Stocks barely budged Wednesday as Wall Street took a cautious stance ahead of this week's key events, namely, Nvidia (NVDA) earnings this evening and Federal Reserve Chair Kevin Warsh's keynote speech at Jackson Hole on Friday.

Market participants also sifted through a busy economic calendar, which included a hotter-than-expected inflation report.

Ahead of the open, the Bureau of Economic Analysis (BEA) said the Personal Consumption Expenditures Price Index (PCE) — the Fed's preferred measure of inflation — rose 0.2% from June to July, and was up 3.7% from the year-ago period. Economists expected the monthly and yearly figures to arrive at 0.1% and 3.6%, respectively.

Core PCE, which excludes volatile food and energy prices, was up 0.2% month over month and 3.3% year over year, matching economists' forecasts.

"With markets continuing to be sensitive to any data that could increase the odds of rate hikes, today's mild upside inflation surprise and relative economic strength weren't necessarily what investors — or the Fed — wanted to see," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

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The data did little to shift the needle on expectations for a rate hike at the Fed's September meeting. According to CME Group FedWatch, futures traders are pricing in a 60% chance the central bank keeps the federal funds rate unchanged next month — roughly the same as yesterday.

But Zentner says "if subsequent data point in the same direction, the Fed may feel more pressure to move off the sidelines."

Short-term Treasury yields ticked higher after today's inflation data while equity benchmarks slipped. At the close, the blue-chip Dow Jones Industrial Average was down 0.2% at 53,463, the broader S&P 500 was off 0.02% at 7,675, and the tech-heavy Nasdaq Composite was 0.08% lower at 26,130.

Nike hits a 12-year low after downgrade

Nike (NKE) was the worst Dow Jones stock today — sinking 2.3% and hitting a 12-year intraday low of $38.41 along the way — after Truist Securities analyst Joseph Civello downgraded the athletic apparel and footwear retailer to Hold from Buy. He also lowered his price target to $42 from $47.

The downgrade comes after Dick's Sporting Goods (DKS, +4.3%) cut its full-year guidance Wednesday on weakness in its Foot Locker chain, sending shares of the consumer discretionary stock down more than 30%. This, says Civello, "signals incremental murkiness around NKE's turnaround progress."

Civello also downgraded Dick's to Hold and slashed his price target to $135 from $270, saying the athletic retail chain "appears increasingly exposed to Nike with limited visibility into the product improvements needed for the brand's turnaround." The 2025 acquisition of Foot Locker increased Nike's sales penetration at DKS to 35%-40% from 25%.

Nvidia drops ahead of earnings

Nvidia was another Dow stock that closed in negative territory today, falling 1.6%, ahead of the artificial intelligence (AI) bellwether's critical after-the-close earnings report.

Wall Street is expecting another beat-and-raise quarter from the chipmaker, but the real uncertainty rests in the forward guidance and what it means for AI demand, as well as the stock's reaction and how that impacts the broader market.

You can follow along with all the latest news and commentary on Nvidia earnings on our live blog.

Nvidia earnings and Jackson Hole

Brandon Zureick, chief economist and senior managing director at Johnson Investment Counsel, says the timing of Nvidia's earnings event is notable considering it comes ahead of Chair Warsh's first keynote speech at the Jackson Hole Economic Symposium this Friday.

"The current bull market continues to be driven by the artificial intelligence investment theme, and Warsh's commentary could influence investor sentiment," Zureick explains.

The Fed chair has been deliberately vague ahead of the event and "higher long-term interest rates represent a potential headwind for the artificial intelligence trade," says Zureick.

Following today's sticky PCE data, Wall Street will be looking to Warsh for more clarity on inflation and interest rates.

Meta agrees to $18 billion landmark settlement

While Nvidia and Warsh are top of mind this week, Meta Platforms (META, +1.1%) made headlines after the company agreed to an $18 billion settlement with 48 states, the District of Columbia and several U.S. territories to end a landmark case over social media's impact on children.

Meta will also implement changes at Facebook and Instagram, including setting a two-hour time limit on the apps for users under the age of 18 and launching "night mode" and "school mode."

Under the terms of the agreement, the social media platform will only pay out 70% of the settlement unless TikTok and Alphabet's (GOOGL, -1.4%) YouTube agree to pay a financial penalty, and the two platforms, along with Snapchat parent Snap (SNAP, -8.5%), agree to implement new safety measures.

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All three main equity indexes opened higher and held modest gains through Tuesday's trading session, as market participants looked beyond ratcheting geopolitical tension to focus on earnings and guidance from the world's most important publicly traded company.

President Donald Trump and Prime Minister Mark Carney are raising tariffs in North America, while President Xi Jinping says China is prepared to counter U.S. economic moves against Iran.

Investors, traders and speculators took comfort in a New York Times report that the State Department is preparing to send diplomats back to Middle East embassies evacuated because of the war, "suggesting that the Trump administration does not anticipate a return to all-out hostilities."

Front-month West Texas Intermediate crude oil fell more than 4% to $81.54 per barrel. The yield on the 2-year Treasury was down 5.3 basis points to 4.183% from 4.236% on Monday. The 10-year Treasury yield (-7.5 bps, 4.629%) and the 30-year Treasury yield (-6.7 bps, 5.164%) inched back, too.

Nvidia (NVDA, +2.2%) ended a seven-session losing streak and was among the top three Dow Jones stocks a day ahead of the scheduled release of its fiscal 2027 second-quarter results after Wednesday's close.

Semiconductor stocks bounced back after falling sharply on Monday, with Marvell Technology (MRVL, +4.8%) rallying ahead of its turn on the earnings calendar after Thursday's closing bell.

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"Here's the setup nobody's saying out loud," Siebert Chief Investment Officer Mark Malek observes. "Nvidia has beaten every quarter for two straight years, they're about to double revenue year-over-year and the stock is flat since the last earnings call. Flat! That tells you the market has already priced in perfection and moved on to the next question."

As Malek explains, what matters is management's guidance for Nvidia's fiscal third quarter. "Consensus is around $104 billion, but the buyside is whispering higher," the CIO says, "and that gap is where the stock lives or dies."

Malek is looking for CEO Jensen Huang "to hand the market a new story: Rubin ramping ahead of schedule, China coming back, something. Otherwise he delivers the greatest quarter in the history of the semiconductor industry and the stock does nothing again."

We're sharing updates and commentary in real time on our live Nvidia earnings blog.

At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.3% at 53,577, the broad-based S&P 500 had added 0.3% to 7,677, and the tech-heavy Nasdaq Composite was higher by 0.7% to 26,151.

Canadian banks are above the fray

Bank of Montreal (BMO, +0.6%) and Bank of Nova Scotia (BNS, +7.2%) sit just outside the rankings of North America's biggest financial stocks based on criteria such as market capitalization and total assets.

But Bank of Montreal, Canada's oldest bank, hasn't cut its dividend since 1829, before Canada's independence and the U.S. Civil War. Scotiabank hasn't cut its dividend since 1942, spanning World War II and the great financial crisis. And that's something bigger names such as JPMorgan Chase (JPM, +0.1%) just can't say.

Fiscal third-quarter results suggest those streaks for the Canadian banks should continue for the foreseeable future, proliferating trade wars and real wars notwithstanding. Bank of Montreal topped Wall Street's top- and bottom-line forecasts and also announced a stepped-up stock buyback plan. Scotiabank (PDF) added a guidance boost to its top-and-bottom-line beat, for good measure.

"The Canada-U.S. relationship is going through a period of adjustment," CEO Darryl White said during Bank of Montreal's conference call, citing retaliatory tariffs announced by Trump and Carney and acknowledging headwinds for the U.S. and Canada, including trade-related businesses and consumers.

"Against that backdrop," the CEO added, "the world is looking for places that can deliver long-term growth and support resiliency in an increasingly uncertain environment, and Canada has real advantages: a stable financial system, abundant resources, world class talent and a platform to export globally through the world's most comprehensive set of free trade agreements."

DKS misses big

Dick's Sporting Goods (DKS, -30.6%) gave back about $4.9 billion in market cap after management airballed its fiscal second-quarter report, with the consumer discretionary stock missing on earnings and revenue and cutting full-year guidance.

Same-store sales were up 2.1%, and sporting goods sales were up 4.9%. But Wall Street forecast 4% overall growth, and sporting goods sales growth decelerated from 6% during the first quarter. A bigger issue for the mid-cap stock is Foot Locker, which Dick's acquired last September and where same-store sales were down 3.6%.

"As the quarter progressed," Executive Chairman Ed Stack (PDF) explained in the company's earnings announcement, "conditions across portions of the athletic footwear and apparel marketplace became increasingly promotional, and we took action to remain competitively priced to protect and grow our leadership position."

Dick's now expects to report earnings of $11 to $12 per share for fiscal 2027, down from previous guidance of $13.50 to $14.50 and below Wall Street's estimate of $14.28.

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Stocks were mixed at the beginning of a big week for the AI trade and long-term monetary policy, with an uneasy stalemate holding in the Middle East and a trade war widening in North America. Relatively few management teams are scheduled to report financial results and offer guidance this week, but the biggest company in the world by market cap is among them. We'll also hear from Fed Chair Kevin Warsh on Friday.

At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.3% at 53,417. But the broad-based S&P 500 was down 0.3% to 7,652, and the tech-heavy Nasdaq Composite had declined 0.8% to 25,980.

This week will be defined by the earnings calendar, with Nvidia (NVDA, -2.9%) reporting fiscal 2027 second-quarter results and management sharing its vision of where the artificial intelligence (AI) revolution goes from here after the closing bell on Wednesday.

"Geopolitics, oil prices, high yields, and tech volatility all contributed to last week's stock market pullback, and they all look to be in play this week, too," writes E*TRADE from Morgan Stanley Managing Director Chris Larkin.

Larkin notes that U.S. economic sanctions on Iran, the Treasury's attempts to lower long-term yields and incoming data, including the Federal Reserve's preferred inflation gauge, may shape sentiment. "But," he concludes," Nvidia and other tech earnings are positioned to be a major weight on the market's momentum scale."

At the same time, with Treasury yields across the maturity spectrum trending higher, the week could be redefined by the economic calendar, beginning on Friday at 10 am Eastern Standard Time.

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That's when Warsh makes his first keynote speech as the leader of the most important central bank in the world at the Kansas City Fed's annual Jackson Hole Economic Symposium.

The yield on the 2-year Treasury inched up to 4.240% vs 4.234% on Friday. The 2-year yield was 3.379% on February 27, the day before the war in the Middle East between the U.S. and Iran began.

The 10-year Treasury yield ticked down to 4.706% from 4.738%, but is up from 3.960% on February 27. The 30-year Treasury yield declined to 5.235% vs 5.276% last week and 4.630% before the war.

The other chip stock on the earnings calendar

Marvell Technology (MRVL, -3.3%) follows fellow semiconductor stock Nvidia in the reporting-season order when it steps up after the closing bell on Thursday. But Marvell is ahead of Nvidia when it comes to year-to-date share-price performance, with MRVL up 179.3% vs 15.3% for NVDA (and 13.0% for the S&P 500) through Friday.

Wall Street expects MRVL management to report year-over-year earnings growth of 39% on revenue growth of 35%, pale compared to 99% and 97% growth anticipated for NVDA. Of course, much of Marvell's run is rooted in a $2 billion investment from Nvidia announced on March 31.

And there is significant demand elsewhere for its custom application-specific chips, and Wall Street is bullish. Indeed, Wells Fargo analyst Aaron Rakers reiterated his Outperform (Buy) rating and raised his 12-month target price on the tech stock from $240 to $310, citing its opportunity in custom silicon.

Meanwhile, Morgan Stanley analyst Joseph Moore maintained his Equal Weight (Hold) rating but raised his 12-month target price from $195 to $224.

The iShares Semiconductor ETF (SOXX, -2.7%), up 72.9% through Friday, was also down on Monday, as investors, traders and speculators continue to moderate their optimism with incoming data and updated guidance from Nvidia on the way.

Micron Technology (MU, -5.8%), which was up nearly 240% year to date through Friday, and Advanced Micro Devices (AMD, -3.5%), up 121% in 2026, posted big red numbers.

Expedia is on the move again

Expedia (EXPE, +5.4%) was the top-performing S&P 500 stock on Monday after Evercore ISI analyst Mark Mahaney reiterated his Outperform (Buy) rating and raised his 12-month target price for the online travel agency from $375 to $430.

Mahaney had reiterated his rating and raised his target from $350 to $375 on August 6 following a beat-and-raise second-quarter report from management of the consumer discretionary stock. His current target is now the highest among 35 analysts who provide one.

Since hitting a 52-week low of $185.34 intraday on February 23, EXPE is up more than 70%, far outpacing a gain of about 14% for the S&P 500. Mahaney still sees upside of almost 30% from here.

The travel stock has split the Wall Street analyst community, reflected in 17 Buy ratings vs 20 Holds and 1 Sell. The average 12-month target price through August 21 was $336.23.

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The main equity indexes rebounded from Thursday's sharp sell-off, but all three were down for the week. The trend for Treasury yields across the maturity spectrum reflects growing concerns about persistent inflation, government debt and how the Federal Reserve will respond.

At the closing bell on Friday, the blue-chip Dow Jones Industrial Average had added 1.0% to 53,277, but still finished the week lower by 0.8%. The tech-heavy Nasdaq Composite was up 0.4% to 26,180, narrowing its weekly decline to 2.1%. The S&P 500 rose 0.4% to 7,674, though the broad-based index lost 1.4% this week.

"It's not surprising that the S&P 500 pulled back modestly after its early-August breakout to new record highs," observes Daniel Skelly, head of research and strategy for Morgan Stanley Wealth Management. "But the move may have taken on additional significance in some circles, given the role tech softness played."

Skelly notes that although we may see more volatility in the near term due to seasonal factors, "the longer-term AI capex story remains positive."

Meanwhile, the bond market continues to adjust to a Treasury Department plan announced on Wednesday to increase buybacks of longer-dated debt.

The yield on the 2-year Treasury was up to 4.232% vs 4.185% on Thursday. The 2-year was at 4.171% last Friday. The 10-year Treasury ticked up to 4.736% from 4.698% on Thursday and 4.696% a week ago. The 30-year Treasury climbed to 5.274%, up from 5.237% yesterday and 5.266% at the end of last week.

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Fed Chair Kevin Warsh will deliver the keynote address at the Kansas City Fed's annual Jackson Hole Economic Symposium on Friday, August 28, the highlight of next week's economic calendar.

According to University of Pennsylvania Wharton School Professor Patrick Harker, a former president of the Philadelphia Fed, "Warsh is going to have to address the elephant in the room, which is inflation."

