Stocks opened lower Thursday and stayed in negative territory through the close. Weighing on sentiment today were bouncing Treasury yields. A disappointing round of retail earnings didn't help, either.

The main equity indexes snapped a three-day losing streak on Wednesday as bond yields fell following the Treasury Department's announcement that it will increase buybacks of longer-dated debt.

But yields on the 10-year Treasury (+5.1 basis points to 4.704%) and the 30-year Treasury (+5.4 basis points to 5.248%) resumed their climb today after a report released late Wednesday showed U.S. debt has crossed the $40 trillion mark.

Rising yields pressured the stock market, with the tech-heavy Nasdaq Composite closing down 1.0% at 26,067, the broader S&P 500 falling 0.9% to 7,641, and the blue-chip Dow Jones Industrial Average dropping 1.3% to 52,759.

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Walmart has its worst day in four years on same-store sales miss

Walmart (WMT) was the worst Dow Jones stock today, sinking 9.2% — its worst day since May 16, 2022.

Ahead of the open, WMT reported better-than-expected fiscal 2027 second-quarter earnings of 81 cents per share on revenue of $187.9 billion, but same-store sales growth of 2.6% fell short of what Wall Street anticipated.

The company also gave soft fiscal third-quarter guidance, even as it raised its full-year outlook.

"Walmart is not losing market share — contrary to what I heard after Target's earnings — in fact, the company continues to gain share across income tiers, driven by higher-income consumers seeking value," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.

Wagner adds that the same-store sales miss was a result of "non-competitive factors" such as lower prescription drug prices, an ongoing shift toward e-commerce and delivery services, and "persistent cost pressures that prompted thousands of selective price cuts to aid budget-conscious shoppers."

The portfolio manager believes the blue chip stock's post-earnings pullback should be viewed as a buying opportunity.

Advance Auto Parts plummets after earnings

Fellow retailer Advance Auto Parts (AAP) also sold off sharply, falling 24.6% — its worst day since May 31, 2023 — after its turn on the earnings calendar. While the auto parts chain reported higher-than-expected earnings of $1.03 per share, revenue of $2 billion came up short of what analysts were calling for.

AAP also said same-store sales were down 0.5% from the year-ago period. "Total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter," explained Advanced Auto Parts CEO Shane O'Kelly in the earnings release.

Deere jumps to the top of the S&P 500 after earnings

Not all of the day's earnings reactions were negative. Deere (DE) jumped 6.9%, making it one of the best S&P 500 stocks today, after the farm equipment manufacturer reported fiscal third-quarter earnings of $5.10 per share on revenue of $11 billion.

Wall Street anticipated earnings of $4.70 per share on revenue of $10.73 billion.

DE also raised the low end of its full-year net income forecast to $4.75 billion from $4.5 billion.

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Stocks snapped their three-day losing streak Wednesday after the Treasury Department stepped in to stabilize the bond market. A big rally in healthcare stocks also helped support the broader market, though upside was contained as several mega-cap tech stocks struggled.

The Treasury Department this morning said it will "at least double" the size of its buybacks for government bonds, from $2 billion to a minimum of $4 billion. The increase will begin September 9 and run through November 4, and "reflects Treasury's desire to provide greater liquidity support in longer-dated nominal sectors," according to a press release.

"Long-term Treasury yields had been under upward pressure amid uncertainty in interest rates, inflation, and the growing federal deficit," explains Tony Miano, global investment strategy analyst at Wealth & Investment Management at Wells Fargo.

The news sent the 10-year Treasury yield down 6.7 basis points to 4.639%, while the 30-year Treasury yield, which hit a 19-year high earlier this week, plummeted 10 basis points to 5.185%.

But while the Treasury Department's announcement provides short-term relief, Miana does not believe it changes the outlook for long-term yields. "The key drivers behind rising yields … remain in place," he says. "Until investors gain greater clarity on those issues, risks to long-term Treasury yields remain skewed to the upside."

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As for stocks, the blue-chip Dow Jones Industrial Average rose 0.2% to 53,463, the broader S&P 500 gained 0.2% to 7,707, and the tech-heavy Nasdaq Composite added 0.2% to 26,331.

Merck, Moderna stocks soar on positive cancer drug data

Merck (MRK) was easily the best Dow Jones stock today, surging 12.6% — its best day since 2009 — after a new mRNA skin cancer treatment jointly developed by the drugmaker and Moderna (MRNA) met its goals in a late-stage study when paired with MRK's Keytruda.

"This represents the first positive Phase 3 readout for an individualized neoantigen therapy (INT) and for an mRNA-based cancer therapy, as well as the first Phase 3 study to demonstrate a clinically meaningful improvement over KEYTRUDA alone, a standard-of-care immunotherapy, in the adjuvant setting for patients with resected melanoma," Merck stated in a news release.

MRNA shares surged 177% today, marking the large-cap stock's biggest one-day gain ever. It's also the first time since 2008 that an S&P 500 stock doubled in one day, according to Dow Jones Market Data. The news also lifted several vaccine makers, including Novovax (NVAX, +10.8%) and BioNTech (BNTX, +22.0%).

Target pops after earnings

Elsewhere on Wall Street, Target (TGT) jumped 4.3% after the retailer reported a beat-and-raise quarter.

TGT's fiscal second-quarter earnings received a $1.65 per-share boost from tariff refunds, while its comparable store sales came in at a better-than-expected 3.8%.

"The headline for Target was in the increased traffic [that] led to a strong jump in same store comps," says Brian Mulberry, chief market strategist at Zacks Investment Management. "These are metrics that they have needed to meet to demonstrate that their turnaround is working and operations are getting better."

Mulberry adds that this is a "meaningfully positive quarter for Target," but the retailer now needs "to show consistency and [that] this was not a one-off success."

Marvell outperforms on Google news

While several mega-cap tech stocks, including Broadcom (AVGO, -4.6%) and Advanced Micro Devices (AMD, -3.7%), closed lower Wednesday, Marvell Technology (MRVL) rose 9.9% after the chip designer expanded a deal with Alphabet's (GOOGL, +0.2%) Google.

The agreement builds on a partnership between the two companies to build new custom artificial intelligence chips and gives Google the option to buy up to $12.2 billion in MRVL stock over time if it purchases large amounts of chips.

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Stocks closed lower for a third straight session Tuesday as market participants fretted about sky-high bond yields and the ongoing war in Iran. A sell-off in chip stocks also weighed on sentiment.

At the close, the blue-chip Dow Jones Industrial Average was down 0.2% at 53,343, the broader S&P 500 was 0.7% lower at 7,691, and the tech-heavy Nasdaq Composite was off 1.3% at 26,289.

Treasury yields also finished the day lower, but not before the 30-year yield hit a fresh 19-year intraday high.

Bond yields are rising even as the recent batch of soft inflation and jobs data lowers the odds of a September rate hike, says Daniela Hathorn, senior market analyst at Capital.com.

"Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital — including debt issuance associated with the AI investment boom," she explains. "That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates."

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Higher oil prices are only adding to this inflation risk. Today, front-month West Texas Intermediate crude futures rose 0.5% to $84.94 per barrel after President Donald Trump said there are currently no talks happening between the U.S. and Iran and no plans to start them.

Bond yields weigh on chip stocks

Tech stocks were a notable area of weakness on Tuesday, due in part to higher borrowing costs. Semiconductor stocks, in particular, took a beating, with the iShares Semiconductor ETF (SOXX) slumping 5.0% as fund heavyweights Nvidia (NVDA, -2.3%), Micron Technology (MU, -7.0%) and Advanced Micro Devices (AMD, -4.3%) sold off.

Chip stocks have rebounded in recent weeks, with SOXX rising nearly 11% for the month to date through Monday's close following a 21% drop in July.

Housing data disappoints

Higher borrowing costs are also weighing on the housing market, as evidenced by today's economic data.

According to the Census Bureau, housing starts fell 12.5% from June to July, to a lower-than-expected 1.24 million. This is down 13.5% year over year.

Separate data from the National Association of Realtors showed pending home sales fell 2.3% from June to July, hitting their lowest level since January.

"Housing disappointed in July," says Bill Adams, chief U.S. economist at Fifth Third Commercial Bank. "The big headwind from high mortgage rates looks likely to persist into 2027."

Adams adds that buyers also have more options right now as folks who delayed selling their homes when mortgage rates started rising "are gradually accepting the new normal and listing their homes, providing buyers more options outside of new construction."

Home Depot takes aim at Amazon

Home Depot (HD, -0.1%) Chief Financial Officer Richard McPhail called out "frozen housing conditions" in the home improvement retailer's earnings call this morning.

"While consumer uncertainty and housing affordability continue to pressure demand for larger home improvement projects, we remain focused on what we can control, our strategy of driving our core and culture, delivering a frictionless interconnected experience and winning the Pro," explained McPhail.

In its fiscal second quarter, Home Depot said its Pro segment outperformed DIY (do-it-yourself) and posted positive comparable store sales. Total comparable store sales for the company rose 1.7% in Q2 — the biggest increase since 2022 and higher than the 0.9% rise Wall Street anticipated. Earnings and revenue also beat expectations.

The comparable store sales number was impressive, says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, but his attention is more focused on the retailer's three-hour delivery announcement.

"Home Depot announced it's launching express delivery nationwide, promising orders within three hours or less," Wagner explains. "It's a direct shot at Amazon/Walmart-style speed competition, aimed at capturing the 'I need this part now to finish the project today' pro and DIY customer — a use case where Home Depot has a structural edge (2,300+ stores close to where people live) that pure e-commerce players can't easily match."

With big-ticket renovations still on hold due to higher mortgage rates, Wagner says this move echoes the broader theme of the quarter: "Home Depot is leaning hard into speed and convenience to win the smaller, more frequent project spend that's currently driving growth."

Klarna sinks 23% after earnings

Elsewhere on the earnings calendar, Klarna (KLAR) plunged 22.8% after the buy now, pay later firm reported earnings.

While KLAR beat on the top and bottom lines for its second quarter, it lowered its full-year outlook for gross merchandise volume (GMV) — a key metric for fintechs — due to "a more measured view of European volumes in the second half, particularly in Germany, our largest market by volume," the company said.

Klarna also said its chief financial officer and chief marketing officer will step down early next year.

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The main equity indexes were down after a low-volume late-summer trading session on Monday, as the uncertainty of war in the Middle East outweighed the certainty of solid earnings and revenue growth. Investors, traders and speculators are pulling back bets on rate hikes after cooler-than-forecast July consumer inflation and retail sales data. But the bond market continues to reflect longer-term concerns.

President Donald Trump urged Iran to "put up the white flag of surrender" in a pre-opening bell phone conversation with Fox News, during which he also threatened to bomb Oman if it "gets in the way" of U.S. negotiations to open the Strait of Hormuz.

"The number one Goal is, and always will be, that Iran cannot have, in any way, shape, or form, a Nuclear Weapon," Trump posted on Truth Social at around the same time. "I have no time schedule," a multitasking Trump told Fox News. "I'm not in a hurry."

The front-month West Texas Intermediate crude oil futures contract was higher by 2.5% to $84.45 per barrel. WTI declined to $67.04 intraday on July 2, just above its pre-war closing price of $67.02 on February 27 and vs a 52-week high of $119.48 on March 19.

The 2-year Treasury yield rose from 4.171% on Friday to 4.182% today, though the indicator of short-term Fed intentions has come down about 20 basis points from a 52-week high of 4.377% on July 24.

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The 10-year Treasury yield ticked up to 4.724% from 4.696% on Friday, and the 30-year Treasury yield was up from 5.266% to 5.310%, reaching a new 19-year high in the process.

By the closing bell, the blue-chip Dow Jones Industrial Average was down 0.5% to 53,459, the broad-based S&P 500 had lost 0.5% to 7,745, and the tech-heavy Nasdaq Composite was off 0.3% to 26,644.

How healthy are earnings

Most of the S&P 500 has already reported, and results from the earnings calendar are good. Indeed, as Ritholtz Wealth Management research associate Matt Cerminaro calculates, the overall year-over-year earnings growth rate is tracking to 32.2%.

In the aftermath of an unexpected decline in retail sales in July, reports from Home Depot (HD, -0.2%) tomorrow morning and Walmart (WMT, -0.8%) on Thursday morning will offer more color about the state of the consumer.

Still, as Cerminaro notes, 10 sectors are expected to report earnings growth, and eight are expected to post double-digit growth. And that bottom-line growth rate: "Talk about running it hot," Cerminaro says. "That number is on fire."

Indeed, all 11 stock market sectors defined by S&P Global are on track to grow revenue, with an overall annual rate for the S&P 500 of 15.4%, the strongest rate since the fourth quarter of 2021.

That's not all: "These companies are crushing estimates, raising guidance, and their stock prices are following suit. It's exactly what you want to see in a healthy bull market."

Why AMZN can hit $500

Amazon (AMZN, -0.5%) has had only a so-so 2026 so far. The e-commerce giant, cloud computing juggernaut and bellwether consumer discretionary stock posted a total return of 13.8% through Friday vs 14.5% for the S&P 500.

AMZN is trading around $260 today, up from around $230 at the end of 2025. According to Morgan Stanley analyst Brian Nowak, there's reason to believe the stock could hit $500 by the end of 2027, most notably on the opportunity for Amazon Web Services.

"We can debate the long-term margins of a GenAI enabled AWS," Nowak writes, "but if AMZN management's comments on AI tracking toward similar margins and returns as core cloud are in the right ballpark, this likely implies ~30% EBIT margins."

According to Nowak, that means about $1 trillion of AWS revenue and approximately $300 billion AWS EBIT (earnings before interest and taxes) over the next eight to 10 years. "Layering in reasonable Retail assumptions, this would imply AMZN is set to generate approximately $500 billion of EBIT in 2034-2036 … and that company wide EBIT could CAGR at a 16-20% rate."

The analyst reiterated his Overweight (Buy) rating, as well as his $335 12-month target price. Even from Nowak's "base case," there's about 29% of upside from here for AMZN.

What made SNDK pop again

Sandisk (SNDK, +8.9%) was the hottest of S&P 500 stocks on Monday in the aftermath of a warmly received "investor day" presentation last Thursday highlighted by management's long-term guidance, as well as an ambitious stock buyback plan.

As Bernstein analyst Mark Newman reports, management of the memory device and solution provider forecast mid- to high-teens volume growth and stable pricing through fiscal 2030. "The company also guided long-term gross margin around 80%," Newman writes, "which was better than expected."

Sandisk also announced that 100% of free cash flow (FCF) will be returned to shareholders and hinted that most, if not all, of this FCF will be used to buy back shares.

"Using even the most conservative of estimates for free cash flow," Newman says, "Sandisk can buy back 47% of shares outstanding in the next four years of free cash flow generation at current share prices."

Newman reiterated his Overweight (Buy) rating and his $3,000 12-month target price for SNDK.

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After overseeing a major housecleaning of Berkshire Hathaway's (BRK.B) equity portfolio in his first three months as CEO, Greg Abel followed up with a sizable shift in capital deployment during Q2.

Although Berkshire was a net buyer of equities for the first time after 14 straight quarters of easing up on stocks, the company revealed no flashy new positions or big additions in a Securities and Exchange Commission (SEC) filing on August 14.

True, Berkshire purchased another $10 billion worth of stock in Google parent Alphabet in a private placement. The deal, disclosed in a June 1 statement, boosted its holdings of Class A shares (GOOGL) by 45% and Class B shares (GOOG) by more than 650%.

At 9.4% of Berkshire's U.S. equity portfolio value, GOOGL is now the company's fourth-largest position. The Class B shares, at 3.2% of the portfolio, are now the firm's 10th-largest holding. Berkshire initiated its stake in the tech giant in the third quarter of 2025.

Separately, Berkshire closed its $6.8 billion acquisition of the U.S. homebuilder Taylor Morrison in July.

Abel oversees the Berkshire Hathaway equity portfolio, although Buffett keeps his hand in and plays a key advisory role. That said, times have changed.

The company added one new stock to its holdings in Q2 — D.R. Horton (DHI) — but then it has bought and sold the homebuilder several times in the past. And while Berkshire boosted stakes in some existing positions, both new and old, it also continued to pare back on some legacy holdings.

