On Tuesday, the S&P 500 Index closed up 0.89%, the Dow Jones Industrial Average increased by 0.74%, and the Nasdaq 100 Index rose by 1.93%. Significant contributions to this rally came from chipmakers and AI-infrastructure stocks, rebounding ahead of major technology earnings reports, including Alphabet and Tesla, set for Wednesday. Notably, 91% of S&P 500 companies that have released Q2 earnings thus far have surpassed expectations.
Tensions in the Middle East are influencing market dynamics, with WTI crude oil prices climbing over 2% to a five-week high, amid ongoing US-Iran strikes, which have led to increased inflation expectations. The 10-year T-note yield reached a two-month high of 4.64%. In the EU, the German ZEW survey expectations rose to a five-month peak of 26.3, exceeding forecasts.
Among individual stocks, Sandisk surged over 14% following strong results, while General Motors reported Q2 net sales of $48.03 billion, outperforming expectations. Conversely, software stocks such as Adobe and Intuit declined after a downgrade by Morgan Stanley, further impacting the market. Critical earnings reports from various major companies are pending this week, with analysts forecasting a potential 23% increase in Q2 earnings.
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