Nvidia's growth is about supply and demand

Nvidia (NVDA, -1.0%) will offer fresh evidence for Skelly and others who see more support for stocks from AI capex when the chipmaker takes another turn on the earnings calendar after the closing bell next Wednesday.

Wall Street expects management to report year-over-year earnings growth of 99.0% on annual revenue growth of 97.0%. "Notably," Susquehanna analyst Christopher Rolland writes in a preview of Nvidia's report, "AI demand is supported by increasing hyperscale capex plans. The top five hyperscalers are now expected to nearly double capex spend in 2026."

Rolland also highlights a constructive outlook for 2027, when capex is expected to exceed $1 trillion. "We still view Nvidia as having one of the largest opportunity sets ahead," the analyst concludes.

Indeed, as Louis Navellier of Navellier & Associates writes, "Due to the anticipation of Nvidia's spectacular quarterly results, plus the fact that the financial media will be all excited about their annual trip to Jackson Hole for the annual Kansas City Fed Conference, investor optimism is expected to be sky-high next week."

HOOD tops the S&P 500

Robinhood Markets (HOOD, +12.9%) led S&P 500 stocks higher on Friday after President Donald Trump advocated for passage of federal legislation that would establish a regulatory framework for digital assets such as bitcoin during a White House summit on Thursday.

"We need Congress to take the next step by passing the Clarity Act — a fair version of the Clarity Act," Trump said in remarks prepared for the event. "It's a very, very powerful structured legislation which will keep us ahead of China, keep us ahead of everyone else, will open the door to the next wave of innovations and innovators."

Crypto trading platform Coinbase Global (COIN, +8.2%) and bitcoin treasury company Strategy (MSTR, +6.1%) have also rallied on the president's recent endorsement of a broad bill to support digital assets.

Moderna (MRNA, +8.9%) was the second-best performer in the S&P 500, following its 177% rise on Wednesday and 24% fall on Thursday with another dramatic move.

Merck (MRK, +2.4%), Moderna's partner on the melanoma cancer vaccine that triggered this week's volatility, was second only to Goldman Sachs (GS, +3.7%) among Dow Jones stocks.

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The main stock indexes drifted lower as crude oil prices and interest rates moved mostly sideways on Tuesday. Investors, traders and speculators are waiting for this week's incoming inflation data before they make any major moves. We know earnings season has been big for top- and bottom-line beats, as well as for AI hyperscaler budget growth. Less certain, still, is the situation in the Middle East and who controls the Strait of Hormuz.

"Corporate earnings are now so strong that the wild trading swings that occurred in July have been muted by the reality that record sales, earnings, positive guidance, and rising order backlogs are real," observes Louis Navellier of Navellier & Associates. According to FactSet, based on results for 88% of the S&P 500, 86% have reported a positive earnings surprise, and 76% have reported a positive revenue surprise.

Earnings growth so far is 50.4%, the highest rate since the second quarter of 2021 (91.6%). Reported revenue growth to date is 15.0%, the best figure since the fourth quarter of 2021 (16.1%). All 11 sectors have reported year-over-year revenue growth; five have posted double-digit rates, with energy stocks, technology and communication services stocks leading the way.

At the same time, in the aftermath of a cooler-than-expected July jobs report, the primary factor driving price action this week is inflation. All eyes are on the release of the July Consumer Price Index (CPI) report before the opening bell on Wednesday.

Whether the Federal Open Market Committee (FOMC) raises its target range for the federal funds rate at the conclusion of the September Fed meeting is now almost literally a 50-50 proposition. According to CME FedWatch, the probability that Fed Chair Kevin Warsh & Co. raise interest rates by 25 basis points in September is 49.9%.

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The front-month West Texas Intermediate crude oil futures contract was up 1.6% on Tuesday to $83.45 per barrel. The 2-year Treasury yield inched back to 4.224% from 4.239%, the 10-year was down to 4.692% from 4.698%, and the 30-year ticked lower to 5.242% from 5.243%.

At the closing bell, the tech-heavy Nasdaq Composite had shed 0.6% to 26,445, the broad-based S&P 500 was lower by 0.3% to 7,728, and the blue-chip Dow Jones Industrial Average had declined 0.3% to 53,791.

AI stocks are set to report

AI native cloud computing platform CoreWeave (CRWV, +2.4%) and AI infrastructure supplier Super Micro Computer (SMCI, +0.5%) make an appearance on the earnings calendar after today's close.

Wall Street expects CoreWeave, one of the hottest IPOs of 2025, to report triple-digit revenue growth, roughly in line with its most recent two quarters, and to update markets on a backlog that was $99 billion at last check. Analysts also expect Super Micro's top-line growth to exceed 100%, with new orders pre-reported at about $60 billion also on their collective mind.

Meanwhile, Nvidia (NVDA, -0.02%) has reasserted itself atop the global market cap rankings, as markets seem to approve of a new $500 billion plan to support AI infrastructure spending.

Intel (INTC, +0.2%) is also seeing a positive reaction to its upsized $20 billion offering of new shares, as the semiconductor stock seeks to expand its capacity. Intel reported expectations-beating results and raised full-year guidance on July 23.

Nvidia will unofficially bring down the curtain on the current reporting season when the biggest mover of the AI boom reveals its fiscal 2027 second-quarter results after the closing bell on Wednesday, August 26.

CAH rises to and retreats from a new all-time high

Cardinal Health (CAH, +1.2%) was among the top-performing S&P 500 stocks early on Tuesday and traded up to a new all-time high intraday after the medical services and products provider reported mixed fourth-quarter results but shared strong guidance for fiscal 2027.

CAH missed Wall Street's earnings estimate and beat on revenue for the three months ending June 30. But management expects earnings per share of $12.40 to $12.60 next fiscal year, which represents year-over-year growth of 13% to 15%, and is well ahead of a FactSet-compiled consensus of $12.08 at the midpoint.

The company forecast 3% to 5% growth in revenue from its pharmaceuticals business, 2% to 4% growth for medical products and distribution. Guidance includes an uplift from the completed acquisition of Strive Medical and the announced deal to buy diabetes assets from AdaptHealth (AHCO, +8.2%).

CAH, a sleeper blue-chip stock, has generated a total return of more than 400% over the trailing five years vs less than 90% for the S&P 500. CAH is also outpacing the S&P 500 over the trailing 12 months (52.2% to 22.8%), as well as year to date (16.2% to 14.0%) through Monday.

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Stocks jumped out of the gate Thursday and stayed higher through the close as well-received earnings from Microsoft (MSFT) overshadowed a disappointing reaction to Meta Platforms' (META) quarterly results. Market participants also kept an eye on a busy economic calendar and surging long-term Treasury yields, though these did little to shift today's price action.

At the close, the blue-chip Dow Jones Industrial Average was up 1.2% at 52,208, the broader S&P 500 was 1.7% higher at 7,437, and the tech-heavy Nasdaq Composite had surged 2.8% to 25,122.

And in the bond market, long-term yields continued to climb, with the 10-year Treasury yield closing up 5.5 basis points at 4.677% and the 30-year yield jumping 7.8 basis points to 5.221%, both near their highest levels since 2007.

This comes as rising bond yields sank stocks on Wednesday in reaction to the Federal Reserve's split decision to keep interest rates steady, even as inflation sits well above the central bank's 2% target.

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"The reluctance to lift generated short-term credibility damage, driving a dramatic steepening across the Treasury curve as bond vigilantes stood up and said, 'wait a minute,' resulting in purchases at the shorter tenors alongside selling at the long end," explains José Torres, senior economist at Interactive Brokers.

June PCE eases on falling energy prices, GDP slows

Markets received another inflation update today with the release of June's Personal Consumption Expenditures Price Index (PCE). According to the Bureau of Economic Analysis (BEA), headline inflation was down 0.1% month over month and up 3.7% year over year.

This was much better than May's monthly and annual increases of 0.4% and 4.1%, respectively, and came as energy prices tumbled roughly 20% in June. Core PCE, which excludes volatile food and energy costs, also eased in June, rising 0.1% month over month and 3.3% year over year.

In a separate release, the BEA said that second-quarter gross domestic product (GDP) was 1.5% higher in Q2 — slower than Q1's 2.1% increase. The headline number isn't as worrying as it seems, though, as surging imports were the main drag on economic growth in the second quarter. The data also showed that consumer spending and investments were strong.

"Despite moderating inflation, strong domestic activity across consumption and business investment will keep the Fed diligent about the risks overheating could have on the inflation trajectory," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "We continue to expect the Fed to be patient as it awaits more inflation data."

Microsoft gains $500 billion in value after earnings

In addition to a busy day of economic reports, Wall Street had a lengthy earnings calendar to sift through. Microsoft's earnings were among the most noteworthy.

The tech giant jumped 15.5%, its biggest one-day gain since 2008. It also added $450 billion in market value — the most ever for a company in one day, beating out Nvidia (NVDA, +2.7%), which gained $440 billion in market cap on April 9, 2025, according to The Wall Street Journal.

For its fiscal fourth quarter, Microsoft reported higher-than-expected earnings and revenue, with its results boosted by a 43% year-over-year revenue growth in its Azure cloud segment.

And while MSFT said it expects fiscal 2027 capital expenditures to be up year over year, Chief Financial Officer Amy Hood also said she believes the company will remain free cash flow positive.

"Microsoft reported a very strong quarter and it struck the tone markets are looking to hear as the key drivers of growth came from the cloud and AI divisions," says Brian Mulberry, chief market strategist at Zacks Investment Management. And the blue chip stock's reaction indicates "that investors are finally excited about Microsoft again."

Meta stock posts its longest losing streak on record

Fellow Magnificent 7 stock Meta Platforms, on the other hand, slumped 8.0% after its results. META has now fallen for 11 days straight, its longest losing streak on record. Shares are down 20.9% over that time.

While the Facebook parent reported a second-quarter revenue beat, it fell short on the bottom line and gave lower-than-expected third-quarter revenue guidance.

And, as Meta ramps up spending on artificial intelligence initiatives, the company also said its free cash flow plunged 91% year over year to $784 million and it raised the low end of its full-year capital expenditures outlook.

"The report's defining narrative is the aggressive cost absorption required to stay at the leading edge of generative AI," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. "It's just not the greatest story to increase the bottom end of your capex, basically increasing the midpoint, and not showing much positive guidance on revenue expectations."

Big Tech earnings will continue after Thursday's close, with Amazon (AMZN, +3.9%) and Apple (AAPL, -1.4%) set to report.

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Oil prices surged and the stock market's "fear gauge" spiked as the war between the U.S. and Iran escalated again on Wednesday. Violence in the Middle East continues to impede traffic through the Strait of Hormuz, while even exponential growth for AI-related companies is letting down investors, traders and speculators.

"We'll be hitting them hard," President Donald Trump told Fox News after Iran struck a U.S. base in Jordan. "They're going to get a beating." The front-month West Texas Intermediate crude oil futures contract was up 7.2% at $84.94 per barrel.

The Cboe Volatility Index (VIX) rose from 18.21 on Tuesday to as high as 20.34 on Wednesday, breaching its "normal" range of 12 to 20 and settling at 20.05.

The July Fed meeting ended where investors, traders and speculators thought it would: with interest rates unchanged for the fifth straight time but central bankers worried about inflation and the energy shock.

The target range for the federal funds rate remains 3.50% to 3.75%. But three voting members of the Federal Open Market Committee (FOMC) dissented from the decision because they favored raising it by 25 basis points.

"Economic activity is expanding at a solid pace," reads a repeated sentence in a subtly updated but still brief FOMC policy statement, "despite elevated uncertainty that owes, in part, to the conflict in the Middle East."

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As Fed Chair Kevin Warsh said during his press conference, "We'll be watching inflation data over the period ahead," but he also said the central bank wouldn't rely exclusively on any one piece of it.

Acknowledging a steep rise in market-based rates over the last 42 days, the Fed chair noted shocks the economy seems to be absorbing relatively well so far.

By the closing bell, the tech-heavy Nasdaq Composite had shed 1.7% to 24,442, the broad-based S&P 500 was down 1.5% to 7,316, and the blue-chip Dow Jones Industrial Average had declined 2.2% to 51,594.

SKHY leads chip stocks lower again

The earnings calendar is the market's main focus following an overnight preview from South Korea-based SK Hynix (SKHY, -2.6%). The Nvidia (NVDA, -3.6%) supplier reported 257% top-line growth, as well as a 557% rise for operating profit and a 1,242% earnings increase.

But SK Hynix stock was down 9.6% on its local exchange because it failed to meet high expectations, and trading was halted on South Korea's KOSPI Index to stem a broader sell-off. The KOSPI closed lower by 6%.

Losses were similar for Nvidia and other semiconductor stocks such as Advanced Micro Devices (AMD, -5.5%), Broadcom (AVGO, -2.8%) and ASML (ASML, -2.0%), with Micron Technology (MU, -9.9%) suffering like fellow memory stock SKHY.

Up now are Meta Platforms (META, -1.3%) and Microsoft (MSFT, -0.7%), with Apple (AAPL, -0.6%) and Amazon (AMZN, -1.8%) to follow on Thursday.

CAT dogged by data center debate

Caterpillar (CAT, -6.9%) was the worst-performing Dow Jones stock on Wednesday after Baird analyst Mircea Dobre cut his rating on the heavy equipment maker from Buy to Hold and reduced his 12-month target price from $1,200 to $900.

Dobre cited rising regulatory opposition to AI data centers due to environmental strains and power grid pressures.

"The ground is shifting in many ways; the recent New York State moratorium on data center construction is the highest-profile example of a bigger (and growing) trend towards regulatory action at state and local level targeting data centers," the analyst observes. "This raises costs, adds new development approval hurdles, limits site availability, and likely slows future investment."

Caterpillar is scheduled to report second-quarter results before the opening bell next Tuesday, August 4. Wall Street expects to see earnings of $6.20 per share (+31.4% year over year) on revenue of $19.17 billion (+15.7% YoY).

CAT hit new all-time intraday and closing highs on June 30. The industrial stock is down 20.9% since then, shedding more than $100 billion in market cap.

What the 2-year Treasury yield says about a rate hike

According to LPL Financial Chief Technical Strategist Adam Turnquist, markets have adjusted to a "higher-for-longer" environment, with the 2-year Treasury yield up about 90 basis points from its February 27 low of 3.375% and outside the target range for the federal funds rate since April.

Turnquist describes eight periods since the 1980s during which the 2-year yield was above that range while policy was on hold, defined as at least three months without a change in the fed funds rate, along with a "crossover period" of at least 20 consecutive trading days.