Interestingly, Berkshire cut back on some investments in the financial sector, including long-time Buffett favorite Bank of America (BAC).

But before we get to the stocks Berkshire Hathaway bought and sold in the second quarter, let's take a look at the bigger capital picture. In addition to being a net buyer of stocks for the first time in more than two years — the conglomerate made $19.8 billion in purchases vs $3.7 billion in sales — it also repurchased $4.5 billion of its own stock. That's Berkshire's largest quarterly buyback since 2021. Furthermore, it bought back another $3.3 billion in July.

Some folks have criticized Berkshire for not putting its cash hoard to work. Well, Abel appears to have answered them. Berkshire's cash holdings are still gargantuan, but they did fall to $365 billion in the second quarter from a record $380 billion at the end of Q1.

With a market cap of $1 trillion, Berkshire still maintains a sort of barbell portfolio of approximately $325 billion in stocks and the aforementioned $365 billion in cash.

Before we get into Berkshire's most recent buys and sells, it's important to know that Berkshire has always run a highly concentrated portfolio.

Excluding the company's Japanese brokerage stocks and other overseas equities, Apple (AAPL) alone accounts for more than a fifth of Berkshire's stock portfolio. (That's down from more than 40% at its peak.)

Furthermore, Berkshire's top five U.S. equity holdings comprise about 68% of its portfolio value, while the top 10 account for 88%.

As Buffett likes to say, diversification is for those who don't know what they're doing.

Stocks that Berkshire is buying

Buffett famously avoided airlines for decades. When he finally did come around, his timing was terrible, spreading his bets among a handful of major carriers not too long before COVID-19 set the industry into a tailspin. As a result, he quickly closed out those positions.

So it's a mark of change that Berkshire upped its stake in Delta Air Lines (DAL) by 44% in Q2 after initiating the position just three months earlier. The company bought another 17.5 million shares, bringing its total holdings to more than 57 million. With a market value of $5.4 billion at the end of Q2, the air carrier is now Berkshire's 13th-largest holding.

In another move in the homebuilder industry, Berkshire increased its positions in Lennar Class A (LEN) and Class B (LEN.B) stock, by 30% and 25%, respectively. At 0.4%, LEN is the company's 18th-largest investment. LEN.B, at less than 0.1%, is essentially immaterial.

Meanwhile, Berkshire added to two recent additions to its investments. It boosted its stake in The New York Times Co. (NYT) by almost 4%, while more than doubling its position in Macy's (M). NYT accounts for about 0.4% of the portfolio, while M sits at less than 0.1%. Although it's nice to have the imprimatur of Berkshire Hathaway, these are not needle-moving investments for a trillion-dollar company.

Stocks Berkshire is selling

In a reprise from previous quarters, Berkshire once again sold some Bank of America stock, which has been a major holding since 2017. It's too soon to panic, though. Berkshire reduced its investment in the nation's second-largest bank by assets by less than 6%. BAC is still a top-five holding, although GOOGL did replace it at No. 4.

Elsewhere, Abel pared back on supermarket operator Kroger (KR), reducing the position by 22%. At 0.7% of the portfolio value, KR drops to Berkshire's 16th-largest holding from 12th at the end of Q1.

In the financial sector, Berkshire eased up on investments in Ally Financial (ALLY) by almost 7%, while slicing its position in Capital One Financial (COF) by 58%. ALLY accounts for just 0.4% of Berkshire's U.S. equity portfolio, while COF amounts to 0.2%.

Lastly, Berkshire reduced exposure to Nucor (NUE) by 52%. NUE now accounts for about 0.1% of the portfolio, or the firm's 24th-largest position. In the only exit, Berkshire sold its entire stake in Constellation Brands (STZ), a position it initiated in the final quarter of 2024. At less than 0.1% of the portfolio prior to the liquidation, STZ was immaterial.

The bottom line on Berkshire's holdings

Abel continues to remake Berkshire's portfolio, and the way it deploys capital, in his own image. Big bets on tech are in favor, and he's doubling down on some recent investments, such as Macy's and The New York Times Co. Berkshire also clearly likes exposure to homebuilders.

At the same time, Abel is reducing exposure to several legacy investments and less material names. While the portfolio remains top-heavy, its concentration is now weighted more to its largest 10 holdings, with less exposure to the top five.

It's a new era, indeed.

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Stocks finished the week on a negative note as market participants sifted through the latest batch of earnings and economic reports. And while the blue-chip Dow Jones Industrial Average closed lower for the week, the broader S&P 500 and tech-heavy Nasdaq Composite extended their weekly win streaks to three.

At today's close, the Dow was staring at a one-day decline of 0.2% at 53,732, the S&P 500 was off 0.2% at 7,785, and the Nasdaq was 0.3% lower at 26,729.

Despite Friday's quiet finish, the three main equity indexes are near record highs — and they remain "in something of a sweet spot for now," says Daniela Hathorn, senior market analyst at Capital.com.

This week's soft inflation data has diminished the threat of a Federal Reserve rate hike, Hathorn explains, while earnings remain supportive.

B. Riley says to buy the dip on hot AMAT stock

Applied Materials (AMAT) was the biggest name on the earnings calendar, though the chip equipment maker shed 5.1% after reporting its fiscal third-quarter results late Thursday.

AMAT beat on the top and bottom lines and gave fiscal fourth-quarter guidance that beat the Street's estimates. But B. Riley analyst Craig Ellis says some investors may have been hoping for greater near-term gross margin upside.

Gross margin tells you how much revenue a company keeps after deducting costs required to make its products or services. AMAT said it expects fiscal Q4 gross margin to be flat on a quarter-to-quarter basis, at 50.4%.

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But Ellis believes today's post-earnings pullback represents a buying opportunity on a company poised for "high-visibility EPS expansion." He has a Buy rating on AMAT and a $700 price target, representing implied upside of nearly 40% on a stock that's already doubled for the year to date.

Next week, we'll start to hear from some of the country's biggest retailers, including Home Depot (HD, -0.8%), which reports on Tuesday. Walmart (WMT, -0.4%) takes its turn on the earnings stage Thursday morning.

Retail sales unexpectedly fall

Ahead of these key updates on consumer spending, data from the Census Bureau this morning showed that retail sales unexpectedly fell 0.6% in July. Economists expected a 0.1% increase.

The University of Michigan's Consumer Sentiment Index also fell short of estimates, with August's preliminary reading sinking to 51.0 from July's 55.2.

"A colossal double miss on retail sales and consumer sentiment is worrying investors, who fear that affordability pressures, dwindling savings and reduced hiring could mean the economy's engine is on its last legs," says José Torres, senior economist at Interactive Brokers.

The disappointing data follows "stronger tax refunds that were providing relief to personal wallets," he adds, and "with that source of fiscal stimulus behind us, market participants are rightfully concerned about the potential for further deterioration in consumer momentum."

Reddit will join the S&P 500 on Tuesday

Elsewhere on Wall Street today, Reddit (RDDT) popped 12.6% after S&P Global said the social media platform will join the S&P 500 ahead of the open this Tuesday, August 18.

RDDT will replace AvalonBay Communities (AVB, +0.1%), which is merging with fellow real estate investment trust (REIT) Equity Residential (EQR, 0.0%).

"Stocks tend to get a lift from inclusion in the S&P 500 because many trillions of passive dollars are held in products that track the index," explains Kiplinger contributor Dan Burrows.

The Vanguard 500 Index Fund (VOO), the largest exchange-traded fund (ETF) in the world, has $1.7 trillion in assets under management — and is just one of many funds that will now have to buy shares in RDDT.

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Stocks opened higher again Thursday thanks to another encouraging inflation update, but finished off their session highs as market participants parsed a fresh batch of corporate earnings reports. Still, the three main indexes finished in positive territory — one at a new record high — as chip stocks extended their recent rebound.

Ahead of the opening bell, the Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI), which measures what businesses pay suppliers for goods, was unchanged from June to July and was 4.7% higher year over year.

Core PPI, which excludes volatile food and energy prices, rose 0.2% month over month and was up 4.2% over the past 12 months.

The results were softer than economists expected and follow Wednesday's in-line July Consumer Price Index (CPI) report.

"The PPI data combined with what we know about CPI tells us that the Fed's preferred inflation metric, the core personal consumption expenditures index, continues to run closer to 3% rather than 2%," says Sonu Varghese, chief macro strategist at Carson Group.

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This means the Federal Reserve still has an inflation problem, Varghese explains, "but the recent softness likely strengthens the case for doves on the committee who want to wait things out."

According to CME Group FedWatch, futures traders are currently pricing in a 65% probability the central bank keeps the federal funds rate unchanged at its September meeting — up from 45% one week ago.

Cisco Systems sinks after earnings

The Dow Jones Industrial Average lagged its peers on Thursday, finishing up 0.1% at 53,839, as Cisco Systems (CSCO) slumped 8.4% — its worst day since February — after earnings.

The networking equipment specialist reported higher-than-expected fiscal fourth-quarter results and gave upbeat fiscal 2027 first-quarter guidance.

But UBS Global Research analyst David Vogt believes investor focus has shifted to Cisco's full-year forecast, "particularly the implied gross margin and the anticipated revenue deceleration from more than 20% growth in F1Q to the low double digits in H2:27, largely because of tougher comparisons."

Profit-taking could also be responsible for Cisco's sharp decline today. Heading into Thursday's session, the Dow Jones stock had surged 67% in the past six months.

Regardless of the reason, Vogt sees "any share-price weakness as an attractive buying opportunity."

Chip stocks send the S&P 500 to a new high

Elsewhere on Wall Street, the S&P 500 rose 0.7% to 7,798 — a new record closing high — and the Nasdaq Composite climbed 0.8% to 26,803, as several chip stocks extended their recent rebound.

Sandisk (SNDK), for one, soared 13.7% today, and is now up 26% for the month to date. And Micron Technology (MU) jumped 4.2% to bring its August gain to nearly 16% so far. In July, SNDK plunged 31.6% and MU fell 16.4%.

Workday stock trading halted on takeover chatter

Workday (WDAY) was another tech stock that saw notable gains on Thursday, closing up 17.8% after intraday trading was temporarily halted on reports that Silver Lake is in talks to buy the human resources software company.

According to Reuters, the private equity firm's proposed buyout of Workday, which had a market value of $43.7 billion at Tuesday's close, could be among the biggest software buyouts ever.

WDAY shares fell 16.8% in 2025 and were down 18.4% for the year to date through the August 12 close.

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Stocks opened higher Wednesday thanks to a tame inflation report. A reinvigorated AI trade, courtesy of several well-received earnings reports, kept equities mostly higher into the close, with one of the three main indexes nearing a new record high.

The broader S&P 500 finished up 0.3% at 7,748 — just shy of last Friday's all-time closing high of 7,757.67 — and the tech-heavy Nasdaq Composite added 0.5% to 26,588. The blue-chip Dow Jones Industrial Average turned lower in the final minutes of the session, finishing down 0.04% at 53,770.

Things got off to a solid start this morning after the Bureau of Labor Statistics (BLS) said the Consumer Price Index (CPI) rose 0.1% from June to July and was up 3.4% year over year.

This matched economists' expectations, while the 12-month rate rose at a slower pace than June's 3.5% increase.

Cooling energy prices had a positive impact on headline inflation, but even core CPI, which excludes volatile food and energy costs, was mild. Core inflation rose 0.2% month over month and was 2.5% higher year over year. This compares to June's flat monthly reading 2.6% annual increase.

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"For the Federal Reserve, this is a helpful report rather than an all-clear," says Daniela Hathorn, senior market analyst at Capital.com. "Inflation is moving in the right direction despite the earlier energy shock, while recent weakness in the labor market gives policymakers even less reason to consider another rate increase in September."

But inflation remains above the Fed's 2% target, Hathorn adds, meaning the central bank "is unlikely to declare victory yet, especially after Kevin Warsh was adamant to point out his focus on making sure that high inflation does not become detrimental to the U.S. economy."

Still, the July CPI report lowered expectations that the Fed will hike rates next month. According to CME Group FedWatch, futures traders are now pricing in a 60% chance the central bank will keep the federal funds rate unchanged next month — up from 52% one day ago.

Super Micro, CoreWeave stocks soar on earnings

Well-received earnings reports from several artificial intelligence companies also lifted sentiment on Wednesday.

Super Micro Computer (SMCI), for one, was the best S&P 500 stock today, surging 19% after the AI server, software and infrastructure company disclosed higher-than-expected fiscal fourth-quarter earnings and gave strong fiscal 2027 first-quarter guidance.

"We added several hundred enterprise and other customers in the past year, generated more than $60 billion in new orders, and booked record backlog entering fiscal 2027," said Super Micro Computer CEO Charles Liang in the press release.

CoreWeave (CRWV), meanwhile, jumped 19.3% after the AI cloud platform said second-quarter revenue more than doubled year over year — and that it expects more of the same in Q3.

"We believe CRWV is positioned to capture meaningful share of an AI cloud provider market growing at a server-melting pace, and we continue to see growing demand for CRWV's platform," says Mizuho Americas analyst Gregg Moskowitz.

However, the analyst cautions that the AI stock's risk/reward is "somewhat balanced given some ongoing uncertainty about the magnitude of CRWV's revenue upside over the near term."

Nebius pops 34% after earnings

While Wednesday's gains for Super Micro and CoreWeave stocks are certainly impressive, Nebius Group (NBIS) emerged as the day's hottest stock — popping 34.1% after the AI cloud infrastructure company said revenue surged more than fivefold in its second quarter, to $582.3 million.

Nebius' results show that "AI compute demand is insatiable and pricing is strengthening, not weakening," says Luke Lango, lead technology and cryptocurrency analyst at InvestorPlace.

Short sellers may have helped Nebius' red-hot rally, too. Nearly 25% of NBIS' stock is sold short, meaning speculators bet that its share price would drop. When a stock starts to soar, short sellers are forced to buy back the shares they sold short in order to contain their losses — and we may have seen some of that in today's price action.

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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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The main stock indexes were lower on Monday as oil prices and interest rates surged amid what looks more and more like a stalemate at the Strait of Hormuz. Investors, traders and speculators cast wary eyes on the Middle East ahead of the release of consumer and producer inflation data on Wednesday and Thursday.

A cooler-than-expected July jobs report lifted odds the Federal Open Market Committee (FOMC) will stay on pause when it meets again in September. Price action shifted back in favor of a rate hike today, though, as it appeared any durable peace in the Middle East will leave Iran in control of traffic through the critical channel connecting Persian Gulf oil and gas production to global markets.

"The S&P 500's breakout from a nearly two-month trading range could get a test this week from inflation and geopolitics," E*TRADE from Morgan Stanley Managing Director Chris Larkin writes. "The jobs report may have eased some anxieties about a Fed rate hike next month, but those concerns could hit new highs without cooler-than-expected inflation numbers this week."

As Larkin notes, last week's rally was based on enthusiasm about a deal to reopen the Strait of Hormuz. "Without a deal on the table," he cautions, "markets may be less likely to respond positively to vague reports about progress in negotiations."

The main event on this week's economic calendar is the release of the July Consumer Price Index (CPI) report on Wednesday. Producer Price Index (PPI) data will follow on Thursday.

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The front-month West Texas Intermediate crude oil futures contract was up 4.9% on Monday to $82.05 per barrel. The 2-year Treasury yield rose to 4.241% vs 4.204% on Friday. The 10-year was up to 4.705% from 4.658%, the 30-year to 5.249% from 5.210%.

At the closing bell, the tech-heavy Nasdaq Composite had shed 0.3% to 26,605, the broad-based S&P 500 was lower by 0.06% to 7,753, and the blue-chip Dow Jones Industrial Average had declined 0.1% to 53,975.

Jefferies says AAPL is a sell

Apple (AAPL, -1.5%) was one of the worst-performing Dow Jones stocks on Monday after a team of Jefferies analysts led by Edison Lee downgraded the iPhone maker from Hold to Underperform, the equivalent of a Sell rating.

