Financial stocks are teed up for a good second half of the year, supported by a number of factors.

For starters, stocks in the sector reported blowout earnings in the most recent quarter. On average, quarterly earnings growth compared with the same quarter a year ago has been "strong," coming in at 18%, says Matthew Bartolini, global head of research at State Street Investment Management. That outstripped analysts' expectations for earnings growth in the quarter by more than threefold.

The specter of looming interest rate hikes (instead of cuts) is also a positive — bank stocks tend to thrive when rates rise, unlike stocks in many other sectors. And price-to-earnings multiples for financials relative to the U.S. stock market are currently at 15-year lows, says Bartolini.

Five financial funds to consider investing in

The State Street Financial Select Sector SPDR ETF (XLF) is a diversified sector fund that holds all the financial stocks in the S&P 500, from big banks (JPMorgan Chase, for example) and capital markets companies (Goldman Sachs) to financial services firms (Visa) and consumer finance businesses (American Express).

The Invesco KBW Bank (KBWB) holds big banks, capital markets firms and some major regional banks, too. Top holdings include Bank of America, Morgan Stanley and U.S. Bancorp.

Or you could home in on big banks and capital markets firms. Among other pluses, these businesses stand to benefit from the enormous amount (reaching an anticipated $1 trillion in 2027) that analysts expect corporate America to spend on the buildout of artificial intelligence capacity.

"The AI buildout has been conducive to earnings within the financial sector — from loan growth to investment banking initial public offerings and mergers and acquisitions. All of these are financial services-related events" and are helping to boost results at big banks and capital markets firms, Bartolini says.

Bank-focused ETFs include First Trust Nasdaq Bank (FTXO) and State Street SPDR S&P Bank (KBE). Both hold stocks in big banks but have hefty stakes in regional banks, too.

The State Street SPDR S&P Capital Markets ETF (KCE) focuses on asset managers, investment banks, brokerage companies and financial exchanges, among other financial market firms.

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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Stocks struggled Thursday as the latest inflation update and surging oil prices sent Treasury yields soaring ahead of next week's Federal Reserve meeting, where the central bank is expected to raise interest rates. However, those expectations could change with tomorrow morning's release of the August Consumer Price Index (CPI) report.

Ahead of the open, the Bureau of Labor Statistics (BLS) said the Producer Price Index (PPI), which measures what businesses pay suppliers for goods, rose 0.4% from July to August, and was 5.4% higher year over year — faster than what was seen the month prior but in line with economists' forecasts.

Core PPI, which excludes volatile food and energy prices, rose 0.2% month over month — a slight deceleration from July's upwardly revised 0.3% increase — but accelerated year over year, rising 4.6% vs 4.2% the previous month.

"August's hot PPI was largely as expected, lifted by rising energy prices as the Iran war disrupts global supplies," explains Bill Adams, chief U.S. economist at Fifth Third Commercial Bank. He adds that core inflation looked sticky too.

"The surge in energy prices since the turn of the month creates new upside risk for inflation that is not captured by the August PPI report," Adams says. Indeed, national diesel prices hit a record high of $5.9773 today, while front-month West Texas Intermediate crude futures jumped 6.7% to $102.48 per barrel. WTI oil has now risen for eight straight days, marking its longest winning streak since 2023, according to Dow Jones Market Data.

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"The September Fed decision looked finely balanced," says Adams, and "September's surge in energy prices will likely tip the balance towards a hike," though "a big surprise from the August CPI report's release tomorrow or a last-minute deal with Iran could still influence the decision."

At last check, CME Group FedWatch shows futures traders pricing in a 71% probability the Fed will raise the federal funds rate by a quarter-percentage point next Wednesday, up from 61% one day ago.

Stocks drop as Treasury yields spike

Sticky inflation and higher oil prices sent Treasury yields soaring Thursday. The 2-year Treasury yield closed at its highest point since mid-2024, up 15.2 basis points to 4.579%. The 10-year Treasury yield hit its loftiest level since 2023, rising 12.3 basis points to 4.963%.

As for equities, the blue-chip Dow Jones Industrial Average shed 0.6% to 52,064, the broader S&P 500 fell 0.6% to 7,591, and the tech-heavy Nasdaq Composite dropped 0.7% to 26,081.

Despite closing lower for a fourth straight day, gains in several mega-cap stocks, including Apple (AAPL, +3.6%), Alphabet (GOOGL, +0.6%) and SpaceX (SPCX, +0.4%) helped limit today's losses for the main equity indexes.

AeroVironment climbs after earnings, Oracle slips ahead of its results

AeroVironment (AVAV) closed higher Thursday, rising 4.5% after the drone maker reported better-than-expected fiscal first-quarter results.

This was "the cleanest prints" for AVAV in recent quarters, says Stifel analyst Jonathan Siegmann, who has a Buy rating on the defense stock. "AVAV is finally showing substantial, quality backlog build in its key defense-tech franchises — directed energy, counter-drone, and unmanned systems."

Next up on the earnings calendar is Oracle (ORCL), which reports after tonight's close. The tech stock fell 5.2% ahead of the release of its fiscal first-quarter print, which is expected to show an 18% year-over-year rise in earnings on 28% revenue growth.

Mizuho Americas analyst Siti Panigrahi expects the cloud computing infrastructure company to exceed estimates, and he'll be watching for updates on Oracle Cloud Infrastructure (OCI), revenue performance obligation momentum, capital expenditures funding clarity, margins and free cash flow.