"As of July 28, 2-year yields have remained above the fed funds target rate for 68 trading days," Turnquist notes, "with the spread reaching a maximum of 0.60% so far."

The median maximum spread for the comparison period was 0.97%. And Turnquist concedes the limited nature of the historical data set means it can't be used to either confirm or rule out a rate hike.

Still, he concludes, "The comparison suggests the current crossover is less mature than the three completed historical signals that ultimately preceded tighter monetary policy."

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Stocks were choppy early on Tuesday, but falling oil prices and a round of well-received corporate earnings helped the Dow Jones Industrial Average and S&P 500 climb higher into the close. The Nasdaq Composite, however, couldn't sidestep an extended slump in chip stocks.

At the close, the tech-heavy Nasdaq Composite was 0.2% lower at 24,876, pressured by weakness in semiconductor stocks. The iShares Semiconductor ETF (SOXX), which counts Advanced Micro Devices (AMD, -8.2%) and Micron Technology (MU, -8.9%) among its biggest holdings, fell 4.8% and is now down 23% for the month to date.

The continued sell-off is being "driven by concerns about capital return prospects, valuations, circular financing dynamics and Chinese competition," says José Torres, senior economist at Interactive Brokers.

But the broader S&P 500 (+0.2% at 7,428) and the Dow Jones Industrial Average (+1.0% to 52,747) advanced thanks in part to falling oil prices. Front-month West Texas Intermediate crude futures fell 4% to settle at $79.26 per barrel.

Strong earnings for several blue chip stocks also helped buoy the benchmarks. Coca-Cola (KO), for one, jumped 5.0% after the soft drink maker beat second-quarter estimates and raised its full-year guidance.

The company credited the FIFA World Cup as one catalyst behind its strong results, seeing Trademark Coca-Cola volume growth of 5% in Q2, its best volume growth since the COVID-19 pandemic.

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Boeing (BA) was another post-earnings winner, rising 4.8% as the aerospace giant's Q2 revenue came in higher than expected, which offset a wider-than-anticipated per-share loss.

Sherwin-Williams has its best day since 2022 after earnings

Sherwin-Williams (SHW) emerged as the best Dow Jones stock today, surging 8.3% — its best day since April 26, 2022 — after the paint maker reported stronger-than-anticipated second-quarter results.

"Sales improvement was driven by continued growth investments, new account wins and increased share of wallet," said Sherwin-Williams CEO Heidi Petz. "We also implemented pricing actions to offset raw material inflation that pressured our gross margin in the quarter."

In mid-June, Argus Research analyst Alexandra Yates said SHW is "uniquely positioned to benefit from significantly higher demand trends and margin expansion in the long term, this due to its dominant market position." Yates added that she views the materials stock as a "core long-term holding."

Corning suffers its biggest one-day drop in six years

Not all earnings reports were well received. Corning (GLW) plunged 12.1%, its biggest one-day drop since March 16, 2020, after the Gorilla Glass maker's disappointing third-quarter revenue forecast overshadowed a second-quarter beat.

Susquehanna analyst Mehdi Hosseini says the softer-than-expected revenue guidance is due primarily to "weakness outside Optical Communications, particularly within the Solar segment."

And he maintained a Positive (Buy) rating on the tech stock, saying it "remains well positioned to benefit from growing AI cluster sizes and increasing and width requirements, while also enabling alternative manufacturing approaches for fiber array units (FAUs), which we believe are among the most critical components in the commercialization of optical CPO (transceiver) architectures."

These transceiver architectures have a variety of use cases, including in data centers, AI chip connections and high-performance computing.

Buckle up

There are plenty more events this week that could spark market volatility. On the economic front, Wall Street is waiting for tomorrow afternoon's policy announcement from the Federal Reserve.

While it's unlikely the central bank will raise the federal funds rate this time around, rate hike odds have been rising. According to CME Group FedWatch, futures traders are now pricing in a 32% chance the Fed will increase rates tomorrow, up from 26% one week ago.

We're reporting live on the July Fed meeting. Follow along with Kiplinger for all the news and updates.

And on the earnings calendar, Wednesday's after-the-close announcements from Meta Platforms (META, -0.08%) and Microsoft (MSFT, +1.1%) will likely draw a crowd. Apple (AAPL, +0.9%) and Amazon (AMZN, -0.2%) will report on Thursday.

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Crude oil prices sank and interest rates were lower Monday on renewed hope for peace in the Middle East. But semiconductor stocks sold off as markets continue to wonder when escalating hyperscaler capex budgets will generate returns on investment.

The front-month West Texas Intermediate crude oil futures contract was down 8.1% to $82.04 per barrel. The 2-year Treasury yield declined by nine basis points to 4.322%.

Both are still much higher than they were before the war between the U.S. and Iran started on February 28. But the immediate reaction to the suspension of attacks in the U.S.-Iran war "implies further equity upside when the conflict is fully over," according to Louis Navellier of Navellier & Associates.

"The Fed decision on making a change in the fed funds rate will be the big event of the week," Navellier observes about the economic calendar.

The July Fed meeting starts tomorrow and ends Wednesday. Price action in the fed funds futures market shows a 64% probability the central bank keeps its primary benchmark where it is this week. But, according to CME FedWatch, odds of a rate hike in September are now up to 55.5%.

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It's also a big week for the earnings calendar, as Navellier notes: "By the end of the week, more than a third of S&P companies will have reported."

At the closing bell, the Dow Jones Industrial Average was up 0.5% to 52,209, and the broad-based S&P 500 had inched up 0.02% to 7,413 But the tech-heavy Nasdaq Composite was down 0.2% to 24,932.

AAPL > NVDA

Nvidia (NVDA, -5.0%) was the worst-performing Dow Jones stock during a rough session for chipmakers. The iShares Semiconductor ETF (SOXX, -2.1%) reflected broadening concern about the sustainability of the AI revolution as its leader makes new and bigger deals.

Bloomberg reported that Nvidia is discussing one deal worth as much as $250 billion to help its customer OpenAI lease computing power from a U.S. data center and another to finance $350 billion of OpenAI's chip purchases for the project.

On Friday, Nvidia announced a $500 billion deal with South Korea-based chipmaker SK Hynix (SKHY, -7.5%) that illustrates what skeptics describe as "circular" AI deals supporting the infrastructure build-out.

Apple (AAPL, +1.2%), meanwhile, overtook NVDA to become the biggest company in the world in terms of market cap. The iPhone maker will carry a year-to-date return of about 23% into its fiscal third-quarter earnings announcement after the closing bell on Thursday.

Meanwhile, amid rising anxiety about their capex plans, Meta Platforms (META, -0.2%) and Microsoft (MSFT, +1.9%) will report after the closing bell on Wednesday. Amazon (AMZN, -0.3%) joins AAPL in the spotlight on Thursday.

As Navellier writes, these four Magnificent 7 stocks account for 17% of the weight of the S&P 500 "and will be very telling of the continued confidence in the AI theme." Nvidia will report fiscal 2027 second-quarter earnings on Wednesday, August 26.

QBTS + T

D-Wave Quantum (QBTS, +8.9%) is one of the best ways to invest in quantum computing right now because it's making deals with classic blue-chip companies such as AT&T (T, +1.2%).

On Monday, D-Wave Quantum announced the expansion of a partnership teased in January when AT&T executives appeared at the Qubits 2026 conference. The telecommunications giant will now use D-Wave's tech across its network operations, most notably outage detection and traffic management.

"AT&T's initial focus is on layering D-Wave's annealing quantum computing technology into the tools that are already powering AT&T's agentic AI solutions," D-Wave said in its press release.

Mizuho Securities analyst Vijay Rakesh reiterated his Outperform (Buy) rating and raised his 12-month target price for QBTS from $29 to $35 following management's first "analyst day" event in June, citing its leadership in annealing QC.

Rakesh says D-Wave's updated financial model shows long-term gross margins for quantum computing as a service (QCaaS) at 65% to 75%, professional services at 40% to 50% and computing systems at 75% to 90%.

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Stocks sold off Thursday as rising bond yields and surging oil prices spooked market participants. Poorly received earnings reports from a pair of Magnificent 7 stocks didn't help matters, with the main indexes now on track for another week of losses.

At the close, the blue-chip Dow Jones Industrial Average was off 1.0% at 51,711, the broader S&P 500 was 1.2% lower at 7,408, and the tech-heavy Nasdaq Composite was down 2.2% at 25,137.

Rising bond yields were one headwind for stocks today. The yield on the 2-year Treasury jumped 4.9 basis points to 4.351% — its highest level since February 2025. And the 10-year Treasury yield spiked 4.2 basis points to an 18-month high of 4.699%.

The surge in Treasury yields comes as oil prices climb and accelerate inflation worries. It's also lifting expectations for a rate hike later this year. Front-month West Texas Intermediate crude futures rose 6.2% to $92.19 per barrel, and are now up 33% month to date.

"Higher oil prices are the biggest near-term macro risk," says Sameer Samana, head of Global Equities and Real Assets at Wells Fargo Investment Institute (WFII). "Escalating Middle East tensions have pushed crude prices higher, raising concerns that inflation could reaccelerate and delay interest-rate relief … maybe even cause the Fed to hike."

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And higher Treasury yields, Samana adds, reflect "expectations that rates may stay higher for longer, creating potential headwinds for rate-sensitive sectors and long-duration assets."

According to CME Group FedWatch, futures traders are pricing in a 57% chance that the Federal Reserve will hike the federal funds rate by a quarter-percentage point in September — and a 26% probability it will raise rates by a half-percentage point.

The odds for a rate hike at next week's Fed meeting are currently at 36%, up from 12% one week ago.

Alphabet stock has its worst day since May 2025 on capex worries

In single-stock news, Alphabet (GOOGL) slumped 7.1% today, the Dow Jones stock's worst day since May 2025, after the Google parent reported earnings.

While Alphabet beat on the top and bottom lines on strong revenue growth in its Cloud, Search and YouTube segments, the company's increased spending is worrying Wall Street. In its earnings call, management said it is raising its full-year capex budget to a range of $195 billion to $205 billion from $180 billion to $190 billion.

The higher capex, Alphabet admits, will keep pressure on free cash flow — which came in negative for the first time in Q2 — but "enables us to capitalize on the AI opportunity and continue to drive attractive returns."

Tesla loses $203 billion in market value today

Fellow Magnificent 7 stock Tesla (TSLA) fell 14.5% — shedding $203 billion in market value — after the mega cap reported lower-than-expected second-quarter earnings. TSLA also saw free cash flow turn negative in Q2, reporting a deficit of $1.1 billion, while capex more than doubled from the year prior, to $5.8 billion.

In the company's earnings call, Tesla's chief financial officer, Vaibhav Taneja, said capex will rise even further from here.

"CapEx will grow for the next two to three years as we expand our robotaxi fleet, expand our production capacity for Optimus, make investments for semiconductor fab, install solar manufacturing capacity and AI compute infrastructure in addition to all the other expansions we'll do for other manufacturing for automotive," Taneja explained.

"TSLA is in the midst of a high investment period so capex efficiency is key with the payoff from these investments further down the road, in our view," says UBS Global Research analyst Joseph Spak.

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Two of the three main equity indexes opened lower on Wednesday as escalation of the war in the Middle East cast a "risk-off" pall on markets. Investors, traders and speculators eased back into "risk-on" names as the trading session evolved, with focus on the first two Magnificent 7 revelations of the earnings season. Midday momentum ebbed, though, and all three indexes closed lower.

"From this point forward," President Donald Trump posted on Truth Social before the opening bell, "any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran."

The front-month West Texas Intermediate crude oil futures contract was up another 2.8% to $86.66 per barrel. WTI has risen 29.3% since hitting an intraday "ceasefire" low of $67.04 on July 2. Crude oil closed at $67.02 on February 27, the day before the war in the Middle East began.

The 2-year Treasury yield hit another new 52-week high on the way to closing at 4.304% vs 4.261% on Tuesday, and the 10-year yield was up to 4.659% from 4.628%. As Bloomberg calculates, the 30-year yield, which ticked up to 5.149% from 5.131%, has now been above 5% for more days in 2026 than in any other year since 2007.

Technology opened lower a day after a big bounce led by semiconductor stocks including Micron Technology (MU, -1.2%) and SK Hynix (SKHY, -3.9%) before rallying through midday. At the same time, Nvidia (NVDA, +2.3%) posted the biggest gain among Dow Jones stocks.

By the closing bell, the tech-heavy Nasdaq Composite was down 0.6% at 25,690, the broad-based S&P 500 was off 0.1% at 7,498, and the blue-chip Dow Jones Industrial Average had ceded six points, or 0.01%, to 52,218.

"This volatility is due primarily due to rising interest rates driven by the escalating conflict in Iran and rising energy prices," writes Louis Navellier of Navellier & Associates.

What you need to know about Alphabet earnings

Alphabet (GOOGL, -1.5%), which replaced Verizon Communications (VZ, +1.1%) in the Dow on June 29, posted earnings for the first time as a member of the 30-stock index after today's closing bell.

Electric vehicle maker Tesla (TSLA, -1.3%) and the Google parent are the first two of the Magnificent 7 stocks to report this season.

The big number to track here is second-quarter capital expenditures. Alphabet said it would spend $180 billion to $190 billion this year to build out its artificial intelligence (AI) infrastructure.

According to FactSet, Wall Street forecast capex of $45.1 billion for the three months through June 30, an estimated increase of 101.3% from the $22.4 billion Alphabet laid out a year ago, and a full-year run rate of $180.4 billion.

How GOOGL is trading right now is probably a function of where its second-quarter capex came in relative to its guidance and Wall Street's estimate, as well as whether management has revised its outlook.

Constellation has the power

Energy stocks, including Chevron (CVX, +1.0%) and Exxon Mobil (XOM, +1.8%), were boosted again by crude oil's rise. CVX was up 12.9% and XOM 10.7% from July 2 through July 21 vs a gain of 0.4% for the S&P 500.

The vertically integrated supermajors, with upstream, midstream and downstream exposure, will update the market on how the energy shock is affecting their operations before the opening bell next Friday, July 31.

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Utility stocks, well positioned to serve power-hungry hyperscalers but also relatively stable vs AI stocks, were tops among the 11 market sectors recognized by S&P Global Market Intelligence.

Constellation Energy (CEG, +4.8%), as Morgan Stanley analyst David Arcaro noted when he picked up coverage of the sector leader in March, is also getting a lift from the biggest carbon-free nuclear generation capacity in the U.S.

