as he said interest rates remain well positioned and inflation should ease during the second half of the year.

Sep WTI crude oil prices (CLU26) are down sharply by -6% today on hopes that the Strait of Hormuz could soon be reopened as geopolitical tensions ease.  President Trump called off a planned attack on Iran, and Iran suggested negotiations to get more ships moving through the Strait of Hormuz were making progress. Saudi Arabia's Crown Prince Mohammed bin Salman held a call with President Trump over the weekend and "stressed the need to prioritize dialogue to reduce escalation and the importance of making every possible effort to achieve calm."

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 307 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. 

The markets are discounting a 63% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.

Overseas stock markets are mixed today.  The Euro Stoxx 50 climbed to a 4-week high and is up +0.75%. China's Shanghai Composite closed down -0.59%.  Japan's Nikkei-225 Stock Average closed down -0.94%.

Interest Rates

September 10-year T-notes (ZNU6) today are up +14 ticks.  The 10-year T-note yield is down -4.7 bp to 4.688%.  Sep T-notes are climbing today amid today’s slump of more than -6% in WTI crude oil prices, suppressing inflation expectations.  T-notes also gained support today after the US Treasury said it will allow Japan to use the Foreign and International Monetary Authorities Repo Facility, which will allow the BOJ to use its Treasury holdings as collateral to access dollars, rather than sell the bonds on the open market to raise cash for yen intervention.

European government bond yields are moving lower today.  The 10-year German bund yield is down -6.7 bp to 3.139%.  The 10-year UK gilt yield is down -10.1 bp to 4.949%.

The Eurozone July S&P manufacturing PMI was revised downward by -0.1 to 51.9 from the originally reported 52.0. 

German June retail sales fell -1.1% m/m, weaker than expectations of -0.3% m/m and the biggest decline in 13 months.

The markets are discounting an 87% chance of a +25 bp ECB rate hike at their next policy meeting on September 10.

US Stock Movers

Airline stocks and cruise line operators are moving higher with today’s -6% plunge in crude oil prices. American Airlines Group (AAL), United Airlines Holdings (UAL), and Alaska Air Group (ALK) are up more than +5%.  Also, Norwegian Cruise Line Holdings (NCLH) is up more than +4%, and Delta Air Lines (DAL), Southwest Airlines (LUV), Carnival (CCL), and Royal Caribbean Cruises (RCL) are up more than +3%.

Software stocks are climbing today to provide support to the overall market.  Atlassian Corp (TEAM) and ServiceNow (NOW) are up more than +6%, and Microsoft (MSFT) is up more than +5% to lead gainers in the Dow Jones Industrials. Also, Adobe Systems (ADBE), Oracle (ORCL), Salesforce (CRM), and Workday (WDAY) are up more than +4%, and Autodesk (ADSK) and Intuit (INTU) are up more than +3%. In addition, Datadog (DDOG) and Palantir Technologies (PLTR) are up more than +2%. 

Chipmakers and AI-infrastructure stocks are under pressure today, weighing on the overall market. The Philadelphia Semiconductor Index ($SOX) is down more than -3%.  Seagate Technology Holdings Plc (STX) is down more than -6%, and Western Digital (WDC) and ARM Holdings (ARM) are down more than -5%.  Also, Lam Research (LRCX), Micron Technology (MU), Marvel Technology (MRVL), and NXP Semiconductors (NXPI) are down more than -4%, and Analog Devices (ADI), Broadcom (AVGO), KLA Corp (KLAC), and Texas Instruments (TXN) are down more than -3%.  In addition, Advanced Micro Devices (AMD), Applied Materials (AMAT), and Qualcomm (QCOM) are down more than -2%.

Energy producers and service providers are falling today, with WTI crude oil prices down more than -6%. Occidental Petroleum (OXY) is down more than -3%, and APA Corp (APA), Devon Energy (DVN), Diamondback Energy (FANG), Haliburton (HAL), SLB Ltd (SLB), ConocoPhillips (COP), and Valero Energy (VLO) are down more than -2%.  Also, Baker Hughes (BKR), Phillips 66 (PSX), and Chevron (CVX) are down more than -1%.

Atkore (ATKR) is up more than +28% after Prysmian agreed to acquire the company for $3.8 billion, or about $95 a share. 

CNH Industrial (CNH) is up more than +16% after boosting its full-year adjusted EPS forecast to 41 cents to 46 cents from a previous forecast of 35 cents to 45 cents, above the consensus of 41 cents. 

Ferguson Enterprises (FERG) is up more than +9% after S&P Dow Jones Indices announced the stock will replace Electronic Arts in the S&P 500 before the opening of trading on Wednesday, August 5. 

Supernus Pharmaceuticals (SUPN) is up more than +7% after agreeing to combine with Indivior Pharmaceuticals in a tax-free all-stock merger of equals. 

GameStop (GME) is down more than -11% after announcing plans to exchange about $1.4 billion in outstanding convertible senior notes for shares of its common stock with certain existing shareholders.

Krystal Biotech (KRYS) is down more than -7% after reporting Q2 net product revenues of $119.2 million, weaker than the consensus of $122.3 million.

Circle Internet Group (CRCL) is down more than -6% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $38. 

Marriott International (MAR) is down more than -5% after reporting Q2 revenue of $7.07 billion, weaker than the consensus of $7.22 billion.

eBay (EBAY) is down more than -2% after Wells Fargo Securities downgraded the stock to underweight from equal weight with a price target of $92.

Earnings Reports (8/3/2026)

Alexandria Real Estate Equities (ARE), Berkshire Hathaway Inc (BRK/A), Clorox Co/The (CLX), Diamondback Energy Inc (FANG), EchoStar Corp (ECHO), Loews Corp (L), Marriott International Inc/MD (MAR), ON Semiconductor Corp (ON), ONEOK Inc (OKE), Palantir Technologies Inc (PLTR), SBA Communications Corp (SBAC), TKO Group Holdings Inc (TKO), Tyson Foods Inc (TSN), Vertex Pharmaceuticals Inc (VRTX), Williams Cos Inc/The (WMB).