Argan drops despite 40% dividend hike

Argan (AGX) was another notable mover Thursday, falling 1.4% despite the energy and industrial infrastructure builder hiking its quarterly dividend by 40% to 70 cents per share. This works out to an annual payout of $2.80 and a dividend yield of 0.7% based on today's close.

"This is an exciting time for our Company as our industry experiences unprecedented demand for new dispatchable power generation to support the significant load growth driven by data centers, domestic manufacturing, and the broader electrification of the economy," said Argan CEO David Watson while explaining the company's fourth straight annual dividend hike.

Even with today's decline, the industrial stock is up nearly 29% for the year to date on a total return basis (price change plus dividends), more than doubling the S&P 500's 12.5% gain.

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An inherited stock portfolio can change your life, but it often arrives at precisely the moment you're least prepared to make major financial decisions.

"Receiving an inheritance is an emotionally charged event, usually a mix of grief, guilt, gratitude and even relief, which can create a bias toward action," says Ashley Weeks, a wealth strategist at TD Wealth. "The best thing any beneficiary can do at the outset is take a beat and gather the facts."

That doesn't mean doing nothing. Some decisions can wait, while others — such as understanding the tax consequences, account rules or required distributions that apply to your inheritance — may need more immediate action. This is where a financial adviser's guidance can be golden.

"A good adviser is also there to shed light on your blind spots and fill in your knowledge gaps, while keeping you from making emotionally charged decisions that affect your finances," says Kyle Labelle, an owner at Milestone Financial Planning.

So when should you consult an adviser after receiving an inheritance? "Immediately," according to Stephanie Temporiti, wealth adviser and executive director at Hightower Signature Wealth.

"You will want to understand the requirements for any money that needs to be distributed to you by law, as well as the tax implications for selling certain stocks or taking money out of an account," she says. "A financial planner will also identify other areas that may need attention after an inheritance, such as estate planning, insurance needs, and tax planning."

Consulting an adviser immediately doesn't mean making every decision in that moment. These five questions can help you start the inheritance conversation and create a long-term plan for the portfolio you inherited.

1. What do I need to do now — and what can wait?

One of the hardest parts of receiving an inheritance is figuring out which decisions actually need your immediate attention. The good news is that not everything does.

"Making significant decisions around money is something to do when the grief wave has somewhat subsided," Temporiti says. "Sometimes it is OK to let emotions take the front seat with decision-making; money doesn't work that way."

She writes a "now, soon, later" list for her clients. "These are the things we need to accomplish immediately, in six to 12 months and beyond," she says. Having a clear action plan can help calm financial anxieties during a time when you're already dealing with plenty elsewhere in your life.

"The process of inheriting stock can feel like a paper chase initially," Weeks says. "Whether inheriting from an estate, trust, beneficiary designation, or a TOD [transfer of death] account, the recipient will need to provide documentation and there may be a waiting period for creditor claims."

Your immediate priorities may include completing the necessary paperwork, determining exactly what type of account you inherited and identifying any required distributions or deadlines that apply.

An adviser can help you identify what needs to be addressed now and which bigger financial and investment decisions can safely be put on the back burner until the emotional heat subsides.

2. What taxes will I owe, and what is my cost basis?

Death and taxes may be the only certainties in life, but the tax treatment of inherited investments isn't always straightforward.

"If there is any uncertainty, the first question to ask is how an inherited portfolio will be taxed when positions are sold or distributions are taken," Weeks says.

One of the first things to figure out after inheriting a stock portfolio is what the IRS considers your starting point, also known as the property's cost basis. This basis will determine how much capital gains you'll owe if you sell.

If you've inherited investments directly, the cost basis is generally reset to the investment's fair market value on the date of the owner's death, although an alternative date can apply if the executor of the estate elects to use one.

But not every inherited account receives the same treatment. For example, inherited investments in a tax-advantaged account such as an IRA are subject to specific inherited retirement account tax and distribution rules. Many nonspouse beneficiaries of retirement accounts must also empty the account within 10 years.

The way the inherited property reaches you can matter, too. For example, property distributed through certain trusts may receive a different basis treatment than assets included in the deceased owner's estate.

"That difference can significantly change your tax bill when you eventually sell, which is exactly why it can make sense to slow down and understand which rule applies before you act," says Labelle.

3. Does this portfolio fit my goals, time horizon and risk tolerance?

Stocks, bonds, mutual funds and/or ETFs are part of 25% of older parents' estates, a Morning Consult survey commissioned by Kiplinger found. The portfolio you inherited was built for someone else. It may have worked beautifully for them, but that doesn't mean it's right for you.

"Once the necessary documentation is provided and the tax situation is clearly understood, the recipient of an inherited portfolio can evaluate whether the specific holdings fit their financial plan and make adjustments accordingly," Weeks says.

Your age, income needs, financial goals, investment timeline and risk appetite are all unique to you. This makes asset allocation inherently personal. An adviser can look at the inheritance alongside any investments you already own to determine the best way to combine them.

You can also ask the adviser what your target allocation should look like now given your situation and goals, then compare that with the portfolio you now own.

4. Which stocks should I keep, sell or diversify — and how should I make those changes?

Even if you discover that your inherited portfolio isn't quite right for you, that doesn't mean you need to sell everything immediately. By the same token, you also don't need to keep anything simply because someone you loved chose it.