Indeed, Constellation's 21 reactors across 12 facilities in Illinois, New York, Pennsylvania, Maryland, New Jersey and Texas can power a lot of data centers.

Arcaro recently reiterated his Overweight (Buy) rating on CEG and raised his 12-month target price from $364 to $366. Constellation Energy is scheduled to release its second-quarter earnings report on Thursday, August 6.

Meanwhile, according to The Wall Street Journal, President Trump has approved a 30-year agreement to provide Saudi Arabia with a civilian nuclear power program "estimated to be worth tens of billions of dollars."

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Technology stocks took off on Tuesday, and crude oil prices did the same. Investors, traders and speculators are looking forward to imminent earnings announcements from two of the Magnificent 7, even as the U.S. and Iran are escalating the war in the Middle East.

At the closing bell, the tech-heavy Nasdaq Composite was up 1.3% at 25,837, the broad-based S&P 500 had added 0.9% at 7,509, and the blue-chip Dow Jones Industrial Average was higher by 0.7% at 52,224.

Front-month West Texas Intermediate crude oil futures rose 2.7% to $84.68 per barrel, and the 2-year Treasury yield ticked up to 4.266% from 4.215% on Monday.

The iShares Semiconductor ETF (SOXX, +5.5%) extended its gain on Monday into a full-blown rally on Tuesday, though the Roundhill Magnificent Seven ETF (MAGS, +0.01%) generated a more modest return.

"The market continues to look through the Middle East situation as transitory and is staying focused on strong earnings," Louis Navellier of Navellier & Associates observes. "The trend remains positive."

It's all about earnings

Google parent Alphabet (GOOGL, -1.4%) and electric vehicle maker Tesla (TSLA, +2.5%) are scheduled to report second-quarter earnings after the closing bell on Wednesday.

Much is riding on all of the Magnificent 7 stocks, Nvidia (NVDA, +2.0%) in particular. As FactSet analyst John Butters notes, the estimated year-over-year earnings growth rate for the group is 31.1%.

But there's a lot riding on earnings generally: The other 493 S&P 500 stocks are expected to post bottom-line growth of 22.8%, which would be their highest growth rate since the fourth quarter of 2021.

"In fact," Butters writes, "four of the five top contributors to earnings growth for the S&P 500 for Q2 2026 are not 'Magnificent 7' companies: Micron Technology (MU, +12.2%), Chevron (CVX, +0.7%), Exxon Mobil (XOM, +2.3%), and Broadcom (AVGO, +2.2%)."

Indeed, the leader of the AI revolution is the only Mag 7 stock that's also a top-five contributor to current earnings growth estimates. Nvidia posted fiscal 2027 first-quarter results in May and will report again on Wednesday, August 26.

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The energy stocks stand out, too, amid the bottleneck at the Strait of Hormuz. Chevron and Exxon Mobil are scheduled to report second-quarter results before the opening bell next Friday, July 31.

Micron and Broadcom revealed blowout results for their respective fiscal quarters in June. The semiconductor stocks are scheduled to report again in September.

3M looks good

3M (MMM) was No. 1 among the 30 Dow Jones stocks on Tuesday, rising as much as 10.7% to within $1.26 of its February 12 52-week high, after management reported expectations-beating results and raised its full-year guidance.

3M now sees earnings of $8.80 to $8.95 per share for 2026, up from a range of $8.50 to $8.70, with CEO Bill Brown citing "strong first-half performance and continued momentum."

The industrial stock generated a year-to-date total return of 0.3% through Monday vs 9.4% for the S&P 500, sagging in January after management shared lackluster initial guidance and trending lower through May.

Genuine Parts cuts some guidance

Genuine Parts (GPC, -2.7%) is one of the best stocks to buy for dependable dividend growth because of a 70-year history of raising its quarterly payout. Management of the automotive and industrial parts maker sustained that record in February with a 3.2% increase.

At the same time, though, the consumer discretionary stock said it was splitting into two publicly traded companies, "Global Automotive," which operates as the familiar NAPA retail front, and "Global Industrial," which works under the Motion banner.

The separation is costing more than management forecast, so Genuine Parts updated elements of its full-year forecast, most notably GAAP EPS. That estimate was revised from $6.10 to $6.60 to $5.90 to $6.40.

Management reaffirmed its adjusted EPS guidance range, $7.50 to $8, as well as its 3% to 5% revenue growth rate forecast. Still, that updated element shook the market.

It appears management understood the gravity of its decision and conducted a thorough review: "The company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook, geopolitical conflicts and the potential impact on results in updating its outlook."

Genuine Parts hasn't defined a post-separation dividend policy, though details will likely be forthcoming following the forecast completion of the separation in the first quarter of 2027.

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With many Big Tech names lining up to report quarterly results this week and next, investors, traders and speculators would prefer to focus on AI, earnings and guidance rather than uncertainty about the Middle East, inflation and interest rates. The main equity indexes reflected this balancing act on Monday.

At the closing bell, the tech-heavy Nasdaq Composite was down 0.05% at 25,508, the S&P 500 had slipped 0.2% to 7,443, and the blue-chip Dow Jones Industrial Average was off 0.6% at 51,841.

The front-month West Texas Intermediate crude oil futures contract added 0.9% to $82.49 per barrel, and the 2-year Treasury yield ticked up to 4.208% from 4.172% on Friday.

The iShares Semiconductor ETF (SOXX, +0.5%) recovered after posting a 10.2% decline last week amid renewed concerns about hyperscaler spending on artificial intelligence infrastructure, as well as another threat posed by an emergent Chinese AI model.

"Despite the recent pullback," observes LPL Financial Chief Technical Strategist Adam Turnquist, citing last week's 1.6% decline for the S&P 500, "market breadth continues to improve."

As Turnquist notes, the percentage of S&P 500 stocks trading above their 200-day moving average has increased to nearly 70% from just above 50% in May, "signaling that participation beneath the surface remains considerably healthier than it was just a few months ago."

At the same time, price action remains volatile amid a cycle of escalating and de-escalating U.S.-Iran tensions.

Apple falls from high branches

Apple (AAPL, -2.1%) was one of three Magnificent 7 stocks in the red on Monday, the share price for the iPhone maker tracking back after hitting new highs on Friday, likely due to some profit-taking.

AAPL reached a fresh intraday peak of $334.99 and a closing record of $333.74 on July 17, briefly overtaking Nvidia (NVDA, +0.2%) as the biggest company in the world based on a market cap.

Tesla (TSLA, -3.0%), meanwhile, sold off ahead of its turn on the earnings calendar after the closing bell on Wednesday. Tesla pre-reported a 25% increase in EV deliveries during the second quarter.

TSLA hasn't seen much upside based on its relationship to SpaceX (SPCX, -3.3%), though the consumer discretionary stock has drifted lower in the afterburn of the biggest IPO in stock market history.

While AAPL was dragging on the index, Google parent Alphabet (GOOGL, +1.5%) was among the top-performing Dow Jones stocks on Monday, along with Amazon (AMZN, +1.1%) and Microsoft (MSFT, +2.2%).

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Alphabet is also scheduled to report second-quarter results after Wednesday's closing bell. Amazon and Apple are scheduled to report on July 30, Microsoft on July 29.

For the record, Meta Platforms (META, -0.02%) closed marginally lower on Monday. The Facebook parent is scheduled to report earnings on July 29. Nvidia will report on Wednesday, August 26.

AMC's rise is Homeric

AMC Entertainment (AMC), among the most notorious small-cap stocks in financial market history, was up as much as 27.8% on Monday after management reported the highest revenue in the movie-theater operator's more than 100 years in business.

AMC generated earnings of 14 cents per share vs a Wall Street forecast for a loss of four cents per share. Revenue grew by 14.2% to $1.59 billion, topping a consensus estimate of $1.5 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was up 69.6% to a company-record $321.4 million.

According to CEO Adam Aron (PDF), it's the first time AMC has surpassed $300 million adjusted EBITDA for a three-month period, and AMC also generated $190.1 million in free cash flow.

The CEO is optimistic: "This weekend's powerful debut of Universal Pictures and Christopher Nolan's THE ODYSSEY, with an encouraging media reported $124 million domestic opening, is the latest reminder of the strength of today's theatrical marketplace."

Aron says the filmed version of Homer's epic poem follows a second quarter during which six different movies posted domestic opening weekend gross box office totals of more than $75 million.

"We believe that movie theatres will enjoy, in the full twelve-months of 2026, their strongest yet post-pandemic year, at both the domestic and the global box office," the CEO concludes.

Indeed, with a year-to-date total return of almost 25% vs less than 10% for the S&P 500, the freebies aren't the only thing you can enjoy about this stock.

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President Donald Trump re-imposed a U.S. blockade on Iran and introduced a 20% toll on all cargo transiting the Strait of Hormuz, adding to uncertainty at the key passage to and from the Persian Gulf. At the same time, another steep sell-off for South Korea-based semiconductor stocks undermined "risk on" sentiment stateside.

"All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as 'THE GUARDIAN OF THE HORMUZ STRAIT,'” the president posted on Truth Social, "but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."

The front-month West Texas Intermediate crude oil futures contract was up 8.8% to $77.72 per barrel. The 2-year Treasury yield ticked up to 4.269% from 4.208% on Friday and reached a new 52-week high.

Meanwhile, the Korea Composite Stock Price Index dropped 9.0% on Monday. The KOSPI recently traded into "bear market" territory by declining 20.5% from its record closing high on June 22 through last Wednesday's close.

"The stock market's attempt to break out of its six-week consolidation faces a couple of familiar challenges—tech volatility and geopolitics," E*TRADE from Morgan Stanley managing director Chris Larkin observes. "The ongoing swings in semiconductors has made it difficult for tech to mount a sustained push to the upside, and while the market has so far taken the breakdown of the US-Iran ceasefire in stride, escalating hostilities and rising oil prices won't help the bullish cause."

Larkin notes that investors, traders and speculators expect incoming consumer and producer inflation data to show some cooling. "But," he adds, "the market may not get as much of a boost from good news if traders think oil is headed higher again."

Big Tuesday

Indeed, this week's economic calendar, Tuesday morning in particular, is all about inflation and interest rates.

The Bureau of Labor Statistics (BLS) will release the June Consumer Price Index (CPI) report at 8:30 a.m. Eastern Standard Time. That's less than two hours before new Federal Reserve Chair Kevin Warsh makes his first appearance before Congress as mandated by the Federal Reserve Act.

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The act requires the Fed chair to appear twice a year to talk about the central bank's Semiannual Monetary Policy Report. Warsh is scheduled to testify before the House Financial Services Committee on Tuesday and at the Senate Banking Committee on Wednesday.

Tuesday is also a big day on the earnings calendar, with Bank of America (BAC, -0.2%), Citigroup (C, -0.1%), Goldman Sachs (GS, -0.8%), JPMorgan Chase (JPM, -0.6%) and Wells Fargo (WFC, +0.6%) scheduled to report second-quarter results and offer forward-looking guidance before the opening bell.

SKHY vs AAPL

SK Hynix (SKHY, -9.3%) was down 15.4% during the first trading session on its local exchange after it completed one of the biggest IPOs in U.S. history on Friday. SK Hynix and fellow chipmaker Samsung Electronics, which was down 10.7% on Monday, make up about 51% to 53% of the KOSPI.

The iShares Semiconductor ETF (SOXX, -4.8%) posted a more modest loss, though Nvidia (NVDA, -3.5%) was the worst-performing Dow Jones stock.

Apple (AAPL, +0.6%) traded against Monday's trend for both the Magnificent 7 stocks and tech generally, touching a new all-time high even as the Roundhill Magnificent 7 ETF (MAGS, -1.0%) was well in the red.

Citi Research analyst Asiya Merchant reiterated her Buy rating and raised her 12-month target price for AAPL from $315 to $365, citing the September release of the iPhone 18 as "an important catalyst that could further strengthen investor sentiment." The iPhone 18 is expected to include Siri AI.

At the closing bell on Monday, the tech-heavy Nasdaq Composite was down 1.6% at 25,873 the broad-based S&P 500 had shed 0.8% at 7,515, and the blue-chip Dow Jones Industrial Average was off 0.3% at 52,498.

When FAST is also safe

If there is such a thing as a safe stock, Fastenal (FAST, +1.2%) qualifies according to Kiplinger's Personal Finance Magazine contributing columnist James Glassman. As Glassman notes, the wholesale nuts and bolts distributor has boosted its dividend for 26 straight years, and it has a beta of 0.88. So it's a "Dividend Aristocrat," and it's less volatile than the broader market.

FAST, which is also scheduled to report earnings before the opening bell on Tuesday, generated a year-to-date total return of 17.1% through July 10 vs 11.4% for the S&P 500. The industrial stock is also up 94.1% and 451.8% over the trailing five- and 10-year periods vs 85.7% and 316.3% for the index.

The Wall Street analyst community is split on FAST: Five Buy, seven Hold and five Sell ratings. But Rothschild & Co. Redburn sees something different here, too.

"An investor who committed $9,000 to purchase 1,000 shares at Fastenal’s IPO in 1987 would today hold shares worth approximately $15.5 million," analyst William Blunt writes in the March 2026 Redburn Review (pdf), "equating to a compounded annual return of 21.6%, or 22.2% after reinvesting dividends."

Blunt says the culture established by founder Bob Kierlin, who was CEO for 35 years, is built on frugality. "This disciplined approach to costs has enabled sustained reinvestment," he adds, "reinforcing a virtuous cycle of profitability and expansion."

On Monday, Rothschild Redburn initiated coverage of FAST with a Buy rating and a $55 12-month target price.

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Markets ended the first full trading week of July on a positive note, with all three main equity indexes posting gains on Friday. Investors, traders and speculators welcomed another hot initial public offering (IPO) as they look forward to the acceleration of earnings reporting season and new Fed Chair Kevin Warsh's first testimony on Capitol Hill since taking over at the world's most important central bank.

Materials stocks took the lead on Friday, as 10 of 11 sectors closed in the green. Tech stocks were higher, too, while Nvidia (NVDA, +4.0%) and Nike (NKE, +3.8%) were the top-performing Dow Jones stocks.

SK Hynix (SKHYV, +17.0%) started trading late in the morning and immediately popped to an intraday of $176.34, 18.3% above its IPO price. After raising $26.5 billion this week, SK Hynix now ranks among the biggest IPOs in U.S. history.

Financial stocks added more than 1%, with Bank of America (BAC, +0.7%), Citigroup (C, +0.7%), Goldman Sachs (GS, -0.1%), JPMorgan Chase (JPM, +0.3%) and Wells Fargo (WFC, +0.2%) scheduled to report second-quarter earnings before the opening bell next Tuesday.