"Our supply chain checks suggest that the all-glass iPhone has been canceled due to low yield," they write. "We view this as a major setback to efforts to bring in higher-priced iPhones amid soaring memory costs."

The analysts had forecast a September 2027 release of the all-glass iPhone. Higher costs and a lower average selling price (ASP) is a dynamic that's going to pressure Apple's margins and its earnings per share.

"More importantly," Lee & Co. write, "we believe the plan was to extend the all-glass features to future iPhone Pro and Pro Max models, further raising their ASP and margin."

Canceling all-glass iPhone models lowers the analysts' estimated compound annual growth rate for the iPhone ASP between fiscal 2026 and fiscal 2031 from 9.0% to 6.8%.

Berkshire gets an earnings bounce

Berkshire Hathaway (BRK.B, +1.5%) rallied to a new 52-week high and to within a modest "up" day of a new all-time high after management reported an expectations-beating operating profit (PDF) for the second quarter.

CEO Greg Abel is deploying the cash pile that seemed to define the last several quarters of Warren Buffett's run as the top stock-picker for the Berkshire Hathaway portfolio. Abel also increased the pace of stock buybacks during the quarter.

BRK.B established its all-time closing high of $539.30 on May 2, 2025, the day before Buffett announced his retirement as CEO at Berkshire's annual meeting. Buffett did say in mid-July that he led the effort to add Google parent Alphabet (GOOGL, +0.9%) to the Berkshire portfolio.

UBS Managing Director Brian Meredith reiterated his Buy rating and raised his 12-month target price from $585 to $604, citing Berkshire's "strong balance sheet, upside to earnings from operational improvements, and deployment of excess cash into accretive acquisitions and/or share repurchases."

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It can feel like every day brings a fresh batch of headlines about the financial promise of artificial intelligence. But alongside that excitement is a growing concern: What if we're in an AI bubble?

The question isn't just for investors who own AI-specific stocks. The Magnificent Seven — virtually all of whom are making massive investments in AI — now account for roughly one-third of the S&P 500's value.

With Americans holding a record 33% of their wealth in stocks, and a relatively small group of tech companies driving an outsized share of returns, you may be invested in AI without even realizing it.

Fortunately, caution doesn't necessarily require abandoning the stock market or avoiding AI altogether. The goal is to build a portfolio that can benefit from the technology's growth potential without tying your financial future too closely to a single trend.

Why some investors are concerned about an AI bubble

Many investors see echoes of the dot-com era in today's AI boom. In the late 1990s, internet stocks soared as investors rushed to profit from a world-changing technology. But when the market bubble burst, many companies failed and investors suffered steep losses.

This story contains an important lesson for today: Investors can be right about a technology and still lose money.

Remember, you can't "bet" on artificial intelligence itself. Some companies involved in AI may have the potential to become long-term winners, while others may never generate the profits some investors might currently expect.

That doesn't mean there is definitely an AI bubble. But it does mean investors should be mindful of how much of their portfolio depends on a relatively small number of companies and distant expectations.

Five ways to manage AI risk in your portfolio

Whether AI is in a bubble is ultimately beside the point. Investors don't need to predict when enthusiasm has gone too far. The aim is to participate in the technology's potential for upside without becoming overly dependent on it.

Here are five considerations to help guide your investment decisions:

1. Understand your real AI exposure

Many investors own AI-related companies through S&P 500 funds, Nasdaq funds, growth funds, technology ETFs and employer stock. You might think you have a diversified portfolio, when in reality you could be invested in the same handful of large technology companies across separate funds.

2. Consider prioritizing companies with strong current profits

Valuations are often just expectations of future growth, not evidence of current earnings. Investors concerned about volatility may also favor lower-beta stocks, which tend to be less sensitive to broad market swings and speculative enthusiasm.

3. Consider AI infrastructure instead of AI speculation

Investors might consider companies that support the broader AI ecosystem — including semiconductor manufacturers, data-center operators, power providers and enterprise software firms. These businesses stand to benefit from AI adoption regardless of the form it ultimately takes.

4. Consider diversification beyond AI

Even if you're optimistic about AI's long-term potential, it shouldn't necessarily become the defining driver of your portfolio. Exposure to a variety of other sectors and asset classes can help reduce dependence on a single theme.

5. Consider rebalancing rather than trying to time the market

Review asset allocations regularly, consider trimming positions that have grown disproportionately large and possibly reinvesting in underrepresented areas. Rebalancing can help manage risk no matter where the market turns, but keep in mind that rebalancing, asset allocation, and investment diversification do not guarantee a profit or protection against loss in a declining market.

You don't need to know whether AI is a bubble

No one knows whether today's AI boom will end in a bubble or continued growth. But investors don't need to predict the outcome to be prepared.

By understanding their exposure and avoiding excessive concentration, they can participate in AI's potential upside without tying their financial future to the possibility of success of a handful of companies.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

IPOs are back — and so is the hype. SpaceX (SPCX) launched its record-breaking initial public offering in June, and artificial-intelligence heavyweights Anthropic and OpenAI have also filed to go public, although there's talk that the latter, the developer of ChatGPT, may delay its upcoming IPO until 2027.

With Wall Street bringing its brightest, shiniest objects to market, investors thinking about owning a piece of these freshly minted public companies can't buy blindly. It's due diligence time. Homework time. And that means it's time to study the IPO prospectus. This legal document, known as the S-1, is akin to a company confessional, as it lays out the investment thesis, spills financial secrets and flags every risk imaginable.

"The prospectus is the first time a significant light is shined on a private company," says Kaush Amin, head of private market investing at U.S. Bank Asset Management.

A prospectus can be dry, technical and feel like hundreds of pages of fine print — because it often is. It's still a must-read. Just as a home buyer shouldn't purchase a house without reviewing the inspection report, no serious investor should risk buying shares of a newly public stock without reading the prospectus.

"That’s where the real story is," says Robert Edwards, chief investment officer at Edwards Asset Management.

Another consideration for investors is the health of the IPO market itself. With the bull market still on solid ground and investor sentiment upbeat, investment bankers want to take advantage of the open window to get deals done and take previously private companies public.

This year is shaping up to be the best year for IPOs since the 2021 boom, according to research firm PEInvest. Wall Street tends to roll out its star IPOs first. And as investor excitement builds, Wall Street rushes out more speculative, lesser-known unicorns, which can carry greater risks.

An IPO that's good for Wall Street bankers may not be good for Main Street investors. "The later stages [of an IPO cycle] is when people get caught investing in bad stories," Edwards warns.

You don't need a PhD in finance or an accounting degree to translate a prospectus's thicket-like prose into plain English. The key is to know what to look for and where to find it so you can digest the needed information to make an informed investment decision.

"The prospectus is really the only place that you're going to get an accurate picture of the company's health," says Erin Kolo, a portfolio manager at money management firm Baird.

Because a stock prospectus isn't as fun, well written or easy to read as a James Patterson whodunit, you might be relieved to learn it's not necessary for you to read it from cover to cover.

You can glean the key highlights, such as what the company does, who's running it, how it makes money, whether it's profitable and, most critical, what the risks are, by reading just a few key sections.

We'll point you to the parts that are necessary to review and the most important disclosures to search for. Think of the information below as a plain-English, CliffsNotes-type guide to a prospectus.

Among them:

The prospectus summary

Your first stop should be the summary. This provides you with a high-level overview of the company's mission and ambitions; its business model, along with key growth drivers and risks; its current sales and earnings (if it makes money); and future revenue and profit estimates.

It may also include financial details such as the total addressable market (TAM) that management is projecting (SpaceX's S-1, for example, cited a TAM of $28.5 trillion). Your job is to try to figure out whether a company's lofty expectations are truly within reach.

"Do some homework, ask some questions and challenge the assumptions in the prospectus," says Amin.

Risk factors

This is where the company fesses up to everything that can go wrong. It’s full of red flags. It's akin to "Caution" signs you see driving down the freeway: The purpose is to warn of potential trouble you might have to navigate. "You want to fully understand how your investment might not pan out," says Kolo.

Think of this section as a risk checklist. There are countless things that could get in the way of a promising investment. Examples of risks to look out for include: Intense competition. Regulatory hurdles. Legal challenges. Too high a reliance on a single customer. Negative cash flow.

Reliance on unproven technologies (or technologies that don't yet exist). Or growth projections that are too aggressive and may never come to fruition. "The risks are all there; they're all listed," says Edwards.

Use of proceeds

The goal of an IPO is to raise money, so it's important to know how the company will use the money it raises. What you want to see is the company earmarking the bulk of the proceeds to fuel growth.

For example, funding research and development, recruiting top talent and developing new products are better uses of the cash than, say, paying off debt.

Management discussion and analysis

This part of the prospectus is where management gets to present its side of the story to prospective investors. It provides color on the company's financial condition, recent business trends and future strategy. It includes all the relevant numbers on net income, revenues, cash flow, earnings and debt.

Make sure to inspect the balance sheet, income statement and other key data points.

More importantly, management explains why the numbers are what they are. Company execs explain, for example, why sales plunged or skyrocketed, why there's no cash flow yet, why they're betting big on a new product or market, or why it might take longer to meet their growth targets and post a profit than originally planned.

"The analysis tells you what's happening with the company and why," says Edwards.

Management

If you're going to invest money in a company, it's important to learn about who's running it and their track record. You wouldn't invest in a company that's seeking to make money by flying to Mars or the moon, as SpaceX is, if the top executive made his or her mark in the fashion business. The management section of a prospectus is an executive bio page on steroids.

"I go to the management-team section first," says Steven Conners, founder and president of Conners Wealth Management. "If they can't execute the business plan well, it doesn't matter how good their product is."

Conners looks for executives with a record of success — preferably graduates from leading universities who have work experience at the world’s top companies. "That adds credibility," says Conners.

Other things to look for include any special stand-alone sections at the end of the prospectus, such as the "Index to Financial Statements" included in the SpaceX S-1. Do a deeper dive here. These can add additional insights into the company's financial condition.

Finally, make sure to read about the timing of share lockups (the date insiders and other investors can sell IPO shares for the first time). This information can be found in sections with names such as "Shares Eligible for Future Sale," "Plan of Distribution" or "Underwriting," or by searching the prospectus using key words or phrases such as "lockup" or "restricted period."

Most lockups permit selling 90 or 180 days after the IPO although SpaceX is using a novel staggered structure. "Circle the [lockup] date on your calendar," says Edwards. "That's when you’re going to find out what the smart money really thinks of the IPO."

If you're tempted to skip the prospectus before buying an IPO, think again, says U.S. Bank's Amin. Without it, "you're just making a bet based on hype and hope."

An exciting IPO can be tempting, but it should be just one part of a well-diversified investment strategy.

Use the Bankrate tool below to connect with a financial professional who can help you build an investment strategy aligned with your goals:

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Investors, traders and speculators pushed interest rates lower and stocks higher after softer-than-expected incoming data suggested there's little if any inflation pressure from the labor market right now. Risk-on momentum held up during a relatively quiet early August trading session, and two of the three main equity indexes made all-time weekly closing highs at its end.

Traders in the federal funds rate futures market took the odds of a rate hike at the September Federal Open Market Committee Meeting (FOMC) from 55% on Thursday to 45% following the release of the July jobs report before the opening bell on Friday.

The front-month West Texas Intermediate crude oil futures contract was down 0.5% to $76.94 per barrel. WTI was down 9.1% this week, as interested parties continue to seek solutions to open the Strait of Hormuz acceptable to both Iran and the U.S.

The 2-year Treasury yield retreated to 4.195% today from 4.245% on Thursday. The market-based measure of short-term monetary policy intentions was down 10 basis points this week from 4.291% last Friday.

The 10-year was down to 4.641% from 4.670% yesterday and 4.745% last week, and the 30-year fell to 5.192% vs 5.212% and 5.275%. There was no immediate reaction at the longer end of the yield curve to President Donald Trump reviving his effort to fire Fed Governor Lisa Cook.

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Markets will look forward to next week's economic calendar and the release of Consumer Price Index (CPI) and Producer Price Index (PPI) data for July before the opening bell on Wednesday and Thursday, respectively.

At the closing bell on Friday, the tech-heavy Nasdaq Composite had added 1.3% for the day and 5,2% for the week to 26,690. The broad-based S&P 500 was up 0.6% and 3.6% to 7,757, an all-time high, and the blue-chip Dow Jones Industrial Average had risen 0.3% and 3.0% to 54,036, an all-time weekly closing high.

SPCX didn't go down today

SpaceX (SPCX, +15.8%) has had a historically bad flight in the aftermath of the biggest IPO in stock market history, opening at $150 on June 12 and rising to $225.64 intraday on June 16, but falling to an all-time low of $104.83 on Monday.

Management reported expectations-beating second-quarter results after the closing bell on Tuesday, but SPCX was down 13.6% on Wednesday. The fact that Elon Musk's extraterrestrial venture posted a gain today is noteworthy because it marks the end of a four-week losing streak.

Indeed, SPCX was up 22.8% this week. According to JP Morgan analyst Arun Jain, retail investors are into SpaceX to the tune of approximately $3.6 billion since June 12.

The stock is going to be volatile as more supply of shares come to the market during what will be an extended series of lock-up expirations. We'll see whether there's demand to meet that supply over the coming months.

DOCS gets a big assist from AI

Officially, Doximity (DOCS, +32.6%) is a healthcare stock. That's just what S&P Global says, though. Today, it's trading on AI. And the trading is good.

DOCS closed at $20.66 on Thursday but traded as high as $64.99 in the pre-market on Friday and peaked at $39.99 during the regular session before closing at $27.40.

That's despite the fact that management missed Wall Street's second-quarter revenue and earnings forecast and came up short of analysts' consensus top-line estimate for the third quarter.

This move was all about the conference call and how Doximity appears to be differentiating from other software stocks. "We're the doctors' digital platform," CEO Jeff Tangney said, "and AI is just the next chapter in our growth."

Management noted that the Doximity Ask AI outperformed Anthropic’s Fable 5 and other models in a recent study of medical AI tools conducted by Stanford and Harvard. Tangney noted too that usage rates for Doximity’s tools have surged during the current quarter.

The CEO also emphasized that Doximity shows it's possible to generate strong software margins while investing in AI. "We’re leaning in as we see a once-in-a-generation opportunity to build the new AI age of medicine."

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Markets were mostly lower on Thursday as oil prices and interest rates rose amid uncertainty about the U.S. position on a deal between Oman and Iran to reopen the Strait of Hormuz. While we're still seeing strong data from the earnings calendar, price action today reflected both high expectations, as well as concern for the future.

The front-month West Texas Intermediate crude oil futures contract was up 3.6% to $77.93 per barrel. The Islamic Republic's semi-official Fars news agency reported that Iran wants to ban American and Israeli ships from the Strait of Hormuz. Fars also said Iran is seeking compensation from the U.S. and Israel before they're permitted to transit the passage from the Persian Gulf to global markets.

The 2-year Treasury yield climbed to 4.243% today from 4.179% on Wednesday; the 10-year was up to 4.664% from 4.617% and the 30-year rose to 5.205% vs 5.173%.

Markets will get some big-picture perspective from the economic calendar when the Bureau of Labor Statistics releases the July jobs report before the opening bell on Friday.

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At the closing bell on Thursday, the broad-based S&P 500 was down 0.2% at 7,710, the blue-chip Dow Jones Industrial Average had declined 0.9% to 53,885, and the tech-heavy Nasdaq Composite was lower by 0.06% at 26,348.

Sandisk's guidance is soft

Sandisk (SNDK, -6.8%), which has been one of the best-performing S&P 500 stocks since joining the index in November, recovered from its intraday lows. But the flash storage specialist still suffered another steep loss because it fell short of great expectations.

Management reported exponential year-over-year growth at the top and bottom lines for its fiscal fourth quarter, and the tech stock topped Wall Street's forecast for revenue and earnings per share.

But Sandisk guided to fiscal 2027 first-quarter revenue of $10.3 billion to $10.8 billion, and analysts wanted to see $10.82 billion. Margin guidance of 83% to 85% was also disappointing relative to a fourth-quarter figure of 84.6%.