Instead, ask your adviser to evaluate each holding in the context of your whole portfolio. You may want to keep a close eye on risk level and concentration. If a large portion of your inherited portfolio is in a single company, industry or sector, a bad turn for those investments could have an outsized impact on your new finances.

One helpful way to frame the conversation can be to ask your adviser: If I had inherited cash instead of these stocks, what would you recommend I own today?

From there, you can discuss whether it makes sense to keep each investment, sell it or diversify gradually.

"Ultimately, this relationship gives you a decision-making partner who knows you, your situation and what you're hoping to accomplish," Labelle explains.

5. How does this inheritance change my overall financial plan?

Each investment you own is only one part of a larger equation. The bigger question is what the inheritance could allow you to do differently in the rest of your financial life.

"It's important to get an understanding of how an inheritance impacts your own financial picture," Temporiti says. "This allows you to be a good steward of the money you inherited and maximize its utility."

That could mean reducing or changing your work situation, paying down debt or increasing savings to pave the way for a brighter tomorrow. It may also give you the ability to help future generations or causes you care about.

"It's easy to lose sight of the fact that money is a tool — nothing more, nothing less — to achieve our highest aspirations," Temporiti says. "This is what the deceased person wanted for you: to see you do good with the money and live your life to the fullest."

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A global benchmark for crude oil topped $100 per barrel for the first time since late July, Treasury yields rose to new highs and the main equity indexes declined for a third straight trading session on Wednesday. Amid little sign of peace in the Middle East anytime soon, markets are bracing for incoming inflation data a week before the Federal Reserve's next monetary policy meeting.

At the closing bell, the blue-chip Dow Jones Industrial Average was down 0.7% at 52,380, the broad-based S&P 500 had fallen 0.5% to 7,636, and the tech-heavy Nasdaq Composite was lower by 0.6% at 26,253.

The front-month West Texas Intermediate crude oil futures contract was up 3.9% to $96.65 per barrel. The front-month Brent Crude oil futures contract was up 3.6% to $101.45. The global benchmark last closed above the psychologically significant $100 level on July 23.

Both the 2-year Treasury yield (+2.9 bps, 4.427%) and the 10-year Treasury yield (+3.7 bps, 4.841%) reached fresh 52-week highs, while the 30-year Treasury yield rose 2.8 basis points to 5.292%.

For investors, traders and speculators, it could be as simple as cooler-than-expected incoming inflation data easing some upward pressure on interest rates and giving the world's most important central bank room to hold the target range for the federal funds rate at 3.50% to 3.75% next week.

Indeed, it could be that simple for a Fed chair still looking for the right way to communicate with markets, even after he doubled down on his primary commitment to price stability in his recent keynote speech at Jackson Hole.

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With the economic calendar in tight focus, the Bureau of Labor Statistics (BLS) will release August Producer Price Index (PPI) data before tomorrow's opening bell. The main event, the August Consumer Price Index (CPI) report, lands before the opening bell on Friday.

"A hot CPI print would all but seal a September hike and underpin a firmer dollar," Brown Brothers Harriman & Co. strategist Elias Haddad says. "A cooler reading would strengthen the case for a hold and leave the dollar vulnerable to a dovish Fed repricing."

Why CASY was down 14%

Casey's General Store (CASY, -14.2%), added to the index in April, was the worst-performing S&P 500 stock on Wednesday, even though the company beat Wall Street's fiscal 2027 first-quarter expectations and reiterated full-year guidance.

From its headquarters in Iowa, Casey's operates more than 2,900 locations in 19 states in the Midwest and the South. It's the third-largest convenience store retailer and the fifth-largest pizza chain in the U.S.

"We believe the reaction is overblown and driven largely by short-term trading dynamics on broader rotations outside of the consumer space," William Blair analysts Phillip Blee and Olivia Witte write. "We believe the drop provides a compelling entry point, especially for long-term-oriented investors, as the fundamental strengths of the model and its ability to compound earnings growth over the next decade remain intact."

Blee and Witte reiterated their Outperform (Buy) rating and their $660 12-month target price for the consumer staples stock. Their target suggests upside of about 5% from CASY's closing price on Wednesday.

UBS analyst Mark Carden reiterated his Neutral (Hold) rating, as well as his $925 12-month target price. That's more than 47% from here for CASY.

"We think CASY's 1Q results showed that it executed effectively against an uneven macro, but it may not have been enough amid investor expectations," Carden observes. The analyst cites 3.2% same-store sales growth vs a Wall Street forecast of 3.8% as a potential factor in today's price action.

Carden also notes that the first-quarter figure represents 30 basis points of acceleration compared to the fourth quarter.

Apple doesn't move much

Apple (AAPL, -0.3%) was neither the best nor the worst of the 30 Dow Jones stocks on Wednesday. It was up and down, and it finished only slightly lower.

One of the 10 best tech stocks of all time hit its intraday low soon after new CEO John Ternus took the stage to deliver brief opening remarks and introduce new versions of its leading device. It peaked into positive territory, then danced around the breakeven line into the closing bell.

"We're going to continue changing the world in ways we can't even imagine today," Ternus said before turning to his vision of the iPhone's place in a world increasingly defined by proliferating artificial intelligence (AI).

"If you were designing the ideal version of this hub from scratch, how would you do it?" Ternus posed rhetorically. "Well, first, you would want something that is always with you, deeply personal and able to bring intelligence to the moments when it matters most."