By the closing bell, the Nasdaq Composite had added 0.3% to 26,281, finishing with a 1.7% weekly gain. The broad-based S&P 500 rose 0.4% on Friday and 1.2% for the week to 7,575. The blue-chip Dow Jones Industrial Average ticked up 0.3% to 52,673 but tracked back 0.5% over the five days.

What will Warsh tell Congress?

As Louis Navellier of Navellier & Associates foreshadows, next week is a big one for the earnings calendar: "We are locked and loaded for another earnings announcement season," Navellier writes, noting that valuations for "fundamentally superior stocks" are being compressed.

It's also a big one for the economic calendar: "I think it is safe to say that Fed Chairman Warsh is planning to turn the Fed inside out, streamline it and make it operate more efficiently," Navellier writes.

Warsh is scheduled to testify before the House Financial Services Committee on Tuesday and at the Senate Banking Committee on Wednesday.

As Navellier explains, Warsh is putting together five task forces to "re-examine how the central bank operates." The task forces will focus on AI, productivity and jobs; Fed communications; the Fed’s balance sheet, inflation and economic data.

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The front-month West Texas Intermediate crude oil futures contract was down 1.3% to $71.56 per barrel. WTI ticked up 4.2% this week, though markets' main concerns right now are top- and bottom-line growth and forward guidance.

At the same time, markets want to know from Warsh how the Fed will respond amid continuing uncertainty about energy prices, inflation and interest rates.

Note that the Bureau of Labor Statistics (BLS) will release the June Consumer Price Index (CPI) report less than two hours before Warsh testifies on Tuesday.

Upside for META stock

Meta Platforms (META, +6.2%) led S&P 500 stocks on Friday, as the Facebook and Instagram parent surged amid reports that it plans to enter the cloud computing market using its excess AI capacity and that it wants to build a new AI chip in partnership with Broadcom (AVGO, -0.3%).

Broadcom, which is not one of the Magnificent 7 stocks but is one of the top 10 companies in the world based on market cap, was up 11% this week, helped by confirmation by Apple (AAPL, -0.3%) that it will spend $30 billion for its own U.S.-made chips.

"Meta has been a significant beneficiary from the advances in AI by selling more ads at higher prices, which has driven significant revenue acceleration,” DA Davidson analyst Gil Luria observes. "It has not gotten credit because it has increased capex even more. If Meta slows down capex and starts monetizing it, we see significant upside to revenue and cash flow."

WD-40 stock was up 11% today

WD-40 (WDFC, +10.7%) made the case for mid-cap stocks on Friday, as management of the multiuse petroleum-based spray maker beat Wall Street expectations for its third quarter and raised guidance for the full year.

"We delivered an exceptional third quarter," CEO Steve Brass said in WD-40's earnings announcement (pdf), "with net sales increasing 24% and operating income increasing 47%, demonstrating the operating leverage inherent in our business model." Brass cited double-digit growth across WD-40's businesses, as well as "continued progress" in its "Must-Win Battles."

"While the cost backdrop remains fluid," a team of William Blair analysts led by Jon Andersen writes in a post-report note, "we believe in our thesis that WD-40 represents a singular and attractive business and investment opportunity."

Andersen & Co. reiterated their Overweight (Buy) rating, noting WD-40's "unique heritage, brand equity and product efficacy, geographic and channel reach, and go-to-market capabilities," as well as "superior organic sales growth" and "reliable free cash flow generation."

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Investors, traders and speculators faced fresh headwinds from Asia on Wednesday. President Donald Trump said the U.S. is "probably" going to launch additional attacks on Iran to retaliate for Islamic Revolutionary Guard strikes on three commercial tankers as they transited the Strait of Hormuz on Tuesday.

"I'll give them a little warning," Trump said from the sidelines of the NATO summit in Ankara, Turkey. "We're going to hit them hard tonight, but we'll see how it all works out."

The front-month West Texas Intermediate crude oil futures contract was up 5.2% to $74.09 per barrel after the president also threatened to reimpose a naval blockade at the key chokepoint for the global hydrocarbon market, but only for Iran.

"Look for cooler heads to prevail in coming days, with traffic returning to the Strait of Hormuz and Iran and the U.S. returning to the negotiating table," Mizuho Securities Director of Energy Futures Bob Yawger forecast.

Yawger expects negotiations to "drag on" over the next two months, "with both sides eventually agreeing on a weak deal that does not remove Iran's enriched uranium and possibly allows the Iranians to 'manage' the Strait of Hormuz."

Nvidia (NVDA, +3.7%), the leader of the AI revolution and the biggest company in the world based on market cap, trended higher through the day after gapping down at the opening bell.

The Nasdaq Composite rallied off its intraday low, and by the closing bell the tech-heavy index was up 0.2% at 25,870. But the broader S&P 500 declined 0.3% to 7,482, and the blue-chip Dow Jones Industrial Average fell 1.1% to 52,348.

Buffett's Berkshire portfolio gets an energy boost

Integrated oil and gas supermajor Chevron (CVX, +1.1%), which offers all of upstream (exploration and production), midstream (storage and transportation) and downstream (refining and retail) energy exposure, led the 30 Dow Jones stocks for much of Wednesday's trading session.

But Occidental Petroleum (OXY, +3.7%), one of the biggest North American E&P outfits, enjoyed a bigger bounce from renewed tension in the Middle East.

New Berkshire Hathaway (BRK.B, -1.8%) CEO Greg Abel sold CVX during the first quarter. But he held OXY in what is still basically Warren Buffett's stock portfolio.

Abel also engineered Berkshire's $9.7 billion acquisition of Occidental's chemical business that closed in January, and Berkshire remains the largest holder of the energy stock, with more than a quarter of OXY's outstanding shares.

Apple and Broadcom revive the tech trade

Chipmakers Samsung Electronics and SK Hynix led the Korea Composite Stock Price Index into "bear market" territory, broadly defined as a 20% decline from a recent all-time high.

The KOSPI reached its record closing high of 9,114 on June 22, but a 5.4% slide on Wednesday following Tuesday's 4.9% sell-off left it 20.5% below that peak at 7,246. Samsung was down 6.3%, SK Hynix 5.7%. The latter will start trading in the U.S. on Friday under the symbol SKHY.

Selling pressure on tech stocks generally eased with confirmation from Apple (AAPL, +0.9%) of a new silicon deal with Broadcom (AVGO, +4.8%) that extends their longstanding relationship into 2031.

The iPhone maker added meat to the bone by confirming a commitment of at least $30 billion "to design and produce custom silicon components and cutting-edge wireless connectivity technologies for a wide range of Apple products."

Take a few seconds to read the FOMC minutes

Like the policy statement summarizing the FOMC's most recent decision to hold the target range for the federal funds rate at 3.50% to 3.75%, the minutes from the June Fed meeting were a lot shorter than they used to be, by about 22% based on a crude word-count comparison.

This "communication breakdown" is actually a big part of the "regime change" promised by new Fed Chair Kevin Warsh.

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Warsh described a "family fight" about interest rates and the trajectory of inflation during his post-meeting press conference, and the minutes reveal a central bank still making decisions based on incoming data.

Brevity is catching on, though: "A number of participants noted that it was an opportune time to consider significant changes to the FOMC’s postmeeting statement," the June FOMC minutes reveal. "A majority of participants remarked that they saw advantages in shortening the statement."

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A practical way to think about artificial intelligence (AI) investing is to break down the value chain and identify bottlenecks, when demand exceeds available capacity.

These imbalances matter because companies controlling the constrained part of the ecosystem often gain pricing power and experience surging demand.

If you're an investor, you probably know by now about several bottlenecks emerging from the AI boom. Electricity demand, for example, has turned utility stocks into indirect AI plays because they generate and transmit the electricity that powers data centers.

Data-center demand leads data center supply right now, too, a trade expressed through certain real estate investment trusts (REITs) that own and lease these facilities to hyperscalers and enterprise customers.

The most obvious bottleneck, however, remains semiconductors. Modern computing is built on them, and AI systems require enormous quantities of advanced chips capable of handling parallel processing and large-scale data movement.

That said, the semiconductor industry itself is highly diverse. Some companies design chips, others manufacture them, while others focus on fabrication equipment, memory, networking or analog components.

Depending on which type of semiconductor company you own, you might be exposed to very different risks, ranging from geopolitical tensions and manufacturing bottlenecks to cyclical swings in consumer electronics demand.

If you're looking to capitalize on the broad drivers behind AI infrastructure spending, semiconductor ETFs can simplify the process of establishing more concentrated but still efficient exposure to chipmakers.

The types of semiconductor stocks

The semiconductor industry is a broad category with big variations between business models, risks and sources of revenue.

One of the most recognizable groups are chip designers, which develop architecture and intellectual property but often outsource manufacturing to third-party foundries. Examples include Nvidia (NVDA), Advanced Micro Devices (AMD) and Broadcom (AVGO).

Fabrication companies, or "fabs," manufacture chips at extraordinarily expensive and technology demanding foundries. Taiwan Semiconductor Manufacturing (TSM) is the dominant pure-play foundry, while Intel (INTC) both designs and manufactures chips through its integrated model.

Memory semiconductor companies specialize in products such as DRAM and NAND flash memory, critical for servers, AI accelerators, smartphones and data centers. Examples include SK Hynix and Micron Technology (MU).

Semiconductor equipment companies, which make the specialized tools and machinery needed to fabricate chips, sit even higher up the value chain. The standout company here is ASML Holding (ASML).

How we chose the best semiconductor ETFs

We began by excluding ETFs tied to single stocks, including leveraged long and inverse ETFs linked to companies such as Nvidia, along with covered call income variants advertising double-digit yields.

These products are ultimately tied to the fortunes of one company rather than the semiconductor industry, they cost more, they're more volatile and they're more complex, making them less suitable for the average long-term investor.

We also excluded leveraged, inverse and income-oriented semiconductor ETFs tied to the broader industry itself because of concerns around volatility, leverage decay and elevated fees.

That screening process narrowed the universe down to traditional semiconductor ETFs, either actively managed or index-tracking. From there, we imposed a maximum expense ratio of 0.35%.

We also applied several practical filters designed to improve the investor experience. First, we required ETFs to hold at least $100 million in assets under management.

Second, we screened for liquidity by focusing on each ETF's 30-day median bid-ask spread. To qualify, spreads needed to remain at or below 0.15%. This helps reduce implicit transaction costs when buying or selling shares.

The end result was a smaller group of semiconductor ETFs that combined broad industry exposure, reasonable fees, sufficient scale and adequate trading liquidity.

VanEck Semiconductor ETF

• Assets under management: $67.9 billion
• Expense ratio: 0.35%
• 30-day median bid-ask spread: 0.02%
• One-year annual return: 137.4%

By assets under management, the VanEck Semiconductor ETF (SMH) is the largest and most widely used semiconductor ETF on the market. Since debuting in December 2011, it's also been one of the strongest-performing ETFs, including a 36.9% annualized total return over the trailing 10 years.

SMH tracks the MVIS US Listed Semiconductor 25 Index, which focuses on the largest and most liquid semiconductor companies. The portfolio uses a market cap-weighted methodology, meaning larger companies receive larger allocations.

Historically, this approach has worked well for SMH. By allowing dominant large-cap stocks to appreciate without aggressively capping their weights, the ETF has fully benefited from the outsize gains generated by the industry's biggest winners.

That dynamic is most visible with Nvidia. The leader of the AI revolution accounts for more than 15% of SMH's portfolio. While this concentration has materially boosted returns, it also creates a meaningful degree of single-stock risk for new investors entering today.

Risk is another important consideration. Relative to the S&P 500, SMH carries a three-year beta of 1.93 and a three-year standard deviation of 30.5%. In practical terms, that means the ETF has historically been substantially more volatile than the broader stock market.

Still, for investors primarily seeking exposure to the largest and most influential semiconductor companies, and who are comfortable with a sizable NVDA allocation, SMH remains one of the purest and most liquid ways to express that view.

Learn more about SMH at the VanEck provider site.

VanEck Fabless Semiconductor ETF

• Assets under management: $280.5 million
• Expense ratio: 0.35%
• 30-day median bid-ask spread: 0.10%
• One-year annual return: 118.5%

The VanEck Fabless Semiconductor ETF (SMHX) exists because some semiconductor investors are uncomfortable with fabrication-related supply chain and geopolitical risk. Much of this concern is about Taiwan Semiconductor Manufacturing.

Taiwan's political status remains disputed under China's reunification policy, and investors periodically worry that geopolitical tensions in the region could disrupt semiconductor supply chains. Since many leading chip designers depend heavily on TSM fabrication capacity, this concentration risk has become an increasingly important consideration for the industry.

Fabrication businesses also tend to be highly asset intensive. Building and maintaining fabs requires enormous upfront capital expenditures, ongoing equipment upgrades and substantial energy and water usage. This can create margin pressure during downturns and increase operational risk.

To address investor demand for fabless exposure, SMHX focuses specifically on semiconductor companies that design chips but outsource manufacturing.

Compared with SMH, the portfolio composition looks materially different. According to ETF Research Center data, the overlap between SMHX and SMH is roughly 45% by weight across 10 holdings.

That means investors are either underweight or entirely excluding companies such as TSM, Intel, Micron, Texas Instruments (TXN), Analog Devices (ADI) and Lam Research (LRCX). In exchange, the ETF leans more heavily into designers and intellectual property-focused firms such as Broadcom, Arm Holdings (ARM) and Lattice Semiconductor (LSCC).

Since launch, SMHX has trailed SMH because fabrication-related companies have generally outperformed during the recent AI-driven semiconductor boom. Investors should still expect concentration risk, however. Nvidia remains roughly 13.9% of the ETF's assets, followed by Broadcom at 10.8%.

Learn more about SMHX at the VanEck provider site.

iShares Semiconductor ETF

• Assets under management: $39.0 billion
• Expense ratio: 0.35%
• 30-day median bid-ask spread: 0.02%
• One-year return: 164.6%

Most semiconductor ETFs are going to have substantial overlap because the industry itself is only so large. However, the weightings can differ materially depending on the benchmark index each ETF tracks.

That distinction becomes very apparent with the iShares Semiconductor ETF (SOXX), which competes directly against SMH while charging the exact same 0.35% expense ratio. SOXX is the older product, debuting in July 2001, though it remains somewhat smaller than SMH despite still managing tens of billions in assets.

The ETF tracks the NYSE Semiconductor Index, which holds 30 U.S.-listed semiconductor companies screened for liquidity and size. The major difference comes down to weighting methodology. Compared with SMH, SOXX spreads allocations more evenly across its largest holdings.

