The S&P 500 Index is up 0.46% and the Nasdaq 100 Index has risen 0.86% as of today. Meanwhile, the Dow Jones Industrial Average has decreased by 0.14%. Key factors contributing to this movement include a rebound in chipmakers and AI-infrastructure stocks ahead of major technology earnings this week, starting with Alphabet on Wednesday. September E-mini S&P futures are up 0.43%, while September E-mini Nasdaq futures have risen by 0.78%.
Geopolitical tensions are escalating, as the U.S. has conducted airstrikes against Iran for the ninth consecutive day in an attempt to secure the Strait of Hormuz. As retaliation, Iran has launched drones and missiles at U.S. military bases in Kuwait, Jordan, Bahrain, and Iraq. The U.S. plans to send additional warplanes, including F-35s and F-16s, to the Middle East. This situation has impacted crude oil prices, which initially rose to a five-week high but later fell as Iran expressed a willingness to engage in diplomatic talks.
Analysts predict a strong Q2 earnings season, forecasting a 23% increase, similar to Q1’s growth of 30%. AI spending is expected to be a primary driver, particularly contributing to nearly 60% of the S&P 500’s earnings-per-share growth in Q2. Markets are currently pricing in a low chance (14%) of a 25 basis point rate hike during the next Federal Open Market Committee meeting scheduled for July 28-29.
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