Still, the bigger picture for earnings is bright, as Louis Navellier of Navellier & Associates notes, with 71% of companies in the S&P 500 reporting so far this season.

"Revenues are running 3.8% higher than analyst consensus estimates, while earnings are coming in at 7.3% higher than analyst consensus estimates," Navellier says. Seventy-seven percent have reported revenue surprises, and 83% have reported earnings surprises.

"Interestingly," Navellier concludes, "this is also the twelfth quarter in a row where earnings are exceeding sales growth, which is indicative of profit margin expansion."

Why DAVE was so down today

Dave (DAVE, -15.1%) is a digital banking platform, and as recently as January it looked more like a small-cap stock than a mid-cap stock.

A year-to-date gain of more than 94% through Wednesday pushed it well into the higher market cap neighborhood. The reaction to Dave's second-quarter earnings report is bringing it back down.

Dave, which describes itself as "one of the nation's leading neobanks," reported earnings of $4.12 per share, year-over-year growth of 48.2%. And revenue was up 29.7% to $170.8 million.

It's those year-over-year growth figures: They're slowing down. A year ago, Dave reported EPS growth of 263%. Then it was 196%, 93% and 64%.

The trajectory for revenue growth is a little like Hemingway's line from "The Sun Also Rises." It went from 64% a year ago to 63% to 62% to 47% when management reported first-quarter results.

Thirty percent annual revenue growth doesn't exactly suggest "bankruptcy." But there is a "gradually, then suddenly" feel to its failure to keep up with the law of big numbers.

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The Dow Jones Industrial Average and the S&P 500 gapped up to new all-time highs at the opening bell on Wednesday, lifted by relative quiet in the Middle East and solid data from the earnings calendar. Heavy exposure to hot AI-related names weighed on the Nasdaq Composite, as markets remain concerned about Big Tech's spending plans.

By the closing bell, the blue-chip Dow Jones Industrial Average had added 0.5% to 54,349, another new record closing high. But the broad-based S&P 500 was off 0.2% to 7,723 and the tech-heavy Nasdaq Composite was down 0.8% to 26,363.

All three remain near their respective peaks despite "no shortage of crosscurrents" to navigate, as LPL Financial Chief Technical Strategist Adam Turnquist observes. Turnquist cites the war in the Middle East and higher oil prices, as well as rising interest rates and shifting expectations about how the Federal Reserve will respond to inflation under Fed Chair Kevin Warsh.

The front-month West Texas Intermediate crude oil futures contract was down 0.9% to $75.10 per barrel amid another pause in hostilities around the Strait of Hormuz. The 2-year Treasury yield ticked lower to 4.179% from 4.194% on Tuesday, while the 10-year was at 4.615% vs 4.627% and the 30-year dipped to 5.171% from 5.189%.

Markets are also looking forward to the release of the July jobs report before the opening bell on Friday, the main event on this week's economic calendar.

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Turnquist notes that semiconductor stocks traded down more than 20%, meeting the technical definition of a bear market while investors, traders and speculators "demanded evidence that rising capital expenditures were translating into meaningful returns" for the AI trade.

"Despite these challenges," he says, "the S&P 500 has remained remarkably resilient," with capital rotating out of communication services stocks, for example, and into healthcare stocks. As Turnquist concludes, "Fundamental conditions have also remained constructive, supported by an economy that continues to grow and corporate earnings."

Indeed: Amgen (AMGN, +4.6%) was the best-performing Dow Jones stocks on Wednesday after management of the biotechnology giant reported expectations-beating second-quarter results and raised full-year guidance.

SpaceX had a lot of gravity

SpaceX (SPCX, -13.6%), on the other hand, cratered in response to its first earnings report as a publicly traded company. Management beat expectations, but not by enough after the biggest IPO in stock market history.

Management said it will expand Starlink Mobile into a full-fledged wireless carrier to compete with telecoms such as AT&T (T, -1.3%), T-Mobile USA (TMUS, -2.1%) and Verizon Communications (VZ, -0.9%).

But Elon Musk downplayed talk of selling China-based electric vehicle operations so Tesla (TSLA, -1.8%) can merge with SpaceX and combine their AI operations.

Meanwhile, Advanced Micro Devices (AMD, -7.0%) sold off hard on word from SpaceX that it will work only with Nvidia (NVDA, +3.4%) to supply the chips and related infrastructure it requires to achieve its extraterrestrial ambitions.

Walt Disney tells another good story

Walt Disney (DIS, +3.7%) beat Wall Street expectations for its fiscal third-quarter bottom line, reporting earnings of $2.05 per share vs a forecast of $1.86. Top-line growth of 6.8% to $25.2 billion fell just short of analysts' estimate of $25.4 billion.

But management reiterated its guidance for double-digit EPS growth for the current fiscal year, as well as for fiscal 2027, and a new leader remains optimistic about the company's near-term trajectory.

"Decades of IP investment have built deep fan connections that translateinto strong financial results," CEO Josh D'Amaro (PDF) said, citing accelerating global guests growth at its theme parks, the success of "Toy Story 5" at the box office and ESPN viewership gains. "Together, our results show a unique ability to engage consumers at scale, both digitally and physically, even amid macro uncertainty."

The consumer discretionary stock enjoyed a similar bounce in May following D'Amaro's first reported quarter as CEO; he replaced Bob Iger in March. But it was down more than 13% year to date through Tuesday while the S&P 500 was up almost 14%. Its trailing-12-month, five- and 10-year comparisons are similarly unfavorable.

In fact, despite the high quality of its intellectual property, DIS has been a buy-and-hold bust, as Kiplinger contributor Dan Burrows writes.

"While it's true that you can manipulate historical returns by fussing with their beginning and end points," Burrows explained earlier this year, "Disney's record vs the broader market over pretty much any standardized period you care to measure is terrible." For the past 20 years specifically, DIS' average annualized return has trailed the S&P 500 by more than 4 percentage points.

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It was another record-setting session for stocks Tuesday as Wall Street cheered the latest round of earnings reports. A big bounce for chip stocks and hope on the geopolitical front also fueled the day's upside.

At the close, the blue-chip Dow Jones Industrial Average was up 1.7% at 54,085 and the broader S&P 500 was 1.8% higher at 7,736 — new record closes — while the tech-heavy Nasdaq Composite had gained 2.6% to 26,584.

"Optimism about an imminent reopening of the Strait of Hormuz, combined with upbeat corporate earnings, has stocks soaring to fresh records," explains José Torres, senior economist at Interactive Brokers.

Torres cites comments from Treasury Secretary Scott Bessent, who told CNBC that the U.S. and Iran could reach a deal to open the strait as soon as today.

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This sent front-month West Texas Intermediate crude futures down 5.7% to $75.77 per barrel, while yields on 2-year (-6.2 basis points to 4.194%), 10-year (-7.3 basis points to 4.612%) and 30-year (-5.9 basis points to 5.17%) Treasuries also declined.

Bessent's remarks drove "crude prices and interest rates south as market participants adjust their oil supply outlooks upward while reducing inflation expectations and Fed rate-hike probabilities, reflecting a greater likelihood of softening cost pressures from restored traffic through the passage," says Torres.

Palantir stock soars after "otherworldly" earnings

Earnings were also a hot topic on Tuesday, with several stocks soaring in the wake of their results.

Palantir Technologies (PLTR), for one, climbed 29.5% — easily making it the day's best S&P 500 stock — after the data analytics platform said second-quarter revenue surged 93% year over year to $1.94 billion, while earnings more than doubled to 41 cents per share.

"This quarter was otherworldly," said Palantir co-founder and CEO Alex Karp. "Demand for AI sovereignty has now been unleashed."

The company also gave higher-than-expected third-quarter guidance and raised its full-year forecast.

"We view the strengthening Palantir results as a reflection of a successful AI strategy that focuses on providing the right infrastructure to maximize its customers' results," says BofA Securities analyst Mariana Perez Mora. "PLTR's sovereign AI approach levers on decades of experience working on national security and highly regulated missions to create the right control layer."

The analyst has a Buy rating and $255 price target on PLTR, almost 60% above where the AI stock is trading.

The earnings calendar stays busy, too, with Advanced Micro Devices (AMD) set to report after tonight's close. The chipmaker joined its peers in a broad rally today, climbing 7.0%.

Bezos unloads $4.1 billion in Amazon shares

One blue chip stock that sat out the day's surge was Amazon (AMZN), which fell 2.3% on news that founder and former CEO Jeff Bezos is selling 15 million shares worth roughly $4.1 billion.

A Securities and Exchange Commission (SEC) filing disclosed the sale, originally scheduled on November 14, 2025, under a Rule 10b5-1 plan that prevents insider trading.

Bezos' timing is impeccable, though. Amazon shares jumped more than 15% last Friday on strong earnings and hit a record high on Monday. They're also up 20% for the year to date.

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Last month, I proclaimed short (but not ultra-short) maturities as the ideal place along the present fixed-income curve. Is there also an ideal target for yield-seeking stock investors?

This year has been swell for popular dividend funds. Through June 30, for example, the Schwab U.S. Dividend Equity ETF (SCHD) returned 18%, boosted by tech and drug winners. Based on its most recent quarterly distribution, the exchange-traded fund yields 2.7%, which lags utilities, energy partnerships, real estate investment trusts (REITs) and even a fourth of the names in the S&P 500. Perhaps the path to optimizing dividends is simply to concentrate on pipelines, REITs and utilities. But that leaves out a pile of possibilities.

When you benchmark stocks against 4% bank, Treasury and money market rates, 2.7% appears weak. I disagree, given that good stocks appreciate, dividends are not fixed, and the payouts are often tax-qualified, with a maximum 20% tax bite (23.8% for a few rich taxpayers). I would not chase the top of the stock-yield charts, where long-term returns can be awful.

Is there a dividend sweet spot? I set a goal of 10% total return that includes 2.5% (or more) from cash. Here's where I found possibilities:

1. A screen for qualifying companies with rising earnings and cash flow and a reasonable payout ratio.
2. Mutual funds and ETFs that filter dividend payers by a formula designed to provide high risk-adjusted returns.
3. Actively managed dividend funds.
4. A strategy of accumulating individual shares, building a substantial yield on their average cost.

The twist: Enter only at yields of 2.5% or above.

Thoughts on each:

1. Screening quality stocks for yield and return.

If you set a 10% five- or 10-year return target, plus a 2.5% yield hurdle, you lose high-yielding losers like Medtronic (MDT) but green-light an array of energy giants such as Exxon Mobil (XOM) and Chevron (CVX), big banks such as PNC Financial Services (PNC) and Fifth Third Bancorp (FITB), and some defense contractors. These embellish any collection of REITs and utilities without requiring you to spot long shots and turnarounds.

2. Gadget-type dividend funds.

The archetype is the WisdomTree U.S. High Dividend Fund (DHS), whose method is complicated but selects much of what I just described. The monthly dividends are lumpy, but you get more than 3% with low volatility; in the first half of 2026, the fund returned 13.7%.

The ALPS Sector Dividend Dogs ETF (SDOG) has a method utterly unlike that of the WisdomTree fund, but results are comparable; it is up 17% and change. The Fidelity High Dividend ETF (FDVV) is another option, albeit riskier as the ETF includes high-octane fuel such as Nvidia (NVDA) and Alphabet (GOOGL). I would be chary of any new or unproven dividend-filter ETF schemes, but this trio is worthy.

3. Active dividend funds.

Besides the Schwab ETF mentioned above, I suggest the Federated Hermes Strategic Value Dividend Fund A (SVAAX) and its more U.S.-focused ETF cousin, U.S. Strategic Dividend (FDV).

Whether purely active management outdoes the rules-based dividend screeners like those employed by ALPS and WisdomTree is an open question. But you get paid well and distributions per share often rise annually.

4. Buy, hold, collect and grow.

Normally, a dividend-growth plan centers on world-beaters such as Apple (AAPL) and Walmart (WMT) in their early years when they start to pay cash, because you can anticipate a lifetime of generous raises.

I propose a variation: Build fresh positions in 2.5%-and-up payers also known for robust dividend growth. This will be the subject of a future column. Hold the thought.

Jeff Kosnett is editor of Kiplinger Investing for Income. You can reach him at Jeff.Kosnett@futurenet.com.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Election season can turn even levelheaded investors into political strategists. New polls, fresh candidates, hot debates and updated predictions about which party will control Congress can all seem like reasons to make drastic portfolio changes.

Following such impulses is usually a mistake. "I regularly remind investors to save politics for Thanksgiving dinner; they have no place in an investor's portfolio," says Marta Norton, chief investment strategist at Empower.

The trouble is that it's easy to assume the political party you prefer is also the best one for markets, Norton explains, even though earnings and valuations, as well as interest rates and inflation, all have much greater influence on markets over any meaningful term.

History shows midterm years are more volatile. The data also says they tend to produce strong rebounds once results are in. According to BlackRock, the S&P 500 has posted an average gain of 14.1% in the six months following midterm elections since 1970.

So preparation does matter. But it's not about predicting a winner. It's about returning to what really determines long-term investment success: your financial plan, diversification and fundamentals.

Here are five tips from experts to help you prepare your portfolio for midterm elections.

1. Let your financial plan, not your politics, guide you

When you hit traffic on a road trip, you might take a detour. But you don't abandon your map and your destination. You can think of midterm-related market volatility the same way.

When uncertainty rears its menacing head, D.A. Davidson Vice Chairman Andrew Crowell says to "trust your financial plan. A good financial plan should be able to sustain some volatility and keep you focused on future goals, no matter the outcome."

Even with increased volatility, midterm years are generally good for market returns. Since 1937, the S&P 500 returned an average 9.2% during midterm years, according to J.P. Morgan Asset Management.

Rather than trying to predict every turn in the road, though, take the opportunity to ensure "your risk and return objectives are properly calibrated during the summer preceding the midterm election," says First Horizon Wealth Management Chief Investment Officer Eric Teal.

Review whether your goals, time horizon, risk tolerance and upcoming cash needs have changed. Then check whether your current portfolio mix is still aligned with those priorities.

2. Rebalance investments that have drifted

Staying the course doesn't mean ignoring your portfolio. Market performance over recent years may have pushed your investments away from your chosen target weights. Volatility can be an opportunity to bring them back into balance.

"If and when markets sell off, investors have a chance to reevaluate their strategy and determine whether the prevailing lower prices offer a good opportunity to increase exposure to a now-cheaper asset class," Norton says.

Rebalancing means trimming investments that have become overweight and using the proceeds to buy those that have become underweight. It doesn't always require selling. You can achieve the same effect by simply investing new cash into your underweight areas.

Rebalancing can be a smart way to scratch the "itch" to take action around election time, Crowell says. It ensures any trades you make support your long-term goals, rather than reflect short-term election noise.

3. Build resilience through diversification

Midterm elections aren't the only potential source of market turbulence. The weakest midterm-year markets also coincided with other major forces, such as Federal Reserve rate hikes and the bursting of the dot-com bubble, as J.P. Morgan Asset Management found.

Uncertainty around inflation, geopolitics and the future of the AI boom could also make for a bumpier ride this year.

Instead of trying to predict which risk will rattle the markets first, make sure your portfolio isn't dependent on a single outcome. "Diversification across asset classes, including fixed income, along with sector diversification, can play a valuable role," Norton says.

Check under your portfolio's hood to see how diversified you really are. Compare the largest holdings and sector weights. Exchange-traded funds (ETFs) and mutual funds can hold many of the same stocks or sectors and leave you more concentrated than you may realize.

Depending on your goals, diversification can include owning companies of different sizes, geographies, investment styles and asset classes, including bonds.

"In a world fretting about inflation, it's tempting for investors to lose faith in bonds," Norton says. "However, yields now price in far higher inflation, growth, and rate expectations, offering investors better cushion for potential equity market drawdowns, particularly if those drawdowns are fueled by AI concerns."

Bonds and diversification can't prevent losses, but they can help mitigate them and smooth your overall investing journey.

Different sectors also tend to hold up better than others during midterm years. As BlackRock notes, since 1990, healthcare stocks and energy stocks delivered stronger average returns, while industrial stocks and financial stocks have lagged.