Instead of a very large overweight to Nvidia, the top positions are distributed more broadly among companies such as Micron Technology, Advanced Micro Devices, Broadcom, Intel and Nvidia itself. The portfolio is still concentrated overall, but the weighting structure reduces the risk of a single company completely dominating performance.

Another reason some investors might prefer SOXX relates to tax-loss harvesting. Because SOXX and SMH have similar historical performance, comparable fees and overlapping holdings, investors can potentially swap between them to realize capital losses without materially changing exposure.

Because the ETFs track different indices, an investor could theoretically sell one and immediately purchase the other without triggering the wash sale rule, avoiding the need to wait 31 days out of the market.

Learn more about SOXX at the iShares provider site.

State Street SPDR S&P Semiconductor ETF

• Assets under management: $3.4 billion
• Expense ratio: 0.35%
• 30-day median bid-ask spread: 0.15%
• One-year total return: 154.2%

The preceding semiconductor ETFs all use some variation of market-cap weighting, sometimes with additional adjustments for liquidity and free float. That approach has historically worked well in semiconductors because the industry exhibits a very large degree of performance dispersion.

Being able to identify the winner and allow it to compound into a larger position can materially boost returns. The downside is concentration risk.

Investors entering near the later stages of a semiconductor bull market can find themselves heavily exposed to a small number of companies. During downturns, that same concentration can amplify losses. A more balanced approach can be expressed through the State Street SPDR S&P Semiconductor ETF (XSD).

This ETF tracks the S&P Semiconductor Select Industry Index, an equal-weighted benchmark currently composed of 44 holdings. Equal weighting means each company receives roughly the same allocation regardless of whether it's a small-cap, midcap or large-cap semiconductor stock.

The portfolio is rebalanced quarterly, which systematically trims outperformers and reallocates capital toward laggards. In practice, this creates a "sell high, buy low" mechanism, and XSD's largest holdings are often the hottest chip stocks.

However, those weights aren't permanent. At the next quarterly rebalance, stronger-performing holdings will be trimmed back toward equal allocations, while laggards will be added to.

This structure can appeal to investors seeking lower concentration risk and broader exposure across the semiconductor ecosystem. The trade-off is that it limits the ability of major winners to compound into outsized positions.

Over the trailing 10-year period, XSD still delivered an impressive 29.8% annualized total return, though it lagged more concentrated ETFs such as SMH because the largest winners weren't allowed to run.

Still, past performance doesn't predict future results. For investors more concerned about excessive dependence on a handful of megacap chipmakers, XSD might be a more balanced way to gain semiconductor exposure.

Learn more about XSD at the State Street Investment Management provider site.

Invesco PHLX Semiconductor ETF

• Assets under management: $2.5 billion
• Expense ratio: 0.19%
• 30-day median bid-ask spread: 0.03%
• One-year total return: 157.4%

Investors might have noticed that most of the previous semiconductor ETFs charge a 0.35% expense ratio. That's largely a function of how industry-specific ETFs have historically been priced.

A major reason for this is the influence of State Street Investment Management, which built one of the largest lineups of industry ETFs in the market. Over time, 0.35% effectively became the standard pricing level investors grew accustomed to paying for specialized industry exposure.

Some ETF providers, however, have attempted to compete more aggressively on fees. In semiconductors, one of the lowest-cost options currently available is the Invesco PHLX Semiconductor ETF (SOXQ), which charges a 0.19% expense ratio.

For a $10,000 investment, that translates into roughly $19 annually in fee drag vs approximately $35 for many competing semiconductor ETFs.

SOXQ tracks the PHLX Semiconductor Sector Index, which holds 30 of the largest U.S.-listed semiconductor companies. The index is rebalanced quarterly in March, June, September and December, with a full annual reconstitution each September.

Rebalancing and reconstitution are related but different processes. Rebalancing adjusts the weights of existing holdings back toward the index methodology, while reconstitution determines which companies are added to or removed from the index entirely based on eligibility rules.

Like SOXX, SOXQ is materially less concentrated than SMH, but it achieves this without relying on the equal-weighted structure used by XSD. The portfolio's largest holdings include Nvidia, Micron Technology, Broadcom and Intel, with each remaining at or below roughly a 10% portfolio allocation.

Learn more about SOXQ at the Invesco provider site.

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The main equity indexes opened comfortably higher Tuesday but quickly erased these early gains amid escalating geopolitical tensions. A bearish reversal in chip stocks created headwinds, too, as market participants sought out more defensive plays.

The blue-chip Dow Jones Industrial Average, broader S&P 500 and tech-heavy Nasdaq Composite were each roughly 1% higher out of the gate today, but were staring at stiff losses by lunchtime. At the close, the Dow was up 0.2% at 50,872, but the S&P 500 was 0.3% lower at 7,386, and the Nasdaq was off 1% at 25,678.

Sentiment took a hit after President Donald Trump said Iran shot down a U.S. military helicopter and that "the United States must, of necessity, respond to this attack."

Trump's post on Truth Social temporarily caused oil prices to spike, but front-month West Texas Intermediate crude futures finished the session down 3.4% at $88.20 per barrel after Energy Secretary Chris Wright told CNBC that traffic through the Strait of Hormuz is "rising very meaningfully."

Fear gauge spikes, defensive stocks see upside

Evidence of investors' skittishness was seen in the Cboe Volatility Index (VIX) Tuesday, with the market's "fear gauge" jumping 5% to 19.86.

Gains in several defensive sectors, including real estate (+2.1%), healthcare (+1.3%) and consumer staples stocks (+1.0%) also signaled a more cautious stance from market participants.

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J. M. Smucker (SJM, +10.4%) was the best S&P 500 stock today as the packaged-food maker's better-than-expected earnings and revenue for its fiscal fourth quarter offset its forecast for declining revenue in its new fiscal year.

Ahead of SJM's earnings report, UBS Global Research analyst Peter Grom reiterated a Buy rating on the defensive stock, saying the company's "setup remains among the best in the group as SJM will likely underwrite on-algorithm bottom-line growth for fiscal 2027, a rarity relative not only to Packaged Food peers but also across our whole Staples universe."

And while Grom expected weaker top-line guidance, he noted that "investors view SJM's portfolio as more immune to the ongoing challenges across the industry."

Micron's sell-off is an "opportunity," says UBS

Only two of the 11 S&P 500 sectors finished in the red today — technology (-1.8%) and energy (-1.6%). But given that the S&P 500 and Nasdaq are weighted by market capitalization rather than price as is the Dow, the selling in mega-cap tech stocks had an outsize impact.

Several of Wall Street's trillion-dollar stocks, including Nvidia (NVDA, -0.2%), Apple (AAPL, -3.6%) and Broadcom (AVGO, -1.1%) closed lower.

Memory chipmaker Micron Technology (MU), which catapulted north of a $1 trillion market cap late last month, also finished in the red, shedding 1.4%. Shares are now down more than 13% since June 3, but Wall Street isn't worried.

Indeed, MU remains one of analysts' top-rated S&P 500 stocks. Of the 44 analysts covering the tech stock tracked by S&P Global Market Intelligence, 39 say it's a Buy or Strong Buy, four have it at Hold and one says Sell. This works out to a consensus Strong Buy rating.

UBS Global Research analyst Nicolas Gaudois on Monday reiterated his Buy rating and $1,625 price target — representing implied upside of nearly 75% to current levels.

Gaudois says Micron's recent sell-off creates an "opportunity" for investors, as "checks point to continuing upside in demand [for memory chipmakers], not downside, which is likely to persist on agentic AI demand."

What to expect from the May CPI report

The war in Iran and semiconductor volatility are top of mind for Wall Street this week, but market participants will also be watching Wednesday morning's release of the May Consumer Price Index (CPI).

Energy prices have soared in recent months as a result of the conflict in the Middle East, which has caused recent inflation readings to come in hot and erased any expectations for rate cuts this year.

According to CME Group FedWatch, futures traders don't expect any rate cuts at all in 2026. Earlier this year, betting odds were for at least one quarter-point cut.

The Federal Open Market Committee may even consider rate hikes this year, writes David Payne, staff economist and reporter for The Kiplinger Letter, in the Kiplinger inflation outlook. "The Fed generally discounts energy price fluctuations in its deliberations on interest rate policy. But the central bank will also note that 'core' inflation (excluding food and energy) is likely to creep upwards as the year progresses," he explains.

The May CPI report hits one week before the Fed — now led by Chair Kevin Warsh — issues its latest policy decision. Economists expect headline inflation to be up 4.3% year over year, which would be the highest annual increase since April 2023.

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Stocks opened higher across the board Monday as chips stocks rebounded from Friday's drubbing. But while the tech-heavy Nasdaq Composite and the broader S&P 500 held their gains through the close, the blue-chip Dow Jones Industrial Average was not so resilient.

At the close, the Nasdaq was up 0.9% at 25,929 and the S&P 500 was 0.3% higher at 7,405. The Dow, on the other hand, was down 0.2% at 50,786.

On Friday, a broad sell-off in semiconductor stocks weighed down the three main equity benchmarks, with the Nasdaq incurring its biggest one-day drop in over a year.

"The AI-fueled tech rally got a bit of a reality check last week, but after nine straight up weeks, the market was arguably due for at least a reset," says Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley. "The fact that Friday's strong jobs report appeared to add fuel to the selling indicates the market could be even more focused on inflation going forward."

And while Larkin says Friday's sharp losses did not "derail the rally," it does suggest market participants are "more sensitive to negative surprises in the near term."

This makes the Wednesday morning release of the May Consumer Price Index (CPI) an even bigger economic calendar event than usual, because recent hot inflation readings have erased any expectations for rate cuts this year.

According to CME Group FedWatch, futures traders don't expect any rate cuts at all in 2026. Earlier this year, betting odds were for at least one quarter-point cut.

The Federal Open Market Committee may even consider rate hikes this year, writes David Payne, staff economist and reporter for The Kiplinger Letter, in the Kiplinger inflation outlook. "The Fed generally discounts energy price fluctuations in its deliberations on interest rate policy. But the central bank will also note that 'core' inflation (excluding food and energy) is likely to creep upwards as the year progresses," he explains.

Wednesday's inflation date hits one week before the Fed — now led by Chair Kevin Warsh — issues its latest policy decision.

Intel, Micron lead chip rebound

Chip stocks created the biggest buying pressure to start the week, rebounding after disappointing Broadcom's (AVGO, +2.8%) guidance sparked an industry-wide meltdown.

Intel (INTC, +11.2%) and Micron Technology (MU, +9.9%) were the best-performing S&P 500 stocks Monday, followed closely by KLA Corp. (KLAC, +9.3%).

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Meanwhile, Marvell Technology (MRVL), which will join the S&P 500 ahead of the June 22 open — replacing Pool (POOL, -2.5%) — surged 9.6%.

S&P Global also announced that data center solutions firm Flex (FLEX, -0.7%) will replace The Campbell's Company (CPB, -0.9%) on the S&P 500, effective June 22.

Apple slips as WWDC kicks off

Not all tech stocks were higher to start the week. Apple (AAPL), for one, dropped 1.9% as the iPhone parent kicked off WWDC 2026, its annual developers conference.

In addition to unveiling new child safety features for parents and its latest operating systems, the company also gave a highly anticipated update to its artificial intelligence strategy.

For one thing, Apple is rebranding Siri as "Siri AI" and it will use Apple Intelligence to become "a profoundly more capable assistant," said Mike Rockwell, VP of engineering at Apple.

The company also announced new ways users can utilize Apple Intelligence, including fixing insecure passwords and analyzing videos taken with the Home app.

Earlier this year, Apple said that it signed a multi-year agreement with Alphabet's (GOOGL, -1.4%) Google to use its Gemini AI model to power Siri and Apple Intelligence.

Wedbush analyst Dan Ives thinks Apple's AI initiatives will be a game-changer for the Dow Jones stock.

"We strongly believe this will be the start of AI monetization period of the Apple ecosystem as the company will continue lay the foundation through its new operating system updates across mac, iOS, iPad, and others with its iOS 27 update," Ives writes in a June 4 research note.

And the company's AI monetization efforts "will ultimately add $75 to $100 to Apple stock and that is not being factored into the current multiple in our view," he says. "We see a golden path ahead for Apple in this AI era … it starts at WWDC."

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All three main equity indexes closed lower on Friday, as the AI trade unwound a little more in the wake of weak guidance from a major chip player. Meanwhile, a much stronger-than-expected nonfarm payrolls report sapped almost all hope for lower interest rates this year.

The front-month West Texas Intermediate crude oil futures contract was down 2.9% to $90.32 per barrel on Friday but rose 3.4% this week. The U.S. and Iran are in a stalemate in the Middle East, and the Strait of Hormuz remains closed, with Saturday marking 100 days since the war began on February 28.

Broadcom (AVGO, -7.9%) was a big drag on two of the main equity indexes again in the aftermath of the semiconductor stock's underwhelming guidance, the Roundhill Magnificent 7 ETF (MAGS, -3.8%) posted a steep loss and Nvidia (NVDA, -6.2%), the leader of the AI revolution, finished down more than 6% amid a sea of red for tech.

At the closing bell, the Nasdaq Composite was down 4.2% for the day and 4.7% for the week at 25,709. The broad-based S&P 500 had shed 2.6% to 7,383, finishing the five days with a loss of 2.6%.

The Dow Jones Industrial Average hit another new all-time high on an intraday basis early in the session but finished down 1.4% at 50,866. The index of blue chip stocks finished the week lower by 0.3%.

Hot jobs report sends rates higher

The May jobs report was a lot stronger than expected, which is generally good news for consumers and the broader economy. But it's bad news for investors, traders and speculators who want to see lower interest rates.

The 2-year Treasury yield, the market's measure of the Fed's intentions for the federal funds rate, ticked up to 4.16% from 4.049% on Thursday and 4.014% on Friday, May 29.

The 10-year Treasury yield, considered a broad measure of the economy but also the basis for the cost of corporate debt and auto loans, rose to 4.542% from 4.477% on Thursday and 4.453% last Friday.

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New Fed Chair Kevin Warsh might be able to do several things to change the central bank right now, but it looks like he won't be able to cut interest rates as soon as President Donald Trump would like. The next Fed meeting, for what it's worth, runs from June 16-17.

IBM leads the Dow lower

International Business Machines (IBM, -5.6%) was the three worst-performing Dow Jones stock on Friday, sliding again after posting losses of 7.2% on Wednesday and 1.3% on Thursday. Big Blue was up 7.6% on Monday and 2.7% on Tuesday, hitting a new 52-week high of $332.46 intraday, after management announced a $10 billion investment in quantum computing over the next five years.