Then Ternus introduced the new iPhone 18 Pro and iPhone 18 Pro Max, as well as the foldable iPhone Duo, meeting market expectations.

"We made massive advancements in the most important areas: intelligence, performance, battery and camera," the CEO said.

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Is a sustainable turnaround in small-company stocks under way? Maybe. Since April 2025, the Russell 2000, an index of small-cap stocks, has returned a cumulative 48.1%, outpacing the 35.6% gain in the S&P 500.

Our favorite small-cap exchange-traded fund, the iShares Core S&P Small-Cap ETF (IJR), beat the S&P 500, too — but not by as much, with a 41.4% climb over the same 15-month period. The ETF tracks an index that sifts for profitability, unlike the Russell 2000, and much of the rally's early days favored unprofitable companies.

Enthusiasm around artificial intelligence (AI) has fueled the upturn. The AI buildout is now filtering down to small firms that supply the tools, components and services to the mega-cap firms, according to a recent report from Francis Gannon, co-chief investment officer at Royce Investment Partners, a small-stock shop. Beneficiaries include semiconductor component makers, as well as energy providers and construction companies (think data centers).

A mix of tech, healthcare and industrial stocks has led the charge at Core S&P Small-Cap, including triple-digit gains from broadband service provider Viasat (VSAT) and drugmaker Protagonist Therapeutics (PTGX). Over the past 12 months ending July 31, the ETF gained 33.6%; the S&P returned 19.6%.

Same old story for small caps?

Small-cap rallies have fizzled out before. But earnings growth tends to drive stock prices higher, and profitable companies have been behind recent returns in the Russell 2000. Brandon Nelson, a Calamos Investments fund manager, says he sees "significant and sustained upside" for small-cap stocks from here, supported by earnings-growth momentum and attractive valuations.

Royce's Gannon agrees. He has noticed a "gradually improving" earnings picture for many small-cap stocks. Analysts expect 54% annual growth for Russell 2000 companies in 2026 and 32% in 2027, he says in his report. That's better than the 19% and 15% year-over-year growth in earnings that analysts expect for large companies.

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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An escalating trade war in North America, on top of more shooting in the Middle East, made for another risk-off trading session on Wall Street, as investors, traders and speculators returned from a three-day weekend. After a mixed open, the main stock indexes extended their collective losing streak to two, with markets focused on incoming inflation data before next week's Federal Open Market Committee (FOMC) meeting.

The economic calendar is abbreviated, but it already feels like a long wait until the release of the August Consumer Price Index (CPI) report before the opening bell on Friday. And that's only after the Bureau of Labor Statistics (BLS) reveals August Producer Price Index (PPI) data on Thursday.

"With geopolitical tensions and oil prices on the rise, the markets may find it difficult to focus on much beyond the inflation discussion," E*TRADE from Morgan Stanley Managing Director Chris Larkin observes.

Indeed, the front-month West Texas Intermediate crude oil futures contract was up 2.4% to $93.65 per barrel on reports of fresh war-related damage to energy infrastructure around the Strait of Hormuz. The global benchmark, Brent Crude oil futures, traded as high as $99.45, approaching the psychologically significant $100 barrier.

The 2-year Treasury yield was up 1.7 basis points to 4.396% vs 4.379% on Friday, while the 10-year Treasury yield (+1.0 bps, 4.794%) and the 30-year Treasury yield (+0.5 bps, 5.251%) also ticked higher.

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Following a blowout August jobs report, odds of a rate hike next week remain near 60%. According to CME Group FedWatch, the federal funds rate futures market is pricing in a 60.4% probability the FOMC boosts its primary benchmark by 25 basis points, up from 59.4% on Friday and 44.4% a month ago.

"Unlike the stock market's reaction to the jobs report, good economic news this week — that is, cooler inflation — should be treated as good," Larkin concludes. "Anything that reduces concerns about possible Fed rate hikes will likely get a warm reception."

Intel looks particularly chipper

Utility stocks were tops among the 11 sectors defined by S&P Global Market Intelligence, while energy stocks and real estate were in the green, too. Tech stocks in general were lower on Tuesday, but semiconductor stocks surged.

And Intel (INTC, +9.1%) was the main mover from a price-action perspective, even after Qualcomm (QCOM, +3.2%) said it inked a deal to supply Amazon (AMZN, -0.6%) with custom AI chips for the e-commerce and cloud computing giant's data centers.

For its part, Intel announced a 10% price increase designed to support its profit margins. That move prompted Northland Securities analyst Gus Richard to upgrade INTC to Outperform (Buy) from Market Perform (Hold).

Richard cited "material progress" in the chipmaker's turnaround program, as well as the pricing power revealed in its price hike amid a CPU shortage.

Advanced Micro Devices (AMD, +5.9%) and Marvell Technology (MRVL, +0.8%) also posted notable gains.

At the closing bell, the tech-heavy Nasdaq Composite was down 0.3% at 26,421, the broad-based S&P 500 had slipped 0.6% to 7,673, and the blue-chip Dow Jones Industrial Average was lower by 1.2% at 52,786.

AMGN's worst day since October 2000

Amgen (AMGN, -10.1%) suffered its steepest one-day sell-off in almost 26 years and was the worst-performing Dow Jones stock on Tuesday after Novartis (NVS, -13.9%) reported the failure of an experimental cardiovascular treatment, pelacarsen, to meet phase 3 trial expectations.

Investors, traders and speculators are selling AMGN because the negative result for Novartis' pelacarsen suggests a similar outcome for Amgen's heart disease drug, olpasiran.

