Chipmaker Rally Fuels Broad Market Gains

The S&P 500 Index ($SPX) (SPY) rose 0.17%, while the Dow Jones Industrial Average ($DOWI) (DIA) slipped 0.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) gained 0.51%. September E-mini S&P futures (ESU26) added 0.20%, and September E-mini Nasdaq futures (NQU26) increased 0.59%.

Most equity indexes edged higher today as chipmakers rebounded. Short covering in semiconductor and AI‑infrastructure stocks preceded earnings reports from mega‑cap tech firms, starting with Alphabet on Wednesday. Support also came from lower crude oil prices, which reflected ongoing diplomatic efforts to de‑escalate the US‑Iran tension. However, weakness in software stocks capped the market’s upside.

Geopolitical tensions persisted after the United States carried out a ninth consecutive day of airstrikes on Iran, aiming to reopen the Strait of Hormuz by striking military sites and communication facilities. Iran responded by launching drones and missiles at U.S. bases in Kuwait, Jordan, Bahrain, and Iraq, and by targeting tankers moving through the strait. The New York Times reported that Washington is deploying additional warplanes to the region, including F‑35 and F‑16 fighters, suggesting a possible expansion of military operations in the days ahead.

Escalating Middle East conflict lent support to crude oil prices after Houthi rebels announced a planned maritime blockade of Saudi Arabia, claiming retaliation for the kingdom’s alleged siege on Yemen’s capital—a move that could threaten Saudi oil exports via the Red Sea.

Despite the early rally, WTI crude oil (CLQ26) retreated from its peak after Iran signaled it would not abandon diplomacy and noted that Qatar and Pakistan had offered to mediate, proposing a ten‑day ceasefire between the U.S. and Iran. Prices had earlier risen to a five‑week high as fighting between the two nations choked traffic through the Strait of Hormuz, tightening global oil supplies.

A robust Q2 earnings outlook continues to buoy equity markets. Bloomberg Intelligence forecasts a 23% increase in second‑quarter profits, approaching the 30% surge seen in Q1 and far surpassing the 12% analysts had initially expected. AI‑related spending is projected to drive most of this growth, with AI‑infrastructure firms expected to contribute roughly 60% of the S&P 500’s earnings‑per‑share expansion in Q2.

Markets are pricing in a 14% probability of a 25‑basis‑point rate increase at the forthcoming FOMC meeting on July 28‑29.

International stock markets showed mixed results. The Euro Stoxx 50 edged down 0.03%, while China’s Shanghai Composite rebounded from a 10.5‑month low to close up 0.85%. Japan’s Nikkei‑225 did not trade, as local markets were closed for Marine Day.

Interest Rates

September 10‑year T‑notes (ZNU6) fell nine ticks, pushing the 10‑year Treasury yield up 2.8 basis points to 4.576%. The notes faced pressure as the equity rally diminished safe‑haven demand, and the WTI crude rally to a five‑week high lifted inflation expectations, weighing on Treasury prices.

European government bond yields rose. The 10‑year German bund yield increased 1.2 basis points to 3.138%, and the 10‑year UK gilt yield climbed 4.7 basis points to 4.997%.

German producer price index for June declined 0.3% month‑over‑month but rose 1.8% year‑over‑year, in line with forecasts.

Swaps indicate only a 3% chance of a 25‑basis‑point ECB rate increase at its upcoming policy meeting on Thursday.

US Stock Movers

Semiconductor and AI‑infrastructure shares led the advance, bolstering the broader market. The iShares Semiconductor ETF (SOXX) climbed more than 1%. Sandisk (SNDK) and Western Digital (WDC) each gained over 5%, while Marvell Technology (MRVL) added more than 4%. Intel (INTC) and Advanced Micro Devices (AMD) rose above 3%, and Seagate Technology (STX), Micron Technology (MU), and Broadcom (AVGO) increased by more than 2%.

Software shares retreated, limiting the market’s gains. Oracle (ORCL) fell more than 3%, and Adobe Systems (ADBE) dropped over 2%. ServiceNow (NOW), Intuit (INTU), Autodesk (ADSK), International Business Machines (IBM), and Thomson Reuters (TRI) each declined by more than 1%.

Iren Ltd (IREN) surged over 14% after lifting its year‑end AI‑cloud revenue forecast to above $4 billion from the prior $3.7 billion estimate.

Lumentum Holdings (LITE) jumped more than 7%, topping the S&P 500 and Nasdaq 100 gainers after Barclays upgraded the stock to overweight from equal weight, assigning a $1,000 price target.

Teradyne (TER) advanced over 5% following UBS’s price‑target increase to $500 from $440.

LXP Industrial Trust (LXP) rose 4% after Brookfield Asset Management and CPP Investments agreed to acquire the company for $5.2 billion, roughly $61.20 per share.

Global Payments (GPN) gained more than 3% after Morgan Stanley upgraded the stock to overweight from equal weight, setting a $100 price target.

Alphabet (GOOGL) added more than 2%, leading Dow Jones Industrials gainers after The Information reported the firm is designing a new server chip to optimize its Gemini AI model.

Nebius Group NV (NBIS) rose over 2% after Freedom Capital Markets upgraded the rating to buy from hold, with a $200 price target.

Domino’s Pizza (DPZ) increased more than 2% after reporting Q2 revenue of $1.19 billion, surpassing the consensus estimate of $1.18 billion.

Urban Outfitters (URBN) climbed over 2% after Goldman Sachs upgraded the rating to buy from neutral, citing a $93 price target.

Penguin Solutions (PENG) fell more than 11% after Barclays downgraded the stock to underweight from equal weight, lowering the price target to $40.

Truist Financial (TFC) slipped more than 2% after JPMorgan Chase downgraded the rating to underweight from neutral, setting a $53 price target.

Earnings Reports(7/20/2026)

AGNC Investment Corp (AGNC), BOK Financial Corp (BOKF), Crown Holdings Inc (CCK), Domino’s Pizza Inc (DPZ), Steel Dynamics Inc (STLD), W R Berkley Corp (WRB), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).

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