That doesn't mean you should make election-based sector bets. The stronger sectors may not continue to outperform. But it does reinforce why diversified exposure across sectors matters.

4. Stay invested and focus on fundamentals

Sometimes the best move is to make no move at all. The trouble with trying to time the market around election cycles is that you need to be right twice: when to get out and when to get back in.

This is further complicated by the fact that the best days in the market often occur close to the weakest ones. According to Vanguard, $100,000 invested in the S&P 500 for the entire period from 1988 through 2024 would have grown to $4.9 million. Missing only the 10 best days cuts the ending value in half to $2.3 million.

"Markets ultimately follow fundamentals, not geopolitics," says Scott Helfstein, head of investment strategy at Global X ETFs. Corporate performance has remained strong, he says, with markets driven more by earnings expectations than political sentiment.

Elections are not irrelevant, though. Changes in tax, regulatory and/or trade policy can affect company earnings and valuations. But moves based on evaluations of those effects are different from selling based on predictions of who will win at ballot boxes.

The time to consider whether to de-risk your portfolio is if and when fundamentals deteriorate, or an asset no longer fits your financial plan, not because political headlines make you nervous.

5. Set rules for how you respond to sell-offs

Athletes know preparation is as much mental as physical. Investing is similar: It's easy to promise yourself that you'll keep your head when the markets make others lose theirs.

Following through on that promise can be another matter when you see your account balances tumble, and every headline seems to predict a worse outcome.

The best way to handle it is with a predetermined plan. Write down both the trigger and response before volatility arrives and the market's "fear index" spikes.

That might involve rebalancing when your allocation crosses a certain threshold, dollar-cost averaging into specific investments or continuing automatic contributions regardless of what the market does.

If election-season volatility does produce a significant decline, Teal says investors can "consider rebalancing and redeploying cash for the eventual rebound and recovery."

That doesn't mean you should start hoarding cash now in the hopes of timing the bottom. But it can mean having a plan for how you'll invest cash that's already earmarked for long-term investing.

You should also specify what you won't do, such as selling solely because of polling results or a sudden sell-off.

The key to surviving midterm season with your portfolio intact is to remember that "the objective is not to try to 'win' the election trade," Crowell says. "The objective is to achieve one's long-term financial goals."

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Stocks jumped out of the gate Monday after President Donald Trump on Sunday canceled planned attacks against Iran. Tumbling oil prices and Treasury yields also boosted sentiment at the start of the month, with one of the main benchmarks closing at a new record high.

In a Truth Social post, Trump said that the United States was "locked and loaded," but he decided to "cancel the attack" against Iran after "perimeters of a deal" had been agreed to.

Trump added that the agreement will include the "Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat."

Front-month West Texas Intermediate crude futures plunged more than 6% to $79.49 per barrel in response, while yields on the 2-year (-4.1 basis points to 4.25%), 10-year (-5.7 basis points to 4.686%) and 30-year (-4.2 basis points to 5.233%) Treasuries tumbled.

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As for equities, the blue-chip Dow Jones Industrial Average soared 1.3% to 53,178 — a new record closing high — the broader S&P 500 rose 1.5% to 7,600, and the tech-heavy Nasdaq Composite climbed 2.1% to 25,913.

The stock market got "an early boost from falling oil," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley, "but the on-again, off-again nature of U.S-Iran diplomacy could mean earnings and jobs data will have to do the heavy lifting for the bulls this week."

SpaceX highlights busy earnings calendar

Corporate earnings have been impressive so far. "Despite mixed reactions to mega-cap Tech results, underlying fundamentals remain strong," write BofA Securities strategists Savita Subramanian and Victoria Roloff. "The earnings-per-share beat rate is at its highest level since 2021, with 77% of companies exceeding consensus expectations, well above the 66% post-week 3 average."

This week's earnings calendar is a busy one, too. SpaceX (SPCX, +5.7%) is arguably the most noteworthy name reporting, with Elon Musk's mega-cap space company making its first appearance on the earnings stage as a publicly traded company.

"Revenues, EBITDA [earnings before interest, taxes, depreciation and amortization], Starlink subs, ARPU, AI pricing, Cursor ARR [annual recurring revenue], fiscal year capex guide… all of these matter," says Morgan Stanley analyst Adam Jonas.

But the bigger issue for investors, says the analyst, is that SPCX stock is currently trading 50% below its all-time high and 15% below its initial public offering (IPO) price.

Wall Street will also be watching SpaceX on Thursday, when the first of the company's lock-up period expires. This is when insiders and early investors will be allowed to sell their shares, which could create volatility in the stock.

"SpaceX used an unusually complex scheme with nine main unlock points instead of one traditional 180-day expiry," explains Bernstein analyst Douglas Harned, Ph.D. "The design staggers insider selling over roughly the first six months post-IPO, with longer lockups for some institutions and for Elon Musk personally into mid-2027."

And while Harned admits that this week's lock-up expiry creates an overhang for the tech stock, he believes "the company's messaging in its Q2 report will be important," particularly updates on "the path to full reusable Starship launches."

Boeing gets double upgraded

Boeing (BA) released its second-quarter results last week and shares rose nearly 5% in reaction to a top-line beat and positive free cash flow.

The Dow Jones stock is up again to start this week, gaining 8.0% on Monday, after the Federal Aviation Administration (FAA) cleared the aircraft manufacturer's 737 Max 7 for passenger flights after years of delays.

The blue chip stock got another boost after BNP Paribas analyst Matthew Akers double-upgraded BA to Buy from Sell. He also raised his price target to $300 from $230, representing implied upside of 28% to current levels.

"The post-COVID era of uncertainty for (Boeing) is over," says Akers. "In the next year, MAX and 777X certifications will drive inventory liquidation and operational stability."

The analyst believes this will lift free cash flow to $7 billion by 2027, roughly $1 billion more than Wall Street expects.

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Stocks were volatile Friday as market participants weighed mixed reactions to a pair of Big Tech earnings reports and surging Treasury yields. The main equity indexes finished the session higher, though, and snapped their weekly losing streaks.

At the close, the Dow Jones Industrial Average was up 0.5% at 52,485, the broader S&P 500 was 0.7% higher at 7,489, and the tech-heavy Nasdaq Composite had gained 1.0% to 25,373.

But stocks' gains were contained as borrowing costs continued to climb. The 2-year Treasury yield jumped 4.1 basis points to 4.27%, while yields on the 10-year Treasury (+4.9 basis points to 4.712%) and 30-year bond (+4.6 basis points to 5.253%) hit their highest levels since 2007.

Today's rise in Treasury yields came after Cleveland Federal Reserve President Beth Hammack, who voted for a quarter-point rate hike at the July Fed meeting, said in a statement that "now is the time" for the central bank to act to bring inflation down. "The longer that high inflation persists, the more challenging and costly it can be to bring it back down."

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Minneapolis Fed President Neel Kashkari, who also dissented in this week's Fed decision to hold interest rates steady in favor of a quarter-percentage-point hike, issued his own statement, saying that he'd prefer to raise rates now than to allow high inflation to become entrenched.

"The fixed-income complex is moving further away from the central bank's current midpoint of 3.63% as bond vigilantes protest [Fed] Chair Kevin Warsh's overly patient posture and dial up inflation expectations, amid a monetary policy institution that isn't following through on its hawkish rhetoric at this juncture," explains José Torres, senior economist at Interactive Brokers.

Amazon, Apple chart different paths after earnings

In single-stock news, Wall Street was once again tuned into earnings from a pair of Magnificent 7 stocks. Amazon (AMZN) emerged as a clear winner on Friday, surging 15.3% after the e-commerce and cloud giant reported a second-quarter beat on strong revenue growth in its cloud segment.

Amazon also gave soft third-quarter revenue guidance due to Prime Day occurring in June this year, and lifted its full-year capital expenditures budget to $220 billion from $200 billion on higher costs for memory chips.

Bill Birmingham, managing director at REX Financial, REX Shares' parent company, says Amazon's quarter was "exceptional," with evidence that the company's custom silicon and artificial intelligence (AI) commercialization are gaining traction noteworthy.

And while it's worth keeping an eye on the lighter revenue guidance and higher spending levels, Birmingham said the print "provides real evidence that AI capex is being monetized."

Apple (AAPL), on the other hand, slumped 7.4%, as weak current-quarter revenue guidance overshadowed higher-than-expected fiscal third-quarter earnings and revenue.

"We paid more per memory in the March quarter than the December quarter," said Tim Cook on the earnings call, his last as CEO of Apple. "And then as I alluded to last quarter, we expected to pay significantly more in the June quarter than the March quarter, and that is what happened. It was partially offset by the benefit of carry-in inventory."

Cook added that the company expects to pay even more for memory costs in its September quarter.

Argus Research analyst Jim Kelleher reiterated his Buy rating and $375 price target on Apple after earnings, representing implied upside of more than 20% to current levels.

"As we see it, Apple's perpetually refreshed roster of highly desirable products provides a unique advantage over industry rivals," says Kelleher. And dips should be bought on this high-quality stock to "establish or dollar-average into positions in AAPL," he adds.

Roblox has its worst day ever after earnings

While Apple was the worst Dow Jones stock today, Roblox (RBLX) was one of the worst stocks period. Shares plunged 26.9% — their biggest one-day decline ever — after the video-game company reported a second-quarter bookings miss and forecast lower-than-expected third-quarter bookings.

Roblox also said it expects Q3 revenue to come in well below what Wall Street is expecting and did not offer a full-year forecast.

This doesn't seem to worry Oppenheimer analyst Martin Yang, who maintained an Outperform (Buy) rating on the communication services stock. "Retention remains stable and content is diversifying," he says, though cautioning that it's still uncertain as to when monetization will catch up to retention.

Yang isn't the only one holding out hope for RBLX. Of the 34 analysts covering Roblox who are tracked by S&P Global Market Intelligence, 19 say it's a Buy, 13 have it at Hold and two rate it a Sell. This works out to a consensus Buy recommendation.

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Dividend stocks are an important part of most investors' portfolios, and for good reason. For one, dividend stocks can boost your total investment returns over the long run, in part because they increase the yield on your original cost basis.

Dividends also provide income for investors, which is especially important for those nearing or in retirement.

How much do you know about dividend stocks? Test your knowledge with our short quiz. And don't worry if you miss an answer or two. You can follow the links below the quiz to refresh your knowledge on dividend investing.

More on dividend investing from the Kiplinger team:

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When it comes to big bank stocks for the long haul, no one beats JPMorgan Chase (JPM). Under the leadership of CEO Jamie Dimon, JPM has outperformed peers — and the broader market — even as it navigated the great financial crisis and a worldwide pandemic.

Dimon, who was named CEO at the end of 2005, spent the early years of his tenure getting the nation's largest bank by assets ready for the storm. While competitors were leveraging up on subprime mortgage-backed securities, Dimon ordered JPM to reduce its exposure. The conservative, and even contrarian, approach to risk management paid off.

When the financial system started to collapse, Dimon's "fortress balance sheet" philosophy not only allowed JPM to survive when other banks failed, it was able to come to the rescue. In March 2008, with backing from the Federal Reserve, JPM acquired Bear Stearns for a fire-sale price of $2 per share. (It was later raised to $10.) Six months later, JPM bought the banking operations of Washington Mutual — the largest bank failure in U.S. history — from the FDIC.

Not that the years after the crisis were much fun for JPMorgan Chase or its shareholders. JPM paid billions in fines, largely related to the mortgages originated by the companies it bought. A tougher regulatory landscape, Federal Reserve stress tests and limits on capital returns to shareholders were a headwind for the financial industry, and JPM was not immune.

By the late 2010s, however, JPMorgan's diversified model offering consumer banking, commercial banking, investment banking and asset management proved to be a big-time moneymaker. Rising interest rates also helped. The bottom line was that the bank was once again able to lavish cash on shareholders through aggressive stock buybacks and steadily rising dividends.

And the good times continue to roll on. The higher rate environment has done wonders for JPMorgan Chase's net interest income (NII), or the difference between what banks pay for deposits and charge for loans. In 2023, NII increased a record 34% year-over-year to more than $89.3 billion. It's currently growing at a pace of more than 3% a year, topping $95.4 billion in 2025.

The bottom line on JPM stock?

Big banks aren't sexy growth stocks. You're not betting on their shares to perform like, say, Nvidia (NVDA) or Apple (AAPL). Slow and steady is just fine — as long as they deliver market-beating returns for patient investors.

On that count, JPM has been a winner. Over its entire life as a publicly traded company, shares delivered an annualized total return (price change plus reinvested dividends) of 13.4%. The S&P 500 generated 11.2% annualized over the same period.

JPM's outperformance is even more impressive over shorter time frames, beating the broader market by wide margins over the past one-, three-, five-, 10- and 15-year periods.

Which brings us to what $1,000 invested in JPM stock 20 years ago would be worth today. Have a look at the above chart, and you'll see that a grand socked away in this Buy-rated Dow Jones stock two decades ago would today be worth about $12,500 — or an annualized total return of 13.5%.

The same amount invested in an S&P 500 ETF would be worth about $8,400, or 11.2% annualized.

As for where JPM stock goes from here, Wall Street is mostly bullish. Of the 23 analysts covering the financial stock surveyed by S&P Global Market Intelligence, nine call it a Strong Buy, three say Buy and 11 have it at Hold. That works out to a consensus recommendation of Buy, with mixed conviction.

Speaking for the bulls, Argus Research analyst Stephen Biggar, who rates shares at Buy, believes the market doesn't fully appreciate JPM's strengths.

"We like JPM among the large banks given its better lending-growth profile, strong credit-card franchise, and expected market-share gains in its capital-markets businesses," Biggar writes. "We view the current forward multiple as undervaluing the franchise."

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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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Investors continue to hope for signs of progress as negotiations between the United States and Iran have broken down. The logic is straightforward: A peace agreement could reduce geopolitical risk, lower energy prices and reduce concerns about disruptions to the Strait of Hormuz. This should all be good news for the broader stock market.

Perhaps.

But I suspect many investors are focusing on the wrong takeaway.

The more interesting question is whether the conflict permanently changes how countries approach energy security.

Think about COVID-19 and the way it transformed global supply chains. For decades, companies optimized for efficiency. The pandemic then exposed the risks of depending on a single supplier or a single region.

"Just in time" became "just in case." A movement toward diversifying suppliers, reshoring production and prioritizing resiliency soon followed.

I expect energy will follow a similar path.

If recent events encourage governments and energy companies to place a greater value on resiliency and dependability — even when it comes at a higher cost — I believe the setup for oilfield service stocks may be more attractive than many investors realize.

How has the oilfield service industry changed?

Oilfield service companies provide the technology, equipment, expertise and manpower needed to find, drill, complete and maintain oil and gas wells. Whether an energy company is developing a new offshore field, maximizing production from an existing reservoir or repairing aging infrastructure, oilfield service companies are often central to the process.

Historically, the industry developed a reputation as one of the market's ultimate boom-and-bust sectors. When oil prices surged, producers rushed to drill more wells. When prices collapsed, spending dried up almost overnight. Service companies were often caught in the middle.

That history is real. But the oilfield service industry today is very different from the one many investors remember.

The three dominant players are SLB, Halliburton and Baker Hughes.

• SLB (SLB) is widely regarded as the industry's technology leader and has the deepest international footprint
• Halliburton (HAL) is perhaps best known for its leadership in hydraulic fracturing and remains the most direct way to gain exposure to North American shale activity
• Baker Hughes (BKR) has differentiated itself through growing exposure to liquefied natural gas, power generation and other energy technology

While each company has different strengths, all three stand to benefit from a world that increasingly values dependable energy supply.

This opportunity comes at a time when energy producers themselves have changed quite a bit. A decade ago, many exploration and production companies prioritized production growth above all else.

Today, shareholders are demanding capital discipline, free cash flow and returns. That shift may not generate the explosive growth that once characterized energy upcycles, but it could also result in a less extreme boom-and-bust cycle for service providers than investors experienced in the past.

Why should investors be optimistic about the sector?

The first reason I am optimistic about the oilfield service industry's long-term prospects is straightforward: The world still needs enormous amounts of oil and natural gas.