At the same time, BMO Capital Markets analyst Evan Siegerman cited AMGN's year-to-date outperformance vs the S&P 500 as a primary reason for downgrading the healthcare stock to Market Perform (Hold).

"Commercial execution is now the base case with shares up +34%," Siegerman writes, noting gains of more than 13% for the broad index and the NYSE Arca Pharmaceutical Index.

Amgen "continues to face significant LOE [loss of exclusivity] headwinds with more work needed for us to get comfortable with the company's longer-term trajectory." Siegerman maintained his $450 12-month target price for AMGN, upside of more than 14% from its closing price on Tuesday.

According to Dow Jones Market Data, Amgen declined by 13.4% on October 27, 2000.

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Until very recently, the stocks of America's most-hated industry — prescription drugs, of course — had been having a rough time. While the S&P 500 index was notching a return, including dividends, of well over 200% during the nine years that ended June 30, 2025, the S&P Pharmaceuticals Select Industry index eked out a mid-single-digit showing.

Then pharma stocks surged, rising more than 66% in the past 12 months. Is the recent performance of drug stocks a harbinger or an anomalous blip up on an oscillating EKG chart?

First, understand that pharmaceuticals are not rising with a healthcare tide. The complete sector — which also includes insurers, hospitals, nonprescription medicines, suppliers and medical devices — has lately performed about the same as the market as a whole. Some investors see healthcare as a haven in turbulent times because consumers can't scrimp on treating their illnesses. But something different is going on with pharmaceuticals. And it could be something big.

How the pharmaceutical industry overcomes obstacles

Pharmaceuticals have a unique supply chain, with a complicated reimbursement system. The chain is exposed to changing government rules at every curve.

Because the best new medicines are expensive, politicians of both parties have responded in ways meant to take a bite out of profits. And like many industries, drug manufacturing, much of which occurs abroad, is being hurt by President Donald Trump's tariffs.

But innovation can trump intervention, and if a drug company can keep developing powerful new medicines, it can still be exceedingly profitable. Governments have not yet curdled the secret sauce of the drug-company business model: The monopoly status that a novel prescription pharmaceutical enjoys.

A dynamic duo of pharma stocks

Investors did not suddenly wake up last year and decide to love drug stocks. Instead, two companies have been the main drivers of the sector's remarkable performance.

In a column two years ago on what I call "faith-based stocks," companies whose stocks have hit a bad patch but have bulletproof brands, I predicted Johnson & Johnson (JNJ) would "get its mojo back — somehow."

It has. J&J has returned 58.8% in the past year, mostly on the strength of its oncology therapies. Seven of them, including Darzalex for multiple myeloma, have been approved, and 23 more are in Phase 3 trials (the last stage before Food and Drug Administration approval). The company in 2023 made a smart spin-off of its consumer products division, which was less profitable than prescription drugs. (Prices, returns and other data are as of July 31, unless otherwise noted.)

Since the start of 2023, the second leader, Eli Lilly (LLY), has more than tripled to become the ninth-largest U.S. stock, with a market capitalization (price times shares outstanding) of $1.1 trillion. Pouring enormous sums into research, Lilly has cultivated nine "blockbusters" (drugs with over $1 billion in annual sales) in the past decade, such as Verzenio for breast cancer.

But Lilly's triumph has been GLP-1 weight-loss drugs. Its Mounjaro and Zepbound medicines soared in popularity last year, and Lilly's edge in mass manufacturing helped make the two drugs best-sellers among all medicines, with combined revenues of $36 billion. Lilly's first oral GLP-1 treatment, Foundayo, launched in April. This drug category also treats Type 2 diabetes and may have other uses — not yet approved by the FDA — in such diverse areas as heart and liver disease, sleep apnea, and even substance-abuse disorders, the Harvard Gazette reports.

Lilly has outdistanced such traditional pharmaceutical leaders as Merck, and the company's future looks bright. Value Line forecasts earnings will rise at a spectacular annual average of 26.5% for the next five years. Based on a consensus of analysts' projected earnings for 2027, Lilly trades at a price-earnings ratio of 27. Not unreasonable.

The two stocks are by far the largest holdings of my top exchange-traded fund recommendation, iShares U.S. Pharmaceuticals (IHE), with an expense ratio of 0.38%. Together, J&J and Lilly represent nearly 43% of assets. Normally, I wouldn't want to own an ETF so top-heavy, but this one is a good way to buy two of America's best stocks.

An alternative is a managed mutual fund such as Fidelity Select Pharmaceuticals (FPHAX), with an expense ratio of 0.67%. It has outperformed the iShares ETF by an average of roughly three percentage points annually for the past 10 years. Among its top 10 holdings are U.K.-based AstraZeneca (AZN), which focuses on cancer and rare diseases and has three of the world's 25 best-selling drugs.

Mergers have helped boost pharmaceutical prices lately. Part of the business model for large drug companies is buying up smaller biotech firms that are developing a few groundbreaking medicines, or even just one. Through June, drug companies have engaged in 33 such deals in 2026, spending $134 billion. That includes larger purchases, such as AbbVie's buyout, at a 50% stock premium, of Apogee Therapeutics, which makes drugs that fight inflammatory diseases like atopic dermatitis and asthma.

The average investor doesn't have the industry knowledge to figure out which biotech is about to get purchased by a drug giant. You're competing with investors and advisers who spend their lives studying these little firms.

