The S&P 500 Index ($SPX) (SPY) rose 0.40% today, the Dow Jones Industrial Average ($DOWI) (DIA) climbed 0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) advanced 0.94%. E‑mini S&P futures (ESU26) gained 0.35%, while September E‑mini Nasdaq futures (NQU26) rose 0.94%.
Equity markets are advancing as weak crude oil prices exert downward pressure on bond yields. WTI crude fell more than 3% today, easing inflation concerns and pulling the 10‑year Treasury yield down 4 basis points to 4.66%. Chipmakers and AI infrastructure stocks are also rising, rebounding from earlier weakness. Increased short covering in the semiconductor sector has lifted prices ahead of Nvidia’s earnings release later Wednesday.
U.S. June S&P Composite-20 Home Price Index increased 2.1% year‑over‑year, surpassing the 1.8% forecast and marking the largest annual rise in a year.
U.S. Treasury Secretary Scott Bessent announced Monday that the United States will launch a campaign to isolate Iran from the global economy, warning that any nation engaging in business with Iran may face sanctions. He said the focus will be on five critical sectors—digital assets, technology, gold, aviation, and shipping—and that participating countries will receive a set deadline to cease economic ties; failure to comply will trigger unilateral Treasury action.
Iran’s Supreme National Security Council secretary warned that any nation aiding or participating in the United States’ economic pressure against Iran would be considered an act of war, and that no oil would be exported from the Strait of Hormuz or elsewhere in the Persian Gulf.
President Trump stated that the U.S. naval blockade of Iranian ports is applying pressure on the country, but he has not provided a timeline for resolving the U.S.–Iran dispute. Energy Secretary Chris Wright added that the United States intends to pursue a long‑term strategy with Iran, signaling no immediate de‑escalation and potentially constraining Middle Eastern crude supplies.
October WTI crude oil prices (CLV26) fell more than 3% today to a one‑week low, following a New York Times report that the State Department is planning to return diplomats to Middle East embassies previously evacuated, indicating the Trump administration does not expect a resumption of full‑scale hostilities with Iran.
Robust Q2 earnings expectations are bolstering equity markets. The S&P 500 is projected to achieve nearly 32% earnings growth in Q2, exceeding the 23% consensus and roughly four times the historical average outside the Covid era since Q4 2013, according to Bloomberg Intelligence. AI spending is expected to drive most of this growth, with AI infrastructure stocks accounting for almost 60% of the S&P 500’s earnings‑per‑share increase. To date, 86% of the 468 S&P 500 companies reporting Q2 results have beaten estimates, per Bloomberg data.
Market participants are pricing a 40% probability of a 25‑basis‑point rate hike at the upcoming FOMC meeting on September 15‑16.
Global equity markets posted gains today. The Euro Stoxx 50 rose 0.29%, while China’s Shanghai Composite rebounded from a two‑week low to close up 0.19%. Japan’s Nikkei‑225 also recovered from a two‑week trough, gaining 0.50%.
Interest Rates
September 10‑year Treasury notes (ZNU6) rose 9 ticks today, pushing the 10‑year yield down 3.8 basis points to 4.658%. The upward movement follows a more than 3% decline in WTI crude, which has eased inflation expectations. Additional support stemmed from Monday’s CNBC report that the Treasury could deploy the General Account balance of $935 billion as of August 20 to expand buybacks of higher‑yielding, older government securities.
Supply pressure is expected to weigh on T‑note prices as the Treasury plans to auction $211 billion of T‑notes and floating‑rate notes this week, starting with a $69 billion sale of 2‑year notes today.
European government bond yields declined on Monday. The 10‑year German bund yield slipped to a one‑week low of 3.211%, down 3.3 basis points to 3.220%. The 10‑year UK gilt fell to a one‑week low of 4.992%, down 5.2 basis points to 5.005%.
Germany’s August IFO business climate index rose 2.1 points to a one‑year high of 88.8, surpassing the forecast of 87.2.
German Q2 GDP was revised up to a quarterly increase of 0.3% and an annual rise of 1.0%, compared with the prior estimates of 0.2% q/q and 0.9% y/y.
Market participants are assigning a 95% probability to a 25‑basis‑point ECB rate hike at the upcoming policy meeting on September 10.
Chipmakers and AI infrastructure stocks are rising, lifting the broader market. Marvell Technology (MRVL) jumped more than 7% to lead gains in the S&P 500 and Nasdaq 100, while Advanced Micro Devices (AMD) rose over 3%. ARM Holdings (ARM), Sandisk (SNDK), Intel (INTC), and Western Digital (WDC) each advanced more than 2%. Nvidia (NVDA) added more than 2%, leading gains in the Dow Jones Industrials, and ASML (ASML), KLA (KLAC), Lam Research (LRCX), and Qualcomm (QCOM) rose by over 1%.
Energy producers and service providers are declining today as WTI crude fell more than 3% to a one‑week low. APA Corp (APA) and Devon Energy (DVN) fell over 2%, while Chevron (CVX), ConocoPhillips (COP), Diamondback Energy (FANG), ExxonMobil (XOM), Halliburton (HAL), Marathon Petroleum (MPC), Phillips 66 (PSX), Occidental Petroleum (OXY), and Valero Energy (VLO) each slipped more than 1%.
Madison Air Solutions Corp (MAIR) surged more than 14% after announcing a private placement of roughly $2.25 billion in class A common stock.
Moderna (MRNA) rose more than 5% following Wolfe Research’s upgrade from underperform to peer perform.
Navitas Semiconductor (NVTS) gained over 3% after announcing the acquisition of Claros Inc. for approximately $233 million.
Shift4 Payments (FOUR) climbed over 3% after Wells Fargo Securities upgraded the stock from equal weight to overweight, setting a price target of $59.
Dick’s Sporting Goods (DKS) fell more than 23% after reporting Q2 net sales of $5.59 billion, below the $5.65 billion consensus, and lowered its 2027 sales outlook to $21.9‑$22.2 billion from the prior $22.1‑$22.4 billion range.
Five Below (FIVE) slipped over 1% following Loop Capital Markets’ downgrade from buy to hold, citing current valuation levels.
Dick’s Sporting Goods Inc (DKS), HEICO Corp (HEI), Intuit Inc (INTU), Semtech Corp (SMTC), and Zoom Communications Inc (ZM).