That may sound obvious, but investors continue to underestimate how difficult it is to replace existing energy infrastructure. Even as renewable energy grows, economies remain heavily dependent on fossil fuels and the countless products derived from them. The Iran conflict served as a reminder of that reality.

The second reason is that energy security is becoming more important.

For years, many countries focused primarily on securing the cheapest energy available. Going forward, some may place greater emphasis on securing energy from dependable partners and politically stable regions.

That shift could encourage development in areas that previously looked less attractive economically but offer strategic advantages.

More development means more drilling. More drilling means more demand for oilfield services.

The third reason is international growth.

Many investors instinctively think about U.S. shale when they hear the word "oil." Yet some of the most attractive opportunities for service companies may be found overseas.

International and offshore projects are often larger, more technically demanding and more service-intensive than their North American counterparts. They also tend to be driven by long-term development plans rather than short-term commodity price movements.

That plays directly into the strengths of the industry's largest participants.

Where are the opportunities?

Venezuela offers an interesting example.

Recent agreements involving Shell (SHEL) and BP (BP) suggest international energy companies see potential in bringing portions of the country's vast energy resources back into production.

After years of underinvestment and deteriorating infrastructure, doing so would require extensive technical expertise, well rehabilitation, equipment upgrades and project management — the exact types of services oilfield service companies provide.

Importantly, investors do not need Venezuela to become a success story for this thesis to work. Nor do they need oil prices to surge.

That is what makes the opportunity interesting.

The investment case does not depend on a single country, a single conflict or a single commodity forecast.

Oil and gas fields naturally decline over time. Existing infrastructure must be maintained. New projects must be developed. Production must be optimized.

The world needs energy today and will need enormous amounts of energy for years to come.

Some investors spend a tremendous amount of time trying to predict where oil prices will go next. I believe a more productive exercise is identifying the companies that help make energy production possible, regardless of where oil trades next month, and considering what recent events may mean for energy security over the next decade.

Oilfield service stocks are increasingly removed from the cyclical industry of the past that was tied to the next move in crude oil.

Here's the more durable reality: The world needs dependable energy, and oilfield service companies may play a critical role in making that possible.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Stocks rallied off their mid-morning lows on Friday on reports that Pakistan is attempting to restart peace talks between the U.S. and Iran. But worries about the impact of rising oil prices and new tariffs on inflation, as well as another round of poorly received tech earnings, had main indexes reversing course heading into the weekend.

At the close, the blue-chip Dow Jones Industrial Average was up 0.5% at 51,947 and the broader S&P 500 was 0.05% higher at 7,411. The tech-heavy Nasdaq Composite, on the other hand, was 0.6% lower at 24,975. The S&P 500 and Nasdaq notched back-to-back weekly losses, while the Dow extended its weekly losing streak to three.

Retreating oil prices somewhat eased inflation worries ahead of next week's Federal Reserve meeting. But while front-month West Texas Intermediate crude futures fell 3% to $89.31 per barrel, they're still up more than 28% for the month.

And the Trump administration's newly announced tariffs, which impose 10% to 25% tariffs on a variety of goods from major trading partners, kept price concerns at the forefront.

"The administration has found a replacement for the IEEPA tariffs struck down by the Supreme Court in February," says Sonu Varghese, chief macro strategist at Carson Group.

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While the effective tariff rate "will still be below the worst-case scenario feared after Liberation Day," he explains, the tariffs "add another layer of inflationary pressure, raising companies' costs for raw materials and intermediate goods that have yet to be fully passed on to consumers."

The Fed will conclude its July policy meeting next Wednesday afternoon. According to CME Group FedWatch, futures traders are pricing in a 64% chance the central bank will hold interest rates steady — down from 87% one week ago.

Intel swings lower after earnings, DLR has its best day since 2020

Market participants also sifted through a busy earnings calendar. Intel (INTC) was one of the most noteworthy reports. The chipmaker reported its highest year-over-year revenue growth in 15 years — up 25% from Q2 2025 to $16.1 billion — sending its shares higher at Friday's open.

But Intel closed down 7.9% on the day. "Even earnings reports that appear to be positive are often not enough in the current environment," write Argus Research analysts. And for INTC, in particular, Argus is concerned that key end markets, such as servers and PCs, "are at risk from soaring component costs, particularly for memory."

Digital Realty (DLR), meanwhile, surged 11% after its beat-and-raise quarter, its best day since March 13, 2020.

Results from the real estate investment trust (REIT), which owns, operates and invests in data centers, underscored "accelerating AI-driven demand, market share gains, and the strength of its global platform," says Stifel analyst Erik Rasmussen.

And given the company's strong execution, sufficient liquidity and increasing AI-related deployments, Rasmussen believes "Digital Realty remains well positioned to sustain double-digit earnings growth."

He has a Buy rating on the REIT and a $235 price target, representing implied upside of 17% to current levels.

Bank of America hikes its dividend by 14%

In non-earnings news, Bank of America (BAC) jumped 1.3% after the financial giant announced a 14% dividend hike.

"The increase in our dividend reflects the strength of our earnings, the power of our franchise and our confidence in Bank of America’s ability to drive long-term growth and create value for shareholders," said CEO Brian Moynihan in the press release.

This is welcome news for income investors who have watched Bank of America raise its payout for 13 years straight. And the most well-known person in that group is Warren Buffett, who first added BAC to the Berkshire Hathaway equity portfolio in 2017.

While Berkshire has been slowly reducing its exposure to the bank stock in recent quarters, it was still the third-largest equity holding at the end of Q1. And BAC has been an income-generating machine for Berkshire over the years, paying the holding company $625 million in cash dividends in 2025 alone.

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Saving for retirement is hard. For many, investing that money may be even harder. Target-date funds have become a nearly $5 trillion industry by largely solving that problem.

The "target date" is the year of an investor's expected retirement (but it could apply to any other long-term savings goal, such as college tuition). The funds have a heavier weighting in stocks early on, when the investor is younger and can better weather losses. They shift gradually over time to bonds, when safety becomes more important.

It's investing on autopilot, so much so that many call the premise of the funds "set it and forget it." That works for many holders of the funds. But target-date funds come with no guarantees. It's important to choose the right fund for you and to determine where it fits in your portfolio.

It can be an all-in-one diversified solution to a savings challenge, a core around which you layer other holdings or just one of many investments. As with any fund, it's also important to check in periodically to see how well it still fits.

Failing to do so may cause you to veer off course — a serious risk for retirement savers. "The negative thing with the target-date funds is that they don't know your life," says Mark Wilson, founder of MILE Wealth Management in Irvine, California.

Whatever the weaknesses, target-date funds' growth has been explosive: The market increased 20% in 2025 to $4.8 trillion, according to research firm Morningstar. Assets held by target-date funds, both inside and outside of workplace retirement plans, have grown 11.9% per year for a decade. A large part of that is performance, in addition to popularity.

With bonds in the mix, they won't keep up with stocks in a bull market, but most target-date fund holders saw double-digit returns in 2025, Morningstar reports.

A long-term trend toward sharply lower costs has added to the appeal. The average target-date fund had an expense ratio of 0.55% in 2015; in 2025, it was 0.27%. Competition has pushed fees for the cheapest offerings from fund companies including Vanguard and Fidelity to less than 0.10%.

And the funds, which largely contained actively managed investments at the industry's inception, have followed the larger trend of the fund industry by increasingly embracing index investing.

Encouraging good behavior

There are certainly benefits to a "set-it-and-forget-it" approach. Andrew Jacobs Van Merlen, a portfolio manager of the target-date strategies for fund company T. Rowe Price, says his firm conducted a study that suggests target-date investors are about 7.5 times less likely to trade in any given quarter.

"And that relationship holds in periods of market volatility, which is really critical," he says. Adds MILE's Wilson: "People who are in target-date funds tend not to panic. They're better behaviorally than other folks typically are."

The downside is that investors may lull themselves into thinking a retirement-oriented fund is safer than other funds. Many target-date funds tumbled in the financial crisis of 2007-09. More recently, investors who were shifting into heavier bond allocations just as interest rates started to climb in 2022 were in for a rude shock, because bond prices fall as interest rates rise.

William Connor, a wealth adviser at SAX Wealth Advisors, says one of his clients came to him, bewildered. "He asked, 'What happened? Wasn't I supposed to get more conservative?' "

A word about workplace plans

Although substantially similar to target-date offerings that anyone can buy, the funds you're likely to find in your workplace retirement plan may sport some key differences. For one, they're probably cheaper than conventional offerings. You'll likely have access to a less expensive institutional share class, for starters.

Or you may be offered funds legally structured as "collective investment trusts," or CITs, available only in workplace plans. Typically, a fund company takes the exact same asset mix that's in their conventional target-date mutual fund and places it in the CIT structure. Less administration, marketing and regulation — including lighter disclosure requirements — for CITs has added up to lower costs.

You may also see more innovation, at least at first, in workplace funds — for good or bad. On the plus side, some firms, as part of their target-date offering, are including an annuity or some other structure for guaranteed annual income post-retirement. BlackRock launched an annuity-based fund in its LifePath series in 2024, and Vanguard has announced a partnership with TIAA, the long-time pension and annuity provider.

On the jury-is-still-out side is the introduction of private assets into workplace target-date funds. Franklin Templeton, for one, introduced a line of Retirement Advantage Plus funds, with the "plus" indicating that the series provides "modest allocations to private real estate and private credit."

Private real estate has been part of some target-date allocations for years, but proposed rule changes at the Department of Labor could broaden the push into private assets, with the DoL estimating the changes could prompt 4.5 million plan participants to put $178 billion in target-date funds with alternative investments.

"I'm a big fan of private investments for sophisticated investors," says SAX's Connor. "I'm very wary about them going into these retirement plans."

Pay attention to the glide path

No matter whether you're choosing a retirement plan offering or considering a target-date fund for your personal portfolio, the so-called glide path will be one of your most important considerations. The glide path refers to a fund's progression from a heavy stock weighting to a majority allocation to bonds — and that can vary meaningfully from fund to fund.

Target-date funds are classified as "to" retirement — meaning they stop adjusting allocations on their target date — or "through" retirement, meaning managers tweak the mix for up to decades more after. (Most of the funds mentioned here are through retirement.) Some funds with a retirement date 40 or more years in the future are 99% stocks, while others are barely over 70%, according to Morningstar. The median allocation to stocks in funds with a target 40 years from 2025 is 93%.

Target-date funds today, in the aggregate, contain a higher allocation to stocks than their forebears did, in recognition that people are living longer in retirement and need the "growthier," inflation-beating returns of stocks to pay for it.

Even so, many advisers think the stock allocations are still not high enough. And some investors may decide they're able to tolerate a bit more risk than allowed by the fund that corresponds to the target date they have in mind. There's a workaround for that, Connor sometimes tells his clients: "You want to retire in 2045? Pick the 2055 fund. That'll keep you a little more aggressive for a little longer."

Investors adding a target-date fund to their own portfolio must also choose whether the underlying investments in their target-date fund are actively or passively managed. (A target-date fund can never be totally passive, because choosing how to allocate investments in each year of the path to retirement is an active choice by its managers.) The companies that sponsor target-date funds typically invest in a mix of their own mutual funds. Vanguard, not surprisingly, uses its index funds. Other target-date sponsors use active funds; some, including Fidelity, offer the choice of a blend of active and passive.

Today, 80% of target-date fund assets are held by five firms. Vanguard is at the top with 37% market share, followed in order by Fidelity, T. Rowe Price, BlackRock and Capital Group. To help you understand your workplace options or choose a fund on your own, we took a closer look at each of their offerings. Returns, expense ratios and other data are as of May 31 and apply to publicly available fund offerings, unless otherwise indicated.

Note that most target-date funds have several share classes, aimed at different types of investors, with varying expenses. The funds mentioned here either carry no sales charge or can be found load-waived at some, but not all, major online brokerage platforms, such as Fidelity, Schwab and E*Trade.

Vanguard Target Retirement

Vanguard's index-based approach drives one of the lowest expense ratios among target-date funds: 0.08% across publicly available mutual funds with target dates from 2020 to 2070.

The funds start with an allocation of about 90% in stocks and about 10% in investment-grade bonds, then start down the glide path about 25 years before the target date, around age 40 for someone retiring at age 65. At age 60, the split is 60% stocks and 40% bonds, and at 65, it's 50-50. Vanguard believes 72 is the most common age to start withdrawals, so the funds move to their final allocation, 30% stocks and 70% bonds, seven years after the target date.

Investors in Vanguard's CITs, but not in its mutual funds, have the choice to remain on the default glide path or freeze their stock allocation at 50% by converting to a balanced fund offered in workplace plans with a higher weighting in stocks.

For nearly the entire glide path, the underlying holdings of Vanguard's target-date funds include just four Vanguard index funds: Total Stock Market, Total Bond Market, Total International Stock and Total International Bond.

"With target-date funds, you're talking 40, potentially 50 years of investment if you hold this throughout your entire life cycle into retirement," says Brian Miller, the head of multi-asset product management for Vanguard. "It's hard for any manager, even a really good manager, to consistently outperform over that period of time."

Miller says Vanguard evaluates the allocations every year, considering population characteristics and capital market assumptions, and has not recently changed its asset allocations. "We continue to feel that those numbers make sense for our investors."

The funds have typically been middle-of-the-pack performers, although they meet or beat their benchmarks in most years. Vanguard Target Retirement 2030 (VTHRX), as well as the 2045 (VTIVX) and 2065 (VLXVX) iterations, rarely fell into either the top or bottom 25% of their categories in each of the past 10 years. The 2030 fund, however, finished in the top 15% of its category from 2023 to 2025. It has landed in the bottom half only once in 10 years. (Morningstar rates target-date funds only against their peers with the same target year.)

Workplace investors can expect to see CITs with an annuity option debut later this year. A portion (up to 25%) of investors' target-date fund holdings will fund the annuity in the years leading up to retirement; at retirement or later, investors can choose whether (and how much) of those savings to annuitize for guaranteed lifetime income.

Fidelity Freedom

The firm has three series: Freedom funds, which are actively managed; Freedom Index funds, which are passive; and Freedom Blend funds, which mix the two strategies.

For individual investors, the Freedom funds have expense ratios ranging from 0.46% to 0.68%; the Blend funds have expense ratios from 0.41% to 0.47%; and the Freedom Index funds have an expense ratio of 0.12%.

Last September, Fidelity said it would update its glide paths to boost stock allocations and reduce bond exposure for both early career investors and investors in retirement. The boost to the early career stock allocation is 5 percentage points; retirees will see stocks increase between 0.5 and 0.9 percentage point, depending on the target date.

The allocation shifts started in the fourth quarter of 2025, and Fidelity expects to complete the change by the end of the first quarter of 2027. That means that by then, Fidelity's 2070 funds will invest 95% of assets in stocks, while the 2030 funds will have a bit less than 60%. The firm's 2010 funds, whose holders would be at least 80 years old right now if they retired at age 65, will hold 30.5% of assets in stocks.

Fidelity also said it will increase exposure to inflation-sensitive assets for investors near and in retirement through an addition of commodities and an increase in U.S. Treasury inflation-protected securities. Fidelity says it's making the changes because investors are concerned about longevity and an increasing reliance on personal savings and workplace-plan assets instead of guaranteed pensions to support their retirement spending. The firm also says it sees the potential for continued inflation.

The Fidelity Freedom Index funds have been strong long-term performers, but they "have experienced some headwinds of late," says Morningstar analyst Hyunmin Kim, who notes that the funds had a smaller allocation to U.S. stocks than many peers and moved into bonds in 2021, just before a sharp increase in interest rates. (Bond prices fall when interest rate rise.)

That stock allocation, however, helped the funds beat most peers in 2025 as international stocks outperformed. Fidelity Freedom Index 2030 Investor (FXIFX) and Fidelity Freedom Index 2045 Investor (FIOFX) have finished in the top half of their peer group in seven out of the past 10 years.

Fidelity Freedom Index 2065 Investor (FFIJX), which has only a six-year history, has turned in a mixed performance over that time, finishing in the top 25% in 2025 and near the top third in 2022, but worse than 85% of peers in 2021.