It's better to buy bigger firms, invest in the entire sector through an ETF, or purchase a fund such as Franklin Biotechnology Discovery (FBDIX), another managed fund that's an ETF beater—despite an expense ratio of 1.02%. (You can buy the fund with no sales charge at platforms including Fidelity, Schwab and E-Trade.) Evan McCulloch, who has co-managed since 1997, owns smaller companies, some unprofitable but very promising, like Revolution Medicines (RVMD), which recently won approval for its drug that nearly doubled the survival rates of patients with deadly pancreatic cancer.

An edge from AI

Finding new drugs that work is an arduous and expensive process. Clinical trials have a 90% failure rate, and it costs $2.8 billion to bring a successful pharmaceutical to market. Artificial intelligence is perfectly designed to sift through billions of possible molecules before they are tested in the laboratory.

Companies like Lilly and U.K.-based GSK (GSK) are investing heavily in the technology. GSK's blockbusters include Shingrix, a shingles vaccine, and Trelegy Ellipta, an inhaler to combat COPD and asthma. The stock appears undervalued at a P/E of 10 and a 3.5% dividend yield.

Although AI is one catalyst for pharma stocks, another is the possibility that the political picture could change. Pharmaceuticals are undoubtedly a success at saving lives. Statin drugs, which lower cholesterol and now cost only a few dollars a month, have drastically reduced heart attacks and stroke. Targeted drugs have turned cancers that were once quickly fatal into longer-term illnesses. HIV, which invariably led to AIDS and death, can now be treated and prevented with two shots a year.

In the first half of 2026 alone, the FDA approved new medicines for lymphoma, ovarian cancer, hypertension, thyroid eye disease, COVID-19, schizophrenia and many more indications — 29 drugs in all. Over the preceding five years, the FDA approved 238 such small-molecule drugs and dozens of biologics, which are more-complicated medications derived from living organisms.

The field is competitive. Of last year's 10 best-selling drugs, eight are made by different companies. After all those rough years, are pharmaceutical stocks ready to take off? It's a good bet.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. He owns none of the stocks listed here. You can reach him at JKGlassman@gmail.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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Market timing is a well-known no-no in investing. But when prices dip, it's an opportunity to buy, so it helps to be prepared. That's when a wish list of stocks you want to own comes in handy. Having a stock list at the ready can help you in other ways, too. At a minimum, the list may deter you from making aimless impulse buys because it keeps your eye trained on companies you've vetted as worthy investments. And it can bolster your courage during a market decline, when fear tends to kicks in.

It may even help you keep a discerning eye on the rest of your portfolio. "Even if you're 100% invested," says Thomas Martin, senior portfolio manager at Globalt Investments, "you have to have a list of stocks that you would buy if something in your portfolio has a problem and you end up not liking it anymore."

That's one way the portfolio managers at Argent Capital Management use what they call their bench, a list of their favorite stocks — one in each sector — that they don't own, says portfolio manager Jed Ellerbroek.

Argent's large-company exchange-traded fund, Argent Large Cap (ABIG), currently owns shares in four healthcare firms. But "if we like the bench stock more than one we own, we'll swap it in. We want to own the highest-conviction stocks, the ones we believe in the most," says Ellerbroek.

Building a shopping list of stocks can take some work. "It's about doing your homework and looking at the fundamentals of a company," says Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute.

Keep in mind that a shopping list should be part of a broad investing plan that's aligned with your time horizon and your tolerance for risk. And aim to identify stocks of interest ahead of potential downturns, because declines tend to start and end quickly. We'll walk you through some of the steps you should consider as you craft your shopping list.

Worthy candidates for you stock shopping list

The best prospects for your shopping list are high-quality companies that miss out on making it into your portfolio; they meet your criteria on nearly every measure but slip on one or two. Maybe it's a market darling that's too expensive. Or perhaps it's a company that trades at a decent valuation, but one or two corporate events have you worried — a new chief executive has arrived, or the firm has just made a sizable new acquisition.

It's worthwhile, then, to review the qualities that make a good stock. This requires a good understanding of what the company does. What's its business? What end market does it serve? What problems is it solving for customers? What kind of growth rates does the business have? And where does the company stand in its peer group?

At Argent Capital, an ideal company has to meet three fundamental measures. First, the business must have a competitive advantage over peers. "Capitalism is a full-contact sport," says Ellerbroek, "so what about this business keeps its competition at bay?" Second, the company must allocate capital wisely and act in the best interests of shareholders. "The question to answer is, What does the company do with its profits?" he says. The third measure is good long-term growth prospects.

Amazon.com ticks all these boxes to Argent's satisfaction, and it's a portfolio holding. Amazon dominates the U.S. e-commerce market. It has been deploying cash — and issuing debt — to build data centers to power artificial intelligence, a long-term move that Ellerbroek believes is in shareholders' best interests. And the company's long-term driver is the steady one percentage point annual growth of e-commerce activity in the overall retail market.

Companies of interest that don't pass all three tests land on Argent's bench. For example, Netflix's outsized bid for a Warner Bros. division earlier this year (which failed) was "higher than I was comfortable with," says Ellerbroek, and it would have added debt to the company's balance sheet. "I'm nervous about its capital-allocation priorities. We're in wait-and-see mode," he says. Insurer Arthur J. Gallagher is on the bench largely because of uncertainty about whether its cybersecurity insurance business can withstand disruption from AI. Understanding why the stock is on your "buy" list — and not in your portfolio — can make monitoring that stock easier.