IBM traded at its 52-week low of $212.34 intraday on May 13, so it's a 56.6% bottom-to-top run in about two and half weeks that's being digested.

As Wedbush analysts Matt Bryson and Antoine Legault explain, IBM is focused on building a "fault-tolerant" quantum computer by 2029, IBM Quantum Starling. Its planned investment is "another validation of quantum technology's potential."

"While we view IBM's 2029 goal as the de facto industry standard at this point (with most vendors targeting 2029/2030 for quantum equivalency)," the analysts write, "the scale of capital and a dedicated domestic foundry arguably give IBM's goal more weight than a standalone roadmap slide."

IBM was also named a partner for Nvidia's Vera Rubin AI accelerators.

TTAN is a blue-collar tech stock

ServiceTitan (TTAN, +4.1%) is definitely a tech stock according to S&P Global Market Intelligence, but it makes software for plumbers, electricians and other blue-collar tradespeople. That distinction hasn't exempted it from the existential crisis for software stocks in 2026.

But a team of Morgan Stanley analysts led by Josh Baer sees TTAN as a "Top Pick" based on a "clean beat" for fiscal first-quarter results, including gross transaction volume, revenue, margins and free cash flow. Full-year guidance was ahead of Wall Street's forecast, too.

The analysts reiterated their Overweight (Buy) rating and raised their 12-month target price from $118 to $124 after ServiceTitan reported earnings on Friday.

As Baer and his colleagues note, growth accelerated for ServiceTitan. Meanwhile, artificial intelligence and its opportunity in the commercial space "expand the story," the fiscal 2027 setup "looks attractive," and TTAN's valuation "remains compelling."

At the same time, the analysts write, ServiceTitan is "well positioned for AI," based on ownership of "vast proprietary data sets serving as a moat." It also "enjoys current and future potential for high market share to yield large installed bases into which it can sell its AI solutions."

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Stocks got off to a rocky start Tuesday, but another day of strong gains for tech stocks lifted all three main equity indexes higher into the close. Energy stocks also gave a boost to the broader market as oil prices climbed for a second straight day.

At the close, the blue-chip Dow Jones Industrial Average was up 0.5% at 51,307, the broader S&P 500 added 0.1% to 7,609, and the tech-heavy Nasdaq Composite gained 0.03% to 27,093 — new all-time highs.

Meanwhile, amid no new headlines regarding the war in Iran, front-month West Texas Intermediate crude futures rose more than 1% to settle at $93.69 per barrel.

This helped boost several energy stocks, including Chevron (CVX, +0.9%) and Exxon Mobil (XOM, +0.1%).

Jensen Huang calls Marvell the "next trillion-dollar" stock

Marvell Technology (MRVL) was the best-performing S&P 500 stock today, surging 32.5% after Nvidia (NVDA, -0.7%) CEO Jensen Huang said he believes the chipmaker will be the "next trillion-dollar company."

Speaking at the Computex 2026 AI exhibition, Huang said that Marvell's networking and computing chips are essential to connecting all the pieces across data centers.

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"We've distributed and disaggregated computing so that it runs across these enormous clusters, so that we could get aggregating the total compute, the total memory, the total bandwidth that we have, and what makes it possible is connectivity," Huang added.

In late March, MRVL shares surged after Nvidia disclosed a $2 billion stake in the semiconductor stock — and longer term, it's up nearly fourfold in the past 12 months. But its current market cap is just above $254 billion, meaning its share price would need to quadruple to reach that $1 trillion mark.

Alphabet sinks on $80 billion stock offering

Not all AI stocks were higher today, though. Alphabet (GOOGL), which is technically a communication services stock, slumped 3.9% after the Google parent said it will raise $80 billion through an equity offering to fund its AI capital expenditures budget for this year and next.

GOOGL also said that it will sell $10 billion of Class A common stock and Class C capital stock (ticker: GOOG) to Berkshire Hathaway (BRK.B) at a discount to where both are currently trading.

"Alphabet intends to use the net proceeds from the concurrent underwritten public offerings and the concurrent private placement for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute," the company explained in its press release (PDF).

In April, Alphabet raised its 2026 capex guidance to $180 billion to $190 billion and said it expects its 2027 spending to reach similar levels.

Alphabet's announcement "is raising concerns about high AI-related expenses against the backdrop of uncertain profitability profiles," says José Torres, senior economist at Interactive Brokers. However, he notes that "strengthening confidence in a solid economy is countering those concerns."

JOLTS comes in higher than expected

One such sign of a stable economy came in the form of this morning's Job Openings and Labor Turnover Survey (JOLTS), which showed 7.6 million job openings in April — the highest level since May 2024 and more than economists expected.

The report from the Bureau of Labor Statistics (BLS) also showed that hires and separations both declined by roughly 400,000 in April.

"The sharp jump in job openings, combined with declining separations, points to robust employer demand for labor," write Raymond James economists. "This reinforces our view that the labor market is on track for further strength this year following last year's weakness."

The JOLTS data arrived ahead of this Friday's release of the May jobs report, which is expected to show the U.S. added between 75,000 and 85,000 new jobs last month.

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Stocks were choppy Monday as market participants weighed a continued rise in tech stocks against reports that a potential peace plan in the Middle East is in peril.

Wall Street is also looking ahead to Friday's key jobs report — the first of Kevin Warsh's stewardship at the Federal Reserve — which lands two weeks before the June Fed meeting.

Nvidia (NVDA, +6.3%) wowed Wall Street over the weekend, with the artificial intelligence (AI) bellwether unveiling a new processor chip for PCs. The new superchip, RTX Spark, will integrate designs from Arm Holdings (ARM) — sending its shares soaring 15.7% to start the week.

Fellow Dow Jones stock Microsoft (MSFT, +2.3%), who Nvidia is collaborating with on its new chip, also climbed on the news, while chipmaker Intel (INTC, -4.7%) slumped.

BofA Securities analyst Vivek Arya reiterated his Buy rating on NVDA following its appearance at the 2026 Computex AI exhibition this weekend and said it remains a top pick.

"Overall, we see a continued strengthening of NVDA's systems moat and expanding [its] serviceable addressable market from GPU racks to CPUs, networking/optics, storage/security, enterprise software and now personal AI PC," says Arya.

Trump responds after Iran calls off peace plan, shuts Strait of Hormuz

The big rally in the technology sector helped the tech-heavy Nasdaq Composite (+0.4% to 27,086), the broader S&P 500 (+0.3% to 7,599), and the blue-chip Dow Jones Industrial Average (+0.09% to 51,078) close at new record highs, but gains were contained on revamped geopolitical worries.

Iranian media reported on Monday that Tehran will stop negotiating with the U.S. via intermediaries and will close the Strait of Hormuz in reaction to Israel's military attacks on Lebanon, which it says are ceasefire violations.

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President Donald Trump attempted some damage control this afternoon, posting on Truth Social that talks with Iran "are continuing, at a rapid pace," and noting that after talking with Israel's prime minister, Benjamin Netanyahu, "there will be no Troops going to Beirut."

Still, oil prices took a notable jump higher to start the week, with front-month West Texas Intermediate crude futures climbing more than 5% to settle at $92.16 per barrel.

Berkshire unveils its latest big buy

Elsewhere on Wall Street, Taylor Morrison Home (TMHC) surged 22.3% after Berkshire Hathaway (BRK.B, -0.9%) said it would buy the homebuilder for $72.50 per share — a 24% premium to its May 29 close.

The all-cash deal, which represents an enterprise value of roughly $8.5 billion, will combine Taylor Morrison with manufactured homebuilder Clayton Homes, which Berkshire bought in 2003, to create a top-five U.S. builder by volume.

UBS Global Research analyst John Lovallo views the acquisition as "a strong vote of confidence in the mid-long term outlook for the homebuilding industry, including what we estimate to be a market that is underbuilt by roughly 7 million units."

The transaction is expected to close in the second half of this year.

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The main stock indexes struggled for big gains on Wednesday, though a positive showing suggests investors, traders and speculators are generally in a "risk on" mood amid optimism about the long-term durability of the market's major theme. The geopolitical landscape is still rocky, but the earnings environment remains healthy.

The White House rapid response team described a draft peace plan that was reported by Iranian state TV and would open the Strait of Hormuz as a "complete fabrication" and "not true." At the same time, President Donald Trump told PBS News that Iran won't get relief from economic sanctions in exchange for its highly enriched uranium. "No, no, not at all. Not sanctions relief, no," the president answered when PBS asked about the status of a key point in negotiations to end the war.

The front-month West Texas Intermediate crude futures contract traded as low as $87.17 per barrel and closed down 4.7% for the day at $89.47. WTI traded as high as $119.48 on March 9, its intraday peak during the war in the Middle East.

The 2-year Treasury yield, a market-based gauge of short-term policy on interest rates, was down 1.7 basis points to 4.033% today vs 4.05% on Tuesday. The 10-year Treasury yield, a starting point for mortgage rates and corporate bonds, fell 1.4 basis points to 4.447% from 4.491%.

At the closing bell, the blue-chip Dow Jones Industrial Average was up 0.4% at 50,644, the broad-based S&P 500 had added 0.02% to 7,520, and the tech-heavy Nasdaq Composite was up 0.07% at 26,674.

Goldman sets year-end target of 8,000 for the S&P 500

Meanwhile, Goldman Sachs strategists raised their year-end target for the S&P 500 to 8,000 from 7,600. "Continued earnings growth should drive continued equity market upside," the strategists write. "The increased return forecast reflects increased estimates for S&P 500 earnings following an exceptionally strong first-quarter reporting season."

The Russell 2000 Index of small-cap stocks closed lower but has added more than 17% year to date vs a gain of about 10% for the S&P 500 amid enduring appetite for riskier companies. Consumer discretionary stocks and consumer staples stocks were the top two sectors on Wednesday, both groups posting gains of greater than 1%.

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Technology and energy stocks joined financials and utility stocks in the red. Nvidia (NVDA, -1.1%) was one of three Magnificent 7 stocks to post a loss, joining Microsoft (MSFT, -0.8%) and Alphabet (GOOGL, -0.01%).

Amazon.com (AMZN, +2.5%), Apple (AAPL, +0.8%), Meta Platforms (META, +3.7%) and Tesla (TSLA, +1.6%) were up for the day.

Honeywell's Quantinuum files for an IPO

Honeywell (HON, -0.07%) was among 10 Dow Jones stocks in negative territory after its majority-owned subsidiary Quantinuum submitted paperwork to the Securities and Exchange Commission for an initial public offering (IPO).

Quantinuum plans to sell approximately 21.1 million shares at $45 to $50 per share, for estimated proceeds of $941.7 million at the midpoint of the offering and $1.09 billion if underwriters exercise their full allotments.

Quantinuum plans to list on the Nasdaq under the symbol QNT. Its market cap, assuming the IPO proceeds as expected, would approach $13 billion, making it the biggest pure-play quantum computing offering of 2026.

Quantinuum was founded in 2021 through the merger of Honeywell Quantum Solutions and UK-based startup Cambridge Quantum. Its customers include Amgen (AMGN, +0.03%) and JPMorgan (JPM, -2.5%).

Honeywell is Quantinuum's biggest shareholder, at approximately 54%. Other strategic investors include Amgen and JPMorgan, as well as Mitsui (MITSY, -4.2%) and Nvidia.

Zscaler has execution issues

Zscaler (ZS, -31.5%) was a major drag on Nasdaq-100 ETFs and mutual funds after management reported expectations-beating fiscal 2026 third-quarter results but underwhelmed Wall Street with its forward guidance.

Wedbush analyst Dan Ives says it's a matter of execution at the company level and not a sign of bigger problems for the AI boom. "We believe ZS is a premier name to own as increased enterprise AI adoption further amplifies the need for zero-trust architecture," Ives observes in a post-earnings analysis.

Ives reiterated his Overweight (Buy) rating but cut his 12-month target price for the cybersecurity stock from $300 to $220. "Overall, ZS needs to show better execution to get out of the investor penalty box," the analyst concludes.

Indeed, Zscaler says conservative estimates for the fourth quarter and the full year are about the departure of two sales executives.

"We already appointed a replacement for one of these leaders, and we are in the late stages of hiring a leader for the other role," management explained. "However, we are taking a prudent approach to our guidance during the transition."

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All three main equity indexes gapped up on Friday morning and rallied into the weekend, even as oil prices and bond yields remain elevated. There's a new leader in charge at the most important central bank in the world. And the oldest of those main stock indexes just hit another new high.

At the closing bell, the Dow Jones Industrial Average was up 0.6% at 50,579, a fresh all-time closing high. The Dow was up 2.1% for the week.

The broad-based S&P 500 rose 0.4% to 7,473, ending the week with a gain of 0.9%. The tech-heavy Nasdaq Composite added 0.2% to 26,343, rising 0.5% vs last Friday.

The front-month West Texas Intermediate crude futures contract settled at $96.93 per barrel, down 0.02% for the day and 8.1.% for the week.

The yield on the 2-year Treasury, seen by investors, traders and speculators as an indicator of short-term policy direction for the Fed, closed the week at 4.123% vs 4.087% on Thursday and 4.084% last Friday.

Kevin Warsh is officially the Fed chair

Kevin Warsh was sworn in as Fed chair during a ceremony at the White House on Friday, with President Donald Trump watching his nominee take the oath of office with major questions about inflation and the trajectory of the federal funds rate front of mind for markets.

It's the first time a president has observed the swearing in of a Fed chair since Ronald Reagan and Alan Greenspan in 1987.

"President Trump chose Kevin Warsh to run the Federal Reserve to secure the lower interest rates he has demanded for the past year," Nick Timiraos of The Wall Street Journal observes. "A suddenly pressing question is whether Warsh would have political cover to do the opposite and raise them."

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Merck leads the Dow

Merck (MRK, +5.6%) was the top-performing Dow Jones stock on Friday after its China-based partner Kelun-Biotech announced positive Phase III trial results for a new cancer drug.

A combination of Kelun-Biotech's sacituzumab tirumotecan, or sac-TMT, and Merck's Keytruda reduced the risk of tumor progression by 65% in lung cancer patients.

CEO Robert Davis emphasized Merck's efforts to build a "patent wall" during the drugmaker's first-quarter conference call, as Keytruda nears the end of its exclusivity period in 2028. That includes new indications as well as new combinations.

The healthcare stock sagged after reaching its 52-week high of $125.14 on February 25, but stabilized after management reported a narrower-than-expected loss and raised full-year guidance on April 30.