T. Rowe Price Retirement, Target and Retirement Blend

T. Rowe Price has one of the heaviest allocations to stocks of any target-date fund provider. The firm has three sets of target-date mutual funds available to individual investors: Retirement, Target and Retirement Blend.

The Retirement series is 98% invested in stocks 45 years out from the retirement date and falls to just 55% at the retirement date. Stock exposure remains at 30% roughly three decades after retirement, when a fund holder who retired at age 65 would be about 95 years old. The Target series has a less-aggressive glide path that starts similarly but shifts more to bonds slightly sooner than the Retirement series and ends up at 42.5% in stocks in its target year.

The firm's philosophy is that a tilt toward stocks is a must for most savers. "If you're looking at savings behavior of most Americans versus what they're going to need, they're under-saving," says Jacobs Van Merlen. "That means that they need their assets to work a little bit harder to mitigate the risk of running out of money."

T. Rowe's Blend series, introduced in 2018, mixes the active management of the Retirement series with passive index investing. The Blend funds retain the same glide path, including stock allocations, as the Retirement series funds.

Fees across all three series of funds for individual investors range from 0.34% to 0.64%, with the Blend funds at the low end of the range.

The stock-heavy mix has helped the firm's funds outperform in many years of the bull market. T. Rowe Price Retirement 2030 (TRRCX) has four top-10 annual finishes in the past decade, and the fund ranked in the top 11% and 13% in two other years.

The shop's managers aren't infallible, however, with some "uncharacteristically weak" security selection and tactical calls recently leading to a mixed performance for the Retirement series, which otherwise has strong long-term returns, says Morningstar analyst Greg Carlson.

T. Rowe Price Retirement 2065 (TRSJX) has finished in the top half of its peers only twice in its five full calendar years of existence, and it has twice landed in the bottom 20%.

BlackRock LifePath

BlackRock's target-date strategy is called LifePath, and its path can be traced back to the beginnings of the industry, when Wells Fargo Investment Advisors launched its funds in 1993. (Barclays Global Investors acquired the Wells Fargo business in 1995, and BlackRock bought the Barclays operation in 2009. The LifePath name has been constant.)

There are two main series of funds: LifePath Index and the actively managed LifePath Dynamic. A smaller series, LifePath ESG, uses environmental, social and governance factors in its investing. A newer series called LifePath Paycheck, launched in 2024, includes an annuity-based income option that is only available in workplace-based retirement plans.

LifePath funds have heavy stock weightings early on but make a greater shift toward bonds during the glide path than most target-date products. At 45 years from the target date, the LifePath Index glide path is 99% stocks, 1% bonds. It drops to 95% stocks 25 years out and 65% stocks 10 years out. At retirement date, stocks make up just 40%.

LifePath Index funds have an expense ratio of 0.39%; the ESG Index funds charge 0.50%; and the Dynamic funds have annual expenses ranging from 0.84% to 1.59%. Availability of the funds with no load or fee varies depending on the brokerage platform.

Thanks in part to heavier bond holdings than its peers, BlackRock LifePath Index 2030 Investor A (LINAX) has finished in the bottom half of peers in eight of the past 10 years. BlackRock LifePath Index 2045 Investor A (LIHAX) has three finishes in the top third of peers over the past decade but may struggle to outpace peers as it adds to its bond mix.

BlackRock introduced target-date exchange-traded funds called iShares LifePath ETFs in November 2023. The funds, which invest in iShares stock and bond index funds such as the iShares Russell 1000 ETF, have target dates ranging from 2030 to 2070. The expense ratios range from 0.08% to 0.12% — comparable to the cheapest index mutual funds from Vanguard and Fidelity.

American Funds Target Date Retirement

The glide path for Capital Group's American Funds moves in two ways: The ratio of stocks to bonds grows more conservative over time, and the types of stocks also change. Early in the glide path, the funds' stock investments tilt toward growth-oriented stocks; as the target date approaches, the funds tilt more toward dividend-paying stocks.

The glide path keeps stocks near 90% of holdings until about 15 years to retirement. At retirement, stocks fall to just below 50%. The funds are designed "through retirement," so the final stock allocation, at about 30 years after retirement, is roughly 30%.

That post-retirement stock allocation is a slight downward adjustment of a few percentage points, says Kelly Campbell, who leads the multi-asset solutions business at Capital Group. "In our most recent assessment we decided to modestly adjust equity allocations for essentially the first time in a decade and a half because we believe it will make the glide path a bit more resilient."

Schwab, Fidelity and E*Trade all sell American Funds' F-1 shares with no load. The F-1s mirror the company's Class A shares, which have a 5.75% sales charge. The F-1 class of funds have expense ratios ranging from 0.63% to 0.75%.

The American Funds offerings have some of the better performance records among target-date funds: About 20% with a 10-year track record rank in the top 10% of their category, according to Morningstar. American Funds' 2030 Target Date Retirement (FAETX) has six finishes in the top 25% of peers in the past decade. American Funds' 2045 Target Date Retirement (FATTX) has five. The funds' move from growth stocks to dividend stocks as the target year gets nearer has hurt those funds' performance in years when more growth-oriented fare shines.

Strong long-term performance is important, but the best retirement investment is the one that fits your overall financial plan. Use the Bankrate tool below to connect with a financial adviser to build a retirement strategy tailored to your goals:

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Investors tend to view dividends as a general signal of corporate financial quality. The logic is sound: Companies typically don't pledge to pay their shareholders a regular, fixed sum unless they can afford it with plenty of room to spare. Where you find dividends, you'll often find a healthy bottom line.

But that assumption has its limits. As a dividend yield starts to climb well above market and sector norms, investors begin to wonder about that payout's sustainability. It could be that the company is dedicating too high a percentage of its profits to maintaining that dividend;, or it could be that the yield is growing because shares are diving, reflecting some sort of fundamental weakness.

For many reasons, "high" and "reliable" are two yield adjectives that aren't frequently joined at the hip. But it doesn't mean you'll never find the two hanging out.

Today, we'll explore five stocks doling out yields north of 4% — well above the average — that appear to be reasonably safe.

Data is as of July 22, 2026.

Our methodology for finding 'safe' dividend stocks

Before we move on, let's be crystal clear: No dividend on this planet is 100% safe.

Dividend Aristocrats. Dividend Kings. Companies that have paid dividends for more than a century. All of these have seemingly bulletproof dividend programs, and every single one could shrink or outright suspend those distributions tomorrow.

That doesn't mean we think they're about to or even that they ever will. We're just stressing the importance of understanding the nature of dividends. With few exceptions — namely, real estate investment trusts (REITs) and business development companies (BDCs) — businesses aren't inherently obligated to pay us a dime, and they certainly don't have to ensure that we collect a certain level of income.

The best we can do is look for signs that a company can afford its dividend, and that management values maintaining or growing that dividend.

To get to our list of five safe, high-yield dividend stocks, I've looked for U.S.-domiciled and traded equities with the following features:

• At least $500 million in market capitalization
• A dividend yield of at least 4%
• At least 10 consecutive years of stable or growing dividends
• A dividend payout ratio of no more than 60% of estimates for 2026 adjusted earnings per share (in other words, they pay out no more than 60% of their profits as dividends)
• An average broker recommendation of 2.5 or lower within the ratings scale established by S&P Global Market Intelligence, implying they're a consensus Buy.

While that doesn't guarantee that any of these dividends will be the same size (or be around at all) next year, next month or even next week, it might help us identify generous dividends that are more stable than similar-yielding companies.

Stocks are listed in reverse order of their consensus ratings — the lower the number, the better the analyst rating.

OceanFirst Financial

• Sector: Financials
• Market value: $1.1 billion
• Dividend yield: 4.1%
• Consensus rating: 2.29 (Buy)

OceanFirst Financial (OCFC) is the bank holding company for OceanFirst Bank, which is a 124-year-old community bank with 40 locations across five Northeastern states: Maryland, Massachusetts, New Jersey, New York and Pennsylvania.

There's little out of the ordinary here. OceanFirst offers consumer products such as savings and checking accounts, money market accounts, auto loans, student loans and mortgages. It also provides commercial and industrial loans, as well as real estate loans for commercial and multifamily properties.

OceanFirst is looking to bolster that latter business through its "Premier Banking" initiative, in which the company is prioritizing relationship-building and tailored solutions to attract commercial clients.

"Although we believe there remains a good amount of uncertainty regarding the ultimate ROI of the Premier Bank initiative (and the [commercial and industrial] banking hires), the project is off to a strong start and has the potential to meaningfully enhance OCFC's deposit base and franchise value if successful," write Keefe Bruyette & Woods analysts Tim Switzer and Emily Lee, who rate the financial stock at Outperform.

The company also recently acquired commercial bank Flushing Financial, then announced it would sell $1.4 billion in multifamily loans, which would amount to most of the multifamily loans it acquired from FFIC. In so doing, OCFC significantly reduced its overall exposure to multifamily housing.

OceanFirst isn't an annual dividend raiser, but it has improved its cash distribution a few times over the past decade. Its current quarterly payout of 20 cents per share amounts to a reasonable 43% of this year's earnings estimates — and more encouraging, just 35% of expected 2027 profits, which are expected to pop by 24% year over year.

Verizon Communications

• Sector: Communication services
• Market value: $184.9 billion
• Dividend yield: 6.4%
• Consensus rating: 2.27 (Buy)

Verizon Communications (VZ) is an American telecommunications giant, providing wireless phone service, broadband internet, fiber-optic service, wireline service and more. At the moment, it boasts about 147 million wireless retail connections and almost 17 million broadband connections.

Verizon somewhat resembles a utility stock, operating against precious few competitors — VZ, AT&T (T) and T-Mobile (TMUS) account for virtually all of the postpaid market — but also within saturated businesses that have limited room for organic growth.

It's currently trying to fend off its competitors by improving the customer experience.

"VZ delivered a major turnaround in subscribers despite being early days of its customer first strategy," Oppenheimer analysts (Outperform) wrote in April following the company's most recent earnings report. "Management is shifting from price increases and expensive device promotions to adding value, improving segmentation, and increasing automation. This improves CX (customer experience) retention, and margins. The pivot comes at a slight sacrifice to short-term revenue growth, but is critical for growing subscribers — where share losses had caused the stock to lag peers over the past five years."

Verizon's growth plans also include its buyout of local exchange carrier Frontier Communications, which closed in January 2026. "Verizon is looking to expand both its spectrum asset and geographic footprint through acquisitions," says Argus Research analyst Marie Ferguson (Buy). "We think the acquisition with Frontier, a local exchange carrier (LEC), will help Verizon expand into the contested U.S. suburban and rural broadband market and drive earnings growth of about 6% in 2026."

VZ is also like utilities in that it makes up for its lack of growth prospects by paying a generous dividend. The payout, which has improved for 20 consecutive years, currently represents 58% of 2026 profit estimates.

Eastman Chemical

• Sector: Materials
• Market value: $7.98 billion
• Dividend yield: 4.8%
• Consensus rating: 2.00 (Buy)

Eastman Chemical (EMN) is a specialty materials company whose products are used across numerous industries, including agriculture, consumer goods, personal care, transportation and textiles. It offers acids, aviation fluids, animal nutrition products, copolyesters, plasticizers, heat transfer fluids, process fluids, solvents, turbo oils and more.

Materials stocks are inherently cyclical, hinging not only on broader economic strength but also industry demand and individual product-demand cycles. For instance, right now, Eastman and other chemicals firms are struggling with weak demand from more cyclical industries such as construction, autos and consumer durables (i.e., appliances and electronics).

Still, Wall Street is broadly bullish on the name compared with its peers.

"Innovation and sustainability initiatives will likely help the company outpace end market demand trends," say Jefferies analysts, who call the stock a Buy. "The company's methanolysis technology (PDF) is now proven at scale, and growth will likely be driven both by premium recycled content displacing mechanically recycled alternatives, and by new product launches from consumer brands seeking differentiated sustainability offerings. Strategic customer commitments from major packaging and consumer goods companies reinforce the durability of this demand even in a weaker macro environment."

Cyclical companies have to be somewhat conservative with their dividends, as their bottom lines can be more volatile than other industries. Still, despite what a high yield of almost 5% might suggest, Eastman's payout ratio of 54% isn't out of line with its peers.

Fidelity National Financial

• Sector: Financials
• Market value: $13.5 billion
• Dividend yield: 4.1%
• Consensus rating: 1.60 (Buy)

Fidelity National Financial (FNF) is a title insurance company that serves the real estate and mortgage industries. It provides title insurance, escrow and other title-related services; technology and transaction services; and mortgage transaction services. It also offers financial products such as annuities and life insurance.

Title insurers benefit from mortgage volumes, which tend to be spurred by lower interest rates. Consider this bull case from Truist Managing Director Mark Hughes (Buy):

"FNF is the nation's largest title insurer; the company should be a beneficiary of lower interest rates as a result of Federal Reserve [easing]. … The macroeconomic indicators for the housing market are a primary driver of FNF's stock price."

However, Fidelity National Financial might be trying to swim upstream now. While lower rates appeared to be the Federal Reserve's path of least resistance earlier in 2026, persistently high inflation has America's central bank increasingly poised to raise its target rate by the end of the year.

Even without Fed help in the near term, there are other reasons to like Fidelity National. Hughes adds that "Chairman Bill Foley and his team have a long track record of generating outsized returns across a broad spectrum of end markets."

Keefe Bruyette & Woods' Bose George and Frankie Labetti (Outperform) add that, "As the largest title insurer in terms of market share, we believe FNF will continue to be able to use its scale to generate industry-leading margins."

Insurers also tend not to go out on a ledge when paying for their dividends, and FNF is no exception. It pays only about 40% of 2026 earnings estimates to fuel its 4.1% dividend.

American Tower

• Sector: Real estate
• Market value: $77.4 billion
• Dividend yield: 4.3%
• Consensus rating: 1.56 (Buy)

American Tower (AMT) is a global telecommunications REIT that leases out space on nearly 150,000 communication sites across five continents. Its tenants include wireless data and/or service providers, radio and television broadcast firms, companies in other industries, even municipal governments and federal agencies.

AMT shares a headwind with Verizon — a saturated U.S. market — but has other routes to growth.

"The company is a leader in tower services, and while domestic mobile spending has flattened, the company is focusing on international expansion of 5G networks and growth in mobile data consumption," says Argus Research's Ferguson (Buy). "It also entered the data center market through its 2021 joint venture ownership of CoreSite, which we see as a positive."

American Tower has been the weakest of these five safe dividend stocks in the past year, losing about 25% of its value. That's at least in part about worries that more promotional activity in the wireless business could dampen longer-term investments, which could, in turn, mute tower leasing growth.

But Citi's Michael Rollins (Buy) sees leasing activity stabilizing and the possibility for a new entrant into the mobile service space. "We also see potential for AMT to continue to evolve its data center business strategy, while management commentary leads us to believe the leaning is still as a net investor, rather than a net seller," he says.

As for the distribution? While higher-than-average payouts are the norm because of REITs' dividend mandate, AMT has never flashed a monster headline yield — January 2026 marked the first time shares have regularly paid above 4%.

Still, for now, the dividend is well-covered. When it comes to evaluating REIT dividends, the metric to use isn't earnings per share (EPS), but funds from operations (FFO), which measure the cash generated from a REIT's core operations. Typically, anything below 80% is considered safe, and American Tower's dividend currently represents just 70% of this year's FFO estimates.

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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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"Nvidia, Nvidia, Nvidia. SpaceX, SpaceX, SpaceX. But of course, Nvidia. Micron, sure, and let's Apple too. But when it comes right down to it, Nvidia, SpaceX, Meta, Alphabet, SpaceX, Nvidia, Alphabet and Nvidia."

If that's what it feels like to turn on CNBC, check out your favorite investing website or scroll through your financial social feeds … I agree.

I've spent more than a decade in financial media, and I'll be the first to admit that we don't just talk about the stocks that people follow — we drown them in related content, and at the cost of ignoring some duller but still plenty productive stocks.

Today, I'm setting aside a little bandwidth for the sleepers, the yawners, the ho-hum companies that have largely trudged along, printing profits and padding portfolio gains.