The ultimate test in determining whether a stock moves from watch list to Argent portfolio is its valuation. One such measure is how the stock's current price-earnings ratio compares with its industry and sector peers.

For instance, the managers for now deem shares in otherwise-attractive Intuitive Surgical, a medical device company, too expensive, says Ellerbroek. Though Intuitive shares have declined in recent months, the stock still trades at double the P/E of its peers on year-ahead estimates. "We hope the stock will continue to come down," says Ellerbroek. "We have a price target, and if it hits it, we're ready to buy."

Don't jump the gun on stock buys

Once prices shift down, do a quick review of why the stock has moved lower before snapping up shares. You want to make sure the drop isn't because of a fundamental problem with the company or industry before you buy. "Stock prices tend to come down for a reason — there are usually some questions about the company's business that have come up," Globalt's Martin says.

Semiconductor stocks have tumbled recently over concerns that there could be a slowdown in orders. "There's a realistic fear that's hit those names and caused them to fall in price. But if some of those are stocks you want to own for the long term, it may be a buying opportunity," WFII's McMillion says.

Chip company Micron Technology, for instance, posted blowout results in late June, capping a better than 800% rise in the stock over the same period a year ago. But over the next few weeks, shares sank from more than $1,200 a share to roughly $850. Part of the problem was its stratospheric rise: Short-term traders were taking profits. "They're not investing based on long-term fundamentals," says Martin. Meanwhile, in mid July, analysts significantly hiked their earnings estimates for the current year and for 2027. Martin views the dip as a buying opportunity.

The pullback in the software industry — over fears that AI will shrink the business — is more of a minefield. "Some software companies may be disrupted by AI. In that case, you might not want those firms on your shopping list," says McMillion. But some software companies have other business lines that can continue to grow, such as Microsoft with its cloud computing unit, and those discounted shares might be an opportunity, too. It's important to assess each software company individually, says McMillion, to determine AI's overall impact on its business.

Some price dips move in step with disappointing corporate moves. Red flags that might keep a company off your shopping list include trimming its guidance on future earnings growth, cutting its dividend, issuing more stock or debt, or curtailing a share-buyback program. These moves can be a drag on a stock, and investors should take them as a signal to, at the very least, look more closely at the business to find out what and whether anything fundamental has changed.

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.

Some Ideas for Your Shopping List

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Stocks closed out the week on a down note after the August jobs report increased rate-hike expectations and boosted Treasury yields. This makes the August Consumer Price Index (CPI) the most important event we're watching next week, with the inflation data landing just ahead of the September Fed meeting.

Ahead of the open, the Bureau of Labor Statistics said the U.S. added 162,000 jobs in August, easily exceeding economists' estimates of 58,000. The unemployment rate, which is derived from a separate survey, remained at 4.1%, as expected.

Additionally, job growth for June (+11,000 to +31,000) and July (+44,000 to +21,000) was upwardly revised, resulting in a combined 55,000 more jobs than previously reported.

The good-news-is-bad-news jobs report sent expectations for a September rate hike higher. According to CME Group FedWatch, futures traders are now pricing in a 58% chance the central bank will increase the federal funds rate by a quarter-percentage point when its next meeting concludes on September 16, up from 49% one day ago.

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Treasury yields resumed their march higher, too. The 2-year Treasury yield rose 4.3 basis points to 4.377% — a new 52-week peak — and the 10-year Treasury yield climbed 2.2 basis points to 4.784%.

As for equities, the blue-chip Dow Jones Industrial Average fell 0.5% to 53,414, the broader S&P 500 shed 0.4% to 7,718, and the tech-heavy Nasdaq Composite gave back 0.3% to 26,506.

As a reminder, Monday is a stock market holiday, with both equity and bond trading closed for Labor Day.

The big data point comes next week

"The August payroll release quelled any lingering labor fears, putting next week's inflation data firmly in the driver's seat for the Federal Open Market Committee's rate decision later this month," says Jeff Schulze, head investment strategist at Franklin Templeton Institute.

First up on next week's economic calendar is Thursday morning's release of the Producer Price Index (PPI). This will be followed by the August CPI, which is due out Friday morning.

Deutsche Bank economists expect PPI to be 0.2% higher from July to August and up 3.3% year over year. Headline CPI, meanwhile, should get a boost from rising energy prices, the economists say, which has them calling for 0.4% and 3.4% monthly and yearly increases, respectively.

Lululemon has its worst day in a year after earnings

In single-stock news, Lululemon Athletica (LULU) plunged 17.4% — its worst day in a year — after the athletic apparel retailer reported earnings.

For its fiscal second quarter, LULU said earnings fell 33.5% year over year to $2.06 per share, while revenue slumped 4% to $2.4 billion. Comparable sales were down 9%.

Lululemon also said it expects its top and bottom lines to contract in its fiscal third quarter, and it lowered its full-year outlook.

"We know there is much more work to be done," acknowledged interim co-CEO and Chief Financial Officer Meghan Frank on the earnings call. "We're excited our incoming CEO, Heidi O'Neill, joins us next week. And we expect she will take a deep dive into the business, evaluating our strategy and current action plans."

In the near term, Frank added, the company remains " focused on execution."

Today's post-earnings plunge is just more of the same for the consumer discretionary stock, which is now down nearly 50% for the year to date. But UBS Global Research analyst Jay Sole warns against buying the dip on struggling LULU.

