U.S. stock benchmarks moved back to record highs following a decisive rally on Tuesday, supported by a strong wave of corporate earnings and a pullback in oil prices. The S&P 500 and the Dow Jones industrial average pushed to new peaks, though not every market reaction was straightforward.
One notable example was SpaceX. The company reported its first quarterly earnings, beating revenue expectations, but the stock pulled back after the release. Investor debate focused on the company’s growing AI-related capital expenditure and the resulting cash burn. Market participants also flagged the potential for downward pressure on the stock if insider and early-investor share sales increase as post-IPO lockup periods lapse.
Chipmaker AMD experienced weakness after its own update, slipping as the market weighed already elevated valuation multiples against high expectations. By contrast, Palantir posted an impressive quarter and saw its shares surge nearly 30% following the results. Industrial heavyweight Caterpillar also rose on better-than-expected earnings.
Market breadth and notable moves
- Equity indices: S&P 500 and Dow moved to record highs after Tuesday’s strong session.
- Individual movers: Palantir jumped approximately 29.45% after its results; SpaceX shares retreated despite a revenue beat; AMD declined roughly 7% ahead of the next trading session despite beating revenue forecasts; Caterpillar increased about 5.6% on earnings.
- Selected tickers and moves cited in-session: US500 +1.79%, DJI +1.71%, CAT +5.6%, AMD +7.00%, PLTR +29.45%, SPCX +9.43%.
Energy, geopolitics and yields
Brent crude continued its recent weakness, falling another 5% to dip below $80 per barrel in an earlier session. Prices climbed back above that level Wednesday after Houthi rebels aligned with Iran said they attacked a Saudi oil tanker in the Red Sea. The attack added immediate supply-risk headlines to the market, even as diplomatic signals suggested the prospect of de-escalation.
U.S. officials indicated mediation between the United States and Iran over reopening the Strait of Hormuz could make progress this week, although Tehran denied direct talks with Washington. Tehran did say it was continuing talks with Oman on transit through the strait. Qatari officials reported that intermediaries were making headway in efforts to end the war. Separately, traffic through the strait is described as busier than it has been for many weeks.
The recent decline in oil prices helped take pressure off Treasury yields. That dynamic sits alongside comments from Kansas City Fed chief Jeffrey Schmid, who said the Federal Reserve would likely need to tighten policy further to return inflation to the 2% target.
Labor, borrowing and fiscal developments
Labour-market data released this week have been mixed. June job openings declined while hiring rose. Private sector payrolls for July were scheduled for release later in the day, offering another labour snapshot for markets to consider.
The bond market faces an additional input today in the form of quarterly refunding details, which will show how higher borrowing totals are being allocated across the yield curve. Separately, recent reporting indicated the U.S. government had paid out as much as $100 billion in tariff rebates after the Supreme Court struck down many duties earlier in the year - a development described as delivering a fresh blow to the U.S. fiscal situation.
Currency intervention and the yen
In currency markets, Treasury Secretary Scott Bessent said he would do "whatever it takes" to support Japan in defence of the yen, and urged the Federal Reserve to increase the size of the repo facility used in last week’s joint intervention. The yen appeared to have stabilised at stronger levels following those actions.
Chart of the day - AMD valuation dynamics
AMD’s shares weakened about 7% ahead of Thursday’s bell, despite the company beating quarterly revenue forecasts. The stock has climbed approximately 140% so far this year amid elevated investor enthusiasm for AI-related semiconductor demand. With an $850 billion market capitalisation, AMD’s price-to-forward-earnings multiple sits near 43 times, materially above the 25 times average for the U.S. chip sector and more than double the multiple of another market leader in the space.
Events to watch today
- U.S. July ADP payrolls (8:15 a.m. EDT)
- ISM non-manufacturing PMI for July (10 a.m. EDT)
- Corporate earnings: Eli Lilly, SanDisk, Western Digital, Disney, Uber
- Speeches: Fed Governor Lisa Cook and San Francisco Fed President Mary Daly
Markets will digest these data alongside the latest refunding announcement and continuing earnings reports as investors assess the balance between strong corporate results and macroeconomic signals on inflation, borrowing and geopolitical risk.