How we found our five 'sleeper' blue-chip stock picks

You won't read about high-flying semiconductor stocks or the hottest upcoming initial public offerings (IPOs) here.

Instead, I'm going to run down a group of relatively mundane blue chip stocks that don't generate many headlines, but that have two qualities we shouldn't ignore:

• They've managed to outperform the S&P 500 in the past five years on a total-return basis.
• They're highly rated by Wall Street's analyst community.

I put together a simple quality screen — S&P 500 components that are worth at least $50 billion by market capitalization, have outdone the index in the past half-decade, have at least 10 covering analysts and have an average broker recommendation of 2.5 or lower within the ratings scale established by S&P Global Market Intelligence, implying they're a consensus Buy.

At that point, selection was largely subjective. I opted for higher-conviction Buy ratings. I ignored attention-grabbing sectors such as technology and communication services. I favored companies that, while occasionally well-known by consumers, rarely get financial media coverage outside their quarterly earnings reports.

Data is as of July 20. Dividend yields represent the trailing 12-month yield, a standard measure for equity funds.

Motorola Solutions

• Sector: Information technology
• Market value: $68.2 billion
• Dividend yield: 1.2%
• Consensus rating: 1.64 (Buy)

The first sleeper pick is a tech stock. I'm not a reliable narrator. I've never claimed to be.

But all jokes aside, I'm making a point by highlighting Motorola Solutions (MSI), which is pretty humdrum compared with the chip and app names that largely define the modern-day technology sector.

When most people think of Motorola, they think of smartphones — Edge, Moto G, Razr and more. But that's Motorola Mobility, which has been a wholly owned subsidiary of Lenovo for more than a decade. Motorola Solutions was created three years earlier in a corporate split.

MSI's primary businesses are critical-communications land mobile radio (LMR) devices and networks (think emergency-personnel handheld radios); command-center technologies; and video security. Impressive technology? Sure. Does the media talk about it the same way it does large language models (LLMs) and quantum computing names? Nope.

Still, this is a $70 billion outfit with roots that go back nearly a century. It might not be an explosive grower, but it has outreturned the S&P 500 by several percentage points in the past 10 years and offers a modest dividend, as well.

The pros love the stock, too. MSI is currently covered by 14 analysts, a dozen of whom deem it a Buy. The remaining two calls are Holds; no one thinks it's a Sell. They all believe Motorola will continue delivering decent bottom-line improvement, with long-term annual earnings-growth estimates sitting around 10% annually.

"Record demand for public-safety communications, video security and command center software should drive long-term [earnings per share] growth in the low double digits when taking into account organic growth, acquisitions and stock buybacks," says William Blair analysts, who rate the stock at Outperform (equivalent of Buy). "The EPS (earnings per share) [compound annual growth rate] from 2017 through 2025 was 14%. We believe the annual stock return will at least match EPS growth."

Speaking of acquisitions, the company announced in early June a $1.5 billion acquisition of Israel-based counter-drone provider D-Fend Solutions, which complements its 2025 Silvus acquisition and gives it additional ammunition to pursue Department of War (formerly the Department of Defense) contracts.

Eaton

• Sector: Industrials
• Market value: $158.4 billion
• Dividend yield: 1.1%
• Consensus rating: 1.63 (Buy)

Many names attached to the artificial intelligence (AI) trend have blown up in popularity (and stock price) in the past few years, so it's difficult to find AI-connected names that are flying relatively under the radar.

But Eaton (ETN), despite its success, still is far from a household name.

Eaton is a global intelligent power management company. On the AI front, ETN has partnered with companies such as Siemens Energy (SMERY) and — you guessed it — Nvidia (NVDA) to improve data center infrastructure. In 2025, Eaton bought Resilient Power Systems, which makes solid-state transformer technology that may simplify the building of AI data centers.

But ETN's offerings go well beyond AI. The company offers power distribution, energy storage, backup power, electronic components, data and video cables, lighting and controls, utility and grid solutions, server racks and more to a variety of industries.

"This blue-chip industrial company is benefiting from megatrends, such as energy transition, electrification, digitalization and infrastructure spending, that are driving growth in its end markets," says Argus Research analyst Kristina Ruggeri, who rates the industrial stock at Buy. "The company has been experiencing strong orders and record backlogs that should position it well to deliver EPS growth over the long term, driven by margin improvement and top-line growth."

It's also worth noting that the company's June announcement that its Mobility Group would combine with automotive industrial firm Dana (DAN) in a Reverse Morris Trust, following which Eaton shareholders would own 50.1% of the combined entity.

"We view this ... announcement as a clear positive for ETN shareholders as it accelerates the company's plan to focus on its core higher growth/higher margin Electrical and Aerospace businesses," say BNP Paribas Equity Research senior analysts James Picariello and Andrew Buscaglia. The firm rates ETN at Outperform. "As we've discussed, exiting Mobility would help ETN create a more concentrated portfolio aligned with key megatrends in electrification, data centers and aerospace & defense."

All told, ETN enjoys 22 Buys against four Holds and just one Sell, according to S&P Global Market Intelligence. The consensus view is for annual average earnings growth of 10% over the long term.

AutoZone

• Sector: Consumer discretionary
• Market value: $49.0billion
• Dividend yield: N/A
• Consensus rating: 1.48 (Strong Buy)

AutoZone (AZO) is a retailer and distributor of automotive replacement parts and accessories, boasting nearly 7,900 stores across all 50 U.S. states, the District of Columbia, Puerto Rico, Mexico and Brazil.

It's a name most everyone knows, but few people have on the tips of their tongues, at least as stocks are concerned. It's a brick-and-mortar retailer that dishes out motor oil, brakes, batteries and car-washing goods — as mature a business as they come.

But while AZO might not enjoy much run time on CNBC, it's well respected among the research community. Currently, 23 analysts consider AutoZone shares to be a Buy, while the remaining four covering analysts call it a Hold. While it's a mature business, the pros still see the retailer delivering 13% average annual long-term earnings growth.

That bullishness comes amid a rough spell for AutoZone. While the company has outperformed the S&P 500 in the trailing five-year period, the past year has seen AZO lose almost 20% of its value while the index has advanced by roughly as much. The latest setback stemmed from a weak fiscal third-quarter report announced in May.

"While AZO's Q3 results fell short of expectations following several quarters of underperformance, we believe today's selloff was overdone," says Morgan Stanley analyst Simeon Gutman (Overweight, equivalent of Buy). "We understand investors are increasingly questioning the credibility of the AZO story given uneven execution over the last three to four quarters; however, Q3 represented a step in the right direction from an earnings standpoint, with [earnings before interest and taxes] inflecting positively and the setup for further acceleration improving into Q4 and FY27."

Analysts believe near-term growth from new "megahubs" — larger locations that act as regional supply centers for retail stores and repair shops — and longer-term opportunity from international expansion.

"Expect U.S. megahub expansion and U.S. store growth to help offset transitory international softness," says Jefferies analyst Bret Jordan (Buy). "We continue to view [Mexico and Brazil] as attractive long-term total addressable market growers with significant market share opportunities for AZO. In the interim, we expect megahub to drive healthy domestic [do-it-for-me] share expansion while new stores entering the comp base likely add ~150 basis points to same-store growth."

Cardinal Health

• Sector: Healthcare
• Market value: $53.1 billion
• Dividend yield: 0.9%
• Consensus rating: 1.47 (Strong Buy)

Most water-cooler-worthy healthcare stories come from pharmaceuticals or biotech companies developing the latest breakthrough drugs, or medical device firms wizarding their way to technologies that change the way we recover and live.

Cardinal Health (CAH) isn't that.

This blue-chip healthcare stock is as behind-the-scenes as it gets, distributing pharmaceuticals, medical supplies, consumer products and data solutions to the vast majority of the nation's hospitals, pharmacies, clinical labs and ambulatory surgery centers.

These businesses don't exactly generate headlines, but they provide robust revenue diversification with plenty of opportunity for growth — CAH shares have delivered a total return of 360% in the past five years, crushing the healthcare sector and the broader market.

That performance has been driven by a long string of consecutive quarterly earnings beats, which stands at 15 following its fiscal Q3 reported in late April.

"Pharmaceutical and Specialty Solutions revenue grew 11% year-over-year to $56.1 billion, supported by branded and specialty pharmaceutical sales growth," notes Daniel Rich, an analyst for independent research firm CFRA, which rates the stock at Buy. "We also think free cash flow generation remains robust, as CAH raised FY26 guidance to a $3.5 billion midpoint from $3.25 billion previously."

That cash flow is especially important given Cardinal's status as a Dividend Aristocrat. CAH currently boasts 30 consecutive years of uninterrupted payout growth, most recently announcing a 1% uptick to 51.58 cents per share in early May.

Cardinal Health also sports a healthy bull camp of 15 Buys against three Holds and no Sells. As a group, they see CAH delivering 17% average annual earnings growth over the long term.

The TJX Companies

• Sector: Consumer discretionary
• Market value: $167.2 billion
• Dividend yield: 1.3%
• Consensus rating: 1.38 (Strong Buy)

The highest-rated of these "sleeper" blue chip stock picks is The TJX Companies (TJX).

Most people know this consumer discretionary stock for its TJ Maxx fashion retail locations, but it's also responsible for a host of other low-cost chains, including Marshalls department stores, furnishing and décor retailer HomeGoods, outdoors gear seller Sierra and Canadian brands HomeSense and Winners. It also operates as TK Maxx in Europe and Australia.

Physical retail has generally been in a state of decline for years, and COVID finished off a number of brick-and-mortar retailers. But TJX continues to find demand for its steals and deals, which has driven shares to a market-beating 140% total return in the past five years and kept analysts optimistic about its ability to continue climbing.

"The off-price channel offers a very attractive value (proposition) to: (1) brands (efficient inventory management assistance); (2) landlords (stable & attractive foot traffic); and (3) shoppers (20%-60% off hot products in a differentiated treasure hunt experience)," says Truist Vice President Joseph Civello (Buy). "With its leading scale position, we believe TJX has access to the best product and convenient locations, which attracts the highest value traffic (creating a flywheel that further enhances their competitive edge).

"We believe this will continue to fuel its consistent algo with highly visible top/bottom-line growth in a vertical that we view as one of the most attractive in retail."

Civello is hardly alone. The Street has 19 Buy calls on TJX shares, vs a lone Hold and a single Sell. Long-term growth expectations aren't exactly electric, but at a 9% average annual clip, that's still respectable for a mature budget-store empire.

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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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• How to Invest in the Modern Space Race

Space exploration came to the world more than a decade after World War II ended. To begin with, two countries dominated the field: America under the auspices of NASA (National Aeronautics and Space Administration) and the Soviet Union's slew of space design bureaus. It got dubbed the Space Race.

Fast forward to now, and there's another space race, this time it's happening via private and public enterprise. That means you could profit from companies involved in the space sector by purchasing relevant stocks. But which ones?

Top of the headlines is Elon Musk's SpaceX (the Space Exploration Technologies Corp, ticker symbol: SPCX), which, as well as rocketry, includes data centers, artificial intelligence and Starlink, the 10-satellite communications network. The company's initial public offering, in June, raised an extraordinary $85.7 billion, $10 billion more than expected. That made it the largest IPO in history. As if that wasn't enough excitement, SpaceX's shares soared to approximately $177 in less than a week, up from $135 at the IPO. By then, the market capitalization hit $2.4 trillion.

As with many things involving Elon Musk, there are those who love it and those who think the opposite. Michael Monaghan, portfolio manager at Founder ETFs in Dallas is among the former: "We are bullish on SpaceX. We think SpaceX will be the dominant space company with the highest efficiency and lowest price."

Monaghan also views a defense angle that SpaceX could benefit from. "The U.S. wants a moon base, and there is only one company that can do this: SpaceX," he says. "It's being planned partly for geopolitical reasons, with a new report saying, 'the Space Force needs to prepare for an in-person moon conflict with China.'"

On the other hand, there are skeptics, notably Morningstar's industrial equity analyst Nick Owens, who believes the value of SpaceX is $63 per share, which is less than half the IPO price. He's waiting for evidence that SpaceX's goal of putting data centers in space, along with artificial intelligence, is likely to materialize.

"The validation evidence would be that the rockets are reliable," Owens says. "And to find out the commercial viability in space, we will want to know the relative costs to those data centers on Earth."

Of course, there is more to the new space race than SpaceX. For instance, there's Rocket Lab (RKLB), a launch services provider. "I am very positive they are doing really good work in small launches that few others do," says Keith Snyder, a senior analyst at CFRA Research, based near Denver.

Snyder recently published a comment saying that Rocket Lab "is recognized as a preferred supplier across the space industry, with components and platforms being selected for flagship missions such as Artemis, Mars rovers and the International Space Station resupply, as well as for national security programs."

There's also good news on bookings, according to Snyder. He wrote, "Strong customer confidence and demand for [Rocket Lab's] Neutron launch vehicle was evidenced by significant pre-launch bookings." The company also has a record backlog of launches with 70 launches scheduled. Rocket Lab stock recently traded at $107, but Snyder has a one-year target of $140.

Aerospace company Boeing (BA) might not stand out as a major space competitor, but it does have a role in making bespoke rockets, rather than mass-produced ones, writes CFRA analyst Matt Miller. He also notes that Boeing has huge revenue, mostly from its commercial airplane sales: $89.5 billion last year and a forecast of $98 billion this year.

There's also limited competition for its products. The combination of solid revenue and minimal competition (notably from Airbus) should provide some economic ballast for the stock while still giving it a foothold in the Space sector. Miller has a 12-month target of $278 for Boeing stock, compared to a recent price of $223.

For those who want to avoid buying individual stocks, there are exchange-traded funds that track baskets of space-related stocks, such as the VanEck Space ETF (WARP), the Procure Space ETF (UFO) and the ARK Space & Defense Innovation ETF (ARKX). Overall, these funds will likely be less volatile than any individual space-related shares.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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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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Investor fervor for artificial intelligence (AI) keeps making dividend stocks look downright dumpy. Over the past 12 months, the S&P 500 has returned an eye-popping 29.8%, while the Kiplinger Dividend 15, the list of our favorite dividend-paying stocks, returned an average of 13.4%. Just three — Broadcom (AVGO), Johnson & Johnson (JNJ) and recent addition U.S. Bancorp (USB) — beat the market.

What a world we live in, when a 13% annual return is a middling performance. Of course, much of the story remains the mega-cap Magnificent Seven technology stocks that continue to drive the returns of the S&P 500 and now make up an outsize proportion of this primary measure of the markets. Although five of the seven pay teeny-tiny dividends, the stocks are not on anyone's list of income investments.

Slice and dice the S&P 500 numbers, and you'll see better news for the dividend-hungry. Of the 400-plus stocks in the S&P 500 that make a payout to their investors, the median 12-month return has been 14.0%, according to data from S&P Global Market Intelligence. The 100 or so that don't pay dividends had a median return of 6.4%.

In this context, the Dividend 15 looks okay, with seven outperforming the median and eight falling below. The weakness in our squad represents another market theme of the past year: fears that a faltering economy will crimp consumer spending.

Look at four of the five stocks that lost ground over the past 12 months: McDonald's (MCD), Home Depot (HD), Procter & Gamble (PG) and Mastercard (MA). The profits of all four depend on open wallets, but consumer sentiment is testing lows.

Take McDonald's. There's evidence that the world's biggest burger seller is succeeding in winning back value-oriented customers after years of price hikes. Sales at restaurants open for at least one year increased 3.8% worldwide in the first quarter. The company's CEO blunted enthusiasm on the company's May 7 investor call, though, by saying consumer sentiment "may be getting a little bit worse."

One believer that McDonald's has the special sauce: Goldman Sachs, which has it on its U.S. Conviction List of Buy recommendations. McDonald's, Goldman says, has "the right menu, at the right time, everywhere in the world."

Three of the Dividend 15 have raised their payouts since our last review, all modestly. J&J increased its dividend by 3.1%, P&G by 3.0% and Walmart (WMT) by 5.3%. All three are members of our Stalwarts list, where consistency of dividend hikes is paramount.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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