Major US equity indices posted modest gains on Wednesday, with the S&P 500 Index ($SPX) (SPY) rising by +0.04%, the Dow Jones Industrial Average ($DOWI) (DIA) climbing +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) advancing +0.01%. In the futures market, E-mini S&P futures (ESU26) were up +0.03%, while September E-mini Nasdaq futures (NQU26) gained +0.01%.
Stocks climbed slightly higher on Wednesday as investors digested a mixed batch of US economic data. While July capital goods new orders (nondefense ex-aircraft and parts), a key proxy for business capital spending, grew slower than anticipated, July personal spending and personal income both exceeded expectations. Additionally, inflation concerns eased after the July core PCE price index—the Federal Reserve’s preferred inflation gauge—aligned with market forecasts.
Corporate earnings results were mixed on Wednesday. Intuit (INTU) fell more than -2% after the company issued a full-year outlook for both adjusted earnings and revenue that fell short of expectations. In contrast, J M Smucker (SJM) surged more than +5% following stronger-than-expected first-quarter adjusted earnings per share and an upward revision to its 2027 adjusted EPS forecast.
According to the Mortgage Bankers Association (MBA), US mortgage applications declined by -1.0% during the week ended August 21. The purchase mortgage sub-index fell -0.3%, while the refinancing mortgage sub-index dropped -2.0%. Meanwhile, the average interest rate on a 30-year fixed-rate mortgage ticked up by 1 basis point to 6.78%, up from 6.77% the previous week.
In July, US personal spending increased by +0.2% month-over-month, outperforming the consensus estimate of +0.1%. Concurrently, personal income rose by +0.4% m/m, exceeding the expected +0.2% increase.
The July core PCE price index, which is closely watched by the Federal Reserve as a primary inflation indicator, increased by +0.2% month-over-month and +3.3% year-over-year, aligning precisely with market expectations.
US July capital goods new orders (nondefense ex-aircraft and parts), a key proxy for capital investment, grew by +0.2% month-over-month, falling short of the +0.7% consensus. However, June’s figures were revised upward to +1.7% m/m from the previously reported +1.2% m/m.
The US second-quarter Gross Domestic Product (GDP) remained unrevised at an annualized rate of 1.5%. However, Q2 personal consumption was adjusted upward to 3.4% from 3.2%, and the Q2 core PCE price index was revised higher to 3.6% q/q from 3.4% q/q.
Markets are closely watching for Nvidia’s earnings release after the market close today. Nvidia’s results are widely viewed as a key barometer for artificial intelligence (AI) spending, and will help determine whether hyperscalers are continuing to accelerate AI investments or adopting a more disciplined approach. According to Bloomberg data, analysts project Nvidia’s second-quarter revenue will nearly double from the previous year, marking the fastest growth pace in two years. Investors will also be listening closely to comments from CEO Jensen Huang regarding capital expenditure by major clients, future demand trends, and a series of new financing deals involving the chip giant.
October WTI crude oil prices (CLV26) fell by more than -1% on Wednesday, reaching a one-and-a-half-week low. The decline followed a report from the Oman News Agency indicating that Iranian Foreign Minister Abbas Araghchi and his Omani counterpart Badr Albusaidi discussed a “temporary joint maritime corridor” to facilitate transit through the Strait of Hormuz. Crude prices have dropped over -8% this week, driven by signs of easing geopolitical tensions in the Middle East and the partial resumption of crude flows through the strategic waterway. Additionally, a New York Times report on Tuesday stated that the US State Department is preparing to return diplomats to embassies in the Middle East that were evacuated during the conflict with Iran, suggesting the administration does not anticipate a return to full-scale hostilities.
The outlook for robust second-quarter earnings continues to serve as a bullish catalyst for equities. According to Bloomberg Intelligence, S&P 500 earnings are on track to grow by nearly 32% in Q2, significantly outpacing the initial projection of +23% and representing almost four times the average earnings growth rate since Q4 2013 (excluding the Covid period). AI spending is expected to drive the majority of these gains, with AI infrastructure stocks projected to contribute nearly 60% of the S&P 500’s earnings-per-share growth. So far, corporate results have been strong, with 86% of the 469 S&P 500 companies that have reported Q2 earnings beating analyst estimates.
Market participants are currently pricing in a 40% probability of a 25 basis point interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting on September 15-16.
Global equity markets finished higher on Wednesday. The Euro Stoxx 50 index gained +0.44%, China’s Shanghai Composite rose by +0.59%, and Japan’s Nikkei-225 Stock Average closed up +0.62%.