Astera Labs leads the chips

From its most recent all-time closing high on May 11 through May 21, the iShares Semiconductor ETF (SOXX, +2.4%) was down 1.5%. Nvidia (NVDA, -1.9%), the biggest stock in the world by market cap, was basically flat.

But Astera Labs (ALAB, +3.0%) was up 43.6%. The tech stock was up 31.9% this week after Evercore ISI analyst Mark Lipacis reiterated his Outperform (Buy) rating and raised his 12-month target price for ALAB from $215 to $297.

The analyst cited recent channel checks showing AI data center capex budgets will emphasize inference infrastructure in the second half of 2026.

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Stocks were choppy Thursday, but the main indexes muscled into positive territory in mid-afternoon trading and stayed there through the close. Market participants kept a close eye on oil prices and Treasury yields, which stabilized after volatile price action early on, and panned earnings reports from blue-chip bellwethers Nvidia (NVDA) and Walmart (WMT).

At the close, the Dow Jones Industrial Average was up 0.6% at 50,285, the S&P 500 was 0.2% higher at 7,445, and the Nasdaq Composite had gained 0.09% to 26,293.

Helping lift stocks into the close were retreating oil prices. Front-month West Texas Intermediate crude futures hit an intraday high of $102.66 per barrel, but finished the session down nearly 2% at $96.35 after President Donald Trump said earlier that negotiations with Iran to end the war in the Middle East are in the "final stages."

Treasury yields also eased back from intraday highs. The yield on the 2-year Treasury topped out at 4.117% on Thursday before settling at 4.062%. Similar action was seen on the 10-year and 30-year Treasury yields.

Nvidia, Walmart drop after earnings

It's been a busy week for blue-chip earnings and the latest results were poorly received. Nvidia, for one, fell 1.8% today even after the artificial intelligence (AI) chipmaker reported better-than-expected fiscal first-quarter results and gave stronger-than-anticipated guidance.

Kyle Rodda, senior financial market analyst at Capital.com, says this was "a garden variety beat — a better than expected top and bottom line with guidance above the Street estimate — and one that was well telegraphed following the very strong results from AI-hyperscalers earlier in the earnings season."

The company also unveiled an $80 billion addition to its stock buyback program and hiked its quarterly dividend from 1 cent to 25 cents per share.

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Walmart was another Dow Jones stock that closed lower after earnings, sinking 7.3% on Thursday.

While the world's largest retailer beat on the top and bottom lines for its fiscal 2027 first quarter, its second-quarter and full-year forecasts came in below the Street's estimates.

"I think higher tax returns muted some of the pressure related to higher fuel prices and as we're in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices," Chief Financial Officer John David Rainey told CNBC. "It's something that we’re keeping a close eye on, but that expectation is built into our guidance for the second quarter."

IBM soars 12% on Trump administration's quantum computing stake

At the other end of the Dow was International Business Machines (IBM), which jumped 12.5% on reports the Trump administration will award the tech giant $1 billion as part of a broader investment in quantum-computing firms.

IBM CEO Arvind Krishna has said the company's quantum-computing segment could generate billions of dollars in revenue over the next decade — and this goal is likely to get a push from the Trump administration's investment.

Big Blue is "in the early innings of unlocking benefits at the crossroads of AI and quantum," says Wedbush, and this funding will allow for "a more stable pathway to advance quantum computing developments."

Intuit spirals 20% on layoff news

Elsewhere in the tech space, Intuit (INTU) shares plunged 20% after the financial software firm said it is laying off 17% of its workforce. CEO Sasan Goodarzi said the decision "was not about AI," but rather to streamline the company to make it more efficient and effective.

Intuit also reported its fiscal third-quarter results, which came in higher than expected. However, revenue from the company's TurboTax segment just missed estimates for the three-month period that encompassed tax season.

The "7% year-over-year TurboTax growth came in well below expectations, adding fuel to bear concerns around AI-related disruption as pressure was most pronounced among price-sensitive DIY filers," says UBS Global Research analyst Taylor McGinnis.

The analyst reiterated her Neutral (Hold) rating on the tech stock "given increased uncertainty around the growth trajectory," and lowered her price target to $360 from $440.

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Stocks notched their first win of the week on Wednesday as Treasury yields and oil prices pulled back. Market participants also took an optimistic stance ahead of tonight's quarterly results from AI bellwether Nvidia (NVDA), which could help set the tone for the broader market's short-term price action.

After surging to their highest levels in roughly a year, bond yields took a breather today. The yield on the 2-year Treasury bond fell 7.8 basis points to 4.044%, with the yields on the 10-year (-9.3 basis points to 4.576%) and 30-year (-6.5 basis points to 5.116%) Treasury bonds also declining.

Meanwhile, front-month West Texas Intermediate crude futures dropped more than 5% to $98.26 per barrel.

These declines had a positive impact on the stock market, with the blue-chip Dow Jones Industrial Average adding 1.3% to 50,009, the broader S&P 500 rising 1.1% to 7,423, and the tech-heavy Nasdaq Composite climbing 1.5% to 26,270.

Nvidia was one of 22 Dow Jones stocks that gained ground today, adding 1.3% ahead of its after-the-close earnings release. You can follow all the latest NVDA news on our live earnings blog.

But it was Goldman Sachs (GS, +5.8%), Nike (NKE, +4.2%) and Boeing (BA, +3.3%) that ended the day at the top of the 30-stock index.

Analysts are bullish on one of Berkshire's newest stocks

Over on the S&P 500, United Airlines (UAL) and Delta Air Lines (DAL) were on the leaderboard, rising more than 9% apiece.

DAL made waves after last Friday's close when it was revealed that Berkshire Hathaway (BRK.B, +0.09%) initiated a position in the air carrier in the first quarter. According to regulatory filings, the holding company bought 39.8 million shares of Delta in Q1, making the industrial stock the 14th-largest position in the Berkshire Hathaway equity portfolio.

But Berkshire's not the only one bullish on Delta. Of the 26 analysts following the stock who are tracked by S&P Global Market Intelligence, 25 say it's a Buy or Strong Buy and just one rates it at Sell. This works out to a consensus Strong Buy recommendation.

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Speaking for the bulls is Susquehanna analyst Christopher Stathoulopoulos, who has a Positive (Buy) rating on DAL.

"We view DAL's '3Ds' (diversified, durable, and differentiated) as core to the carrier's ability to navigate what could be a new (mid-term) norm — a volatile macro and geopolitical backdrop," he wrote in a recent note.

TJX pops after earnings, Target drops

Elsewhere on the S&P 500, TJX (TJX) rose 5.7% — its best day since August 21, 2024 — after the off-price retailer reported earnings.

"TJX results were incredibly strong this quarter, beating and raising in every category and underscoring the durability of its off-price model," says Brian Mulberry, chief market strategist at Zacks Investment Management. "These results allow for expansion plans to continue globally as TJX looks to continue to capture more market share."

The retail stock remains a top pick on Wall Street. The consensus recommendation among the 21 analysts covering TJX who are tracked by S&P Global Market Intelligence is Strong Buy.

Target (TGT, -3.9%), on the other hand, scores a consensus Hold recommendation. Following this morning's first-quarter beat and upwardly revised guidance, CEO Michael Fiddelke warned about the near-term operating environment, "with consumers weighing multiple headwinds and tailwinds and recent dips in consumer sentiment."

"While consumers have proven to be resilient so far, sentiment has been declining recently, and we're keeping a close eye on their spending behavior," added Chief Financial Officer Jim Lee on the earnings call.

And even with the retailer's impressive Q1 numbers, David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, feels "that Target will still be expected to slash prices and spend billions on store and supply chain upgrades, which compresses its profit margins and leaves it with low growth prospects compared to its rivals."

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Stocks opened lower and drifted higher through the middle of the trading session on Tuesday, but all three main equity indexes faded into the closing bell as global bond yields continued to rise. Investors, traders and speculators will turn their attention to Wednesday's post-closing-bell Nvidia earnings event to gauge the health of the market's major trend.

Both the 30-year and 10-year Treasury yield hit 52-week highs, reaching 5.197% and 4.687%, respectively, while the 2-year Treasury yield ticked up to 4.112% from 4.09% on Monday.

Meanwhile, the front-month West Texas Intermediate crude oil futures contract dipped 0.1% to $104.29.

By the closing bell, the tech-heavy Nasdaq Composite was down 0.8% at 25,870, the broad-based S&P 500 was off 0.7% at 7,353, and the blue-chip Dow Jones Industrial Average was down 0.7% at 49,363.

Nvidia is down a day ahead of earnings

Nvidia (NVDA, -0.8%), which will report fiscal 2027 first-quarter results after the closing bell on Wednesday, "will help set the tone for a stock market that is in need of its next catalyst after an incredible run since the March lows," Granite Bay Wealth Management Chief Investment Officer Paul Stanley writes.

You can keep up with developments and analysis on the latest Nvidia news in our live earnings blog.

As Stanley sees it, that "next catalyst" is critical now, with the market "a bit tired" after a recent strong run but also facing "renewed worries" about inflation and interest rates.

"Investors need some reassurance that the AI story is still alive and well," he explains, "and that the company is producing enough revenue growth to back up its elevated valuation."

Stanley expects Nvidia to justify expectations, "which is just what the stock market is looking for." Indeed, as the CIO concludes, "Nvidia's presence is unavoidable in this market."

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Has Agilysys recovered its footing?

Agilysis (AGYS, +12.5%) was one of those tech stocks that got hammered earlier this year as markets priced in the threat artificial intelligence (AI) represented to companies that write code for a living.

AGYS was down 40.9% year-to-date through Monday's close. Then management reported expectations-beating fiscal 2026 Q4 earnings, on top of its 17th straight quarter of record revenue. Management guided to fiscal 2027 revenue of $365 million to $370 million vs a Wall Street forecast for $363.59 million.

"The business has begun a noticeable uptrend in CY26 that should continue throughout FY27," Oppenheimer analyst Brian Schwartz writes. "The strengthening business momentum is visible with top-line and EBITDA growth accelerating in F4Q26." The analyst reiterated his Outperform (Buy) rating and raised his 12-month target price from $90 to $100, citing "a strong beat-and-guide-above in F4Q26."

Schwarz notes that AGYS already carries premium multiples relative to other small-cap stocks and mid-cap stocks in the software industry. "But," he concludes, "if the company keeps beating-and-guiding above, similar to F4Q26, then the stock should keep working."

Home Depot rises on beat-and-reiterate report

Home Depot (HD, +0.9%) was among nine of 30 Dow Jones stocks to post gains on Tuesday after it reported fiscal 2026 first-quarter revenue and earnings that exceeded Wall Street estimates. Management also reaffirmed full-year guidance. HD traded up as much as 1.1% intraday before fading into the closing bell.

Rising fear of inflation is having little impact on the big box home improvement retailer's top line right now. "Our first quarter results were in line with our expectations," CEO Ted Decker said. "The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure."

At the same time, HD hasn't exactly lit up the total return scoreboard lately, with the consumer discretionary stock down more than 12% so far in 2026 and more than 19% over the trailing 12 months.

"To us this indicates that HD continues to bounce along the bottom despite macro headwinds related to housing specifically and the consumer more broadly," D.A. Davidson analyst Michael Baker observes. "These include higher rates, higher gas prices and a return to inflationary trends in general."

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All three main indexes opened higher Monday, but only one was in positive territory at the close. Tech stocks were the biggest decliners as bond yields continued to climb, while energy stocks outperformed as oil prices jumped to their highest level since early April.

At the close, the tech-heavy Nasdaq Composite was down 0.5% at 26,090 and the broader S&P 500 was off 0.07% at 7,403. The blue-chip Dow Jones Industrial Average was up 0.3% at 49,686.

Front-month West Texas Intermediate crude futures, meanwhile, climbed roughly 3% to settle at $108.66 per barrel.

"The stock market is coming to the sudden realization that new Fed Chair Kevin Warsh may need to raise rates rather than lower them, and the market hates that," says Richard Reyle, chief investment officer at Questar Capital Partners. "Right now, the bond market is repricing this and rates are drifting higher, which comes just as the hyperscalers enter their most capital-intensive spending cycle, which raises worries about their ability to keep funding this spending."

The CIO says that if bond yields continue to climb, the tech sector's leadership could be threatened. This is because higher interest rates mean future profits are worth less, which is bad news for tech companies whose valuations are based on tomorrow's earnings.

Today, the yield on the 2-year Treasury climbed above the 4.10% level for the first time since June 2025 before ending down 2.8 basis points at 4.056%. The 10-year Treasury yield hit 4.631% — its highest mark since May 2025 — before settling at 4.597%, up 0.2 basis point on the day.

Seagate CEO issues dire warning

Rising bond yields weren't the only headwind tech stocks faced today. Market participants also reacted to a dire warning from Seagate Technology (STX) CEO Dave Mosley.

The executive was asked earlier today at a JPMorgan conference what the data storage specialist could do to meet rising demand for memory chips, which are key to the artificial intelligence (AI) data center buildout.

"If we took the teams off and started building new factories or bringing up new machines [to increase unit capacity], that would just take too long," Mosley said. "You would end up with more capacity, but then you'd slow the rate of growth on that technology."

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The answer only amplified Wall Street's fear that chip production won't be sufficient — and sent STX down 6.9% today.

Nvidia drops ahead of earnings

Nvidia (NVDA) also closed lower today, falling 1.3% ahead of the AI chipmaker's Wednesday afternoon turn on the earnings calendar.

"We fully expect the leading supplier of AI silicon will again exceed estimates and guide above Street given continued positive data points through Q1 as well as 1) healthy 2026 AI infrastructure spend (that we believe likely continues through 2027), and 2) superior supply chain certainty in a period plagued by constraints," says Wedbush analyst Matt Bryson.

The real question, Bryson believes, is whether "we finally see a more positive stock reaction after a series of blasé moves following solid prints."

We're covering all the latest Nvidia news in our live earnings blog.

NextEra Energy drops on $67 billion M&A news

Utility stocks were also lower on Monday after news that NextEra Energy (NEE, -4.6%) will buy Dominion Energy (D, +9.4%) in an all-stock deal valued at roughly $67 billion.

If approved by regulators, the merger will create the country's largest electricity producer, serving 10 million customer accounts in Florida, the Carolinas and Virginia.

"If successful, the deal could result in one of the largest mergers in the power industry," says Mizuho Securities analyst Anthony Crowdell. "The acquisition would give NextEra access to the PJM [Pennsylvania-New Jersey-Maryland] market, and potentially signals NextEra moving beyond renewables-heavy to include an all-form shop."

The transaction is expected to close in the next 12 to 18 months.

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