Interest Rates
September 10-year Treasury notes (ZNU6) traded lower by -4 ticks on Wednesday. The 10-year T-note yield rose by +2.8 basis points to 4.656%. Treasury notes faced pressure from the stronger-than-expected US economic data on July personal spending and income. Furthermore, the upward revision to the Q2 core PCE price index exerted additional downward pressure on T-notes. Supply concerns also weighed on the market, as the US Treasury scheduled auctions of $28 billion in 2-year floating-rate notes and $70 billion in 5-year T-notes later in the day.
On the positive side for fixed income, the July core PCE price index advanced in line with expectations, helping to alleviate inflation fears. Additionally, a decline in WTI crude oil prices of more than -1% to a 1.5-week low reduced inflation expectations, providing some support for T-notes.
European government bond yields trended higher on Wednesday. The 10-year German bund yield rebounded from a 1.5-week low of 3.185%, rising by +1.1 basis points to 3.212%. Similarly, the 10-year UK gilt yield climbed +0.8 basis points to 4.996% after recovering from a 1.5-week low of 4.978%.
European Central Bank (ECB) Executive Board member Isabel Schnabel stated, “At the current policy rate, inflation is unlikely to return to target over the medium term, and therefore further tightening will be necessary.”
Markets are currently pricing in a 97% probability of a 25 basis point rate hike by the ECB at its next policy meeting on September 10.
US Stock Movers
Summit Therapeutics (SMMT) surged more than +8% after reporting positive results from a late-stage trial of its ivonescimab treatment for biliary tract cancer, which significantly outperformed AstraZeneca’s durvalumab in combination with chemotherapy.
Semtech (SMTC) jumped more than +8% after reporting second-quarter adjusted earnings per share of 71 cents, well above the 61-cent consensus. The company also issued a third-quarter adjusted EPS forecast of $1.02 to $1.08, significantly stronger than the expected 73 cents.
J M Smucker (SJM) led gainers in the S&P 500, rising more than +5% after reporting first-quarter adjusted EPS of $3.24, which handily beat the $2.22 consensus. The company also raised its 2027 adjusted EPS outlook to a range of $10.50 to $11.00, up from the previous forecast of $9.75 to $10.25 and stronger than the consensus estimate of $10.05.
Datadog (DDOG) rose more than +4% to lead the Nasdaq 100 index’s gainers after The Information reported that Palo Alto Networks CEO Arora had explored acquiring the company.
Photronics (PLAB) gained more than +4% after reporting third-quarter adjusted EPS of 50 cents, beating the consensus estimate of 40 cents.
Oracle (ORCL) rose more than +3% after Citigroup initiated a positive catalyst watch on the stock, setting a price target of $330.
Spyre Therapeutics (SYRE) fell more than -13% after announcing that a mid-stage trial of its experimental rheumatoid arthritis drug failed to meet the company’s internal performance benchmarks.
Kohl’s (KSS) declined more than -7% after reporting second-quarter net sales of $3.32 billion, slightly below the consensus estimate of $3.34 billion.
Zoom Communications (ZM) dropped more than -6% after forecasting third-quarter adjusted EPS in the range of $1.46 to $1.48, below the consensus estimate of $1.50.
Intuit (INTU) fell more than -4% to lead losers in the Nasdaq 100 after forecasting 2027 adjusted EPS between $22.88 and $23.12, well below the consensus of $27.27. The company also projected 2027 revenue of $23.28 billion to $23.51 billion, falling short of the $23.82 billion consensus.
GoDaddy (GDDY) declined more than -4% after Wells Fargo Securities downgraded the stock to underweight from equal weight, maintaining a price target of $76.
Boston Scientific (BSX) fell more than -4% after disclosing the identification of an ongoing, globally disruptive cybersecurity incident affecting certain of its information technology systems.
nCino (NCNO) fell more than -2% after forecasting third-quarter subscription revenue between $143.3 million and $145.3 million, with the midpoint of the range falling below the consensus estimate of $144.6 million.
Earnings Reports (8/26/2026)
Companies reporting earnings on August 26, 2026, include Agilent Technologies (A), Bath & Body Works (BBWI), CrowdStrike Holdings (CRWD), Donaldson (DCI), Dycom Industries (DY), Everpure (P), HP Inc (HPQ), J M Smucker (SJM), Nutanix (NTNX), Nvidia (NVDA), Okta (OKTA), Salesforce (CRM), Synopsys (SNPS), Veeva Systems (VEEV), and Williams-Sonoma (WSM).