"We don't believe a pullback represents a good buying opportunity," Sole says. "The main reason is we see big earnings-per-share downside over the near term and also see little upside risk."

Guidewire sinks 20% on weak guidance

Elsewhere on the earnings calendar, Guidewire Software (GWRE) sank 20%, one of its biggest one-day losses on record, after the cloud-based insurance platform unveiled its fiscal fourth-quarter results.

While the company reported higher-than-expected top- and bottom-line results, its fiscal 2027 first-quarter revenue fell short of Wall Street's estimates.

Analysts don't seem too worried. "Guidewire reported a strong close to its fiscal year with all key metrics ahead of expectations, a record 26 cloud deals in the fourth quarter, and accelerating customer adoption of the company’s early agentic offerings," says William Blair analyst Dylan Becker, who has an Outperform (Buy) rating on the tech stock.

Becker adds that GWRE "remains uniquely positioned as the trusted system of record for the P&C economy, supported by increasing momentum across carrier tiers, product offerings, and cloud migration activity," all of which will drive long-term growth for the company.

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Stocks jumped out of the gate Thursday and kept climbing into the close as market participants cheered easing Treasury yields and pulled back their rate-hike bets.

Strong gains for several mega-cap stocks also kept the wind at the market's back, with Tesla (TSLA) soaring ahead of its Cybercab event and Nvidia (NVDA) jumping on its $13 billion purchase of Hugging Face.

At the close, the blue-chip Dow Jones Industrial Average was up 1.2% at 53,686, the broader S&P 500 was 1.1% higher at 7,747, and the tech-heavy Nasdaq Composite gained 1.4% to 26,584.

Helping boost stocks was commentary from Federal Reserve Governor Christopher Waller, who said during a moderated discussion that while inflation is "meaningfully above" the central bank's 2% target, he is "seeing some signs of disinflation."

If this trend continues, Waller said he "would be inclined to hold the target for the federal funds rate at its current setting." He added, however, that if the trend does not continue, "a small adjustment" to interest rates may be necessary.

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The relatively dovish take was enough to send yields on the 2-year Treasury (-4.6 basis points to 4.34%) and 10-year Treasury (-2.2 basis points to 4.772%) lower.

The odds of a September rate hike dropped too. According to CME Group FedWatch, futures traders are now pricing in a 50% probability that the Fed will hike rates by a quarter-percentage point later this month, down from 63% one day ago.

Tesla, Nvidia pop; Broadcom drops

Tesla was one of several mega-cap stocks that closed higher Thursday, with shares climbing 5.4% ahead of the electric vehicle maker's Cybercab event in Austin, Texas, where it will debut its two-seater robotaxi.

Nvidia, meanwhile, rose 1.8% after the artificial intelligence (AI) chipmaker confirmed it will buy open-source AI platform Hugging Face for $12.9 billion — its second-largest acquisition ever.

"For Nvidia, the acquisition will provide a direct view into which models, architectures and development tools are gaining traction," wrote Kiplinger contributor Tom Taulli last week when rumors of the deal first surfaced. "Those insights could help NVDA optimize its chips, libraries and cloud services for emerging workloads."

But not all mega caps gained ground today. Broadcom (AVGO), for one, slumped 2.7% after the chipmaker reported its fiscal third-quarter results. While AVGO beat on the top and bottom lines, it forecast fiscal fourth-quarter revenue of $34.8 billion, below the $35.03 billion analysts are expecting.

Snowflake soars nearly 17% after earnings

Elsewhere on the earnings calendar, Snowflake (SNOW) surged 16.6% after the cloud-based data platform blew past Wall Street's earnings-per-share and revenue estimates for its fiscal 2027 second quarter.

"Demand for SNOW's new AI products — CoCo and Snowflake CoWork — was robust" and "guidance was impressive," says Mizuho Americas analyst Gregg Moskowitz. "We continue to believe healthy consumption activity, along with secular trends driving enterprises to modernize their data estates, set up SNOW for sustained momentum."

Moskowitz adds that the company has several positive catalysts "that will be additive to growth," including new AI products and improving go-to-market technology. He calls SNOW "a top pick."

Snowflake's post-earnings pop lifted several software stocks on Thursday, including Salesforce (CRM, +2.9%) and ServiceNow (NOW, +6.5%).

Campbell's slashes its dividend

Campbell's (CPB), meanwhile, slumped 7% after the packaged foods company reported fiscal fourth-quarter revenue of $2.14 billion, below analysts' estimates, as consumers shop for lower-priced items.

And while earnings per share were in line with Wall Street's expectations, the company said it expects revenue and earnings to be down in fiscal 2027.

Campbell's CEO Mick Beekhuizen called the results "unacceptable" and said the company is "taking decisive action to improve it." Part of this includes a 36% cut to its quarterly dividend, which will help reduce debt on its balance sheet.

The choice to cut the dividend was "difficult," Beekhuizen said, but also "a necessary decision that we needed to take."

The consumer staples stock is now down more than 20% for the year to date.

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Stocks closed higher Wednesday, though gains were contained as Treasury yields held near recent highs. Market participants also weighed weak private payrolls data, which arrived ahead of this Friday's all-important August jobs report.

At the close, the blue-chip Dow Jones Industrial Average was up 0.6% at 53,061, the broader S&P 500 was 0.5% higher at 7,666, and the tech-heavy Nasdaq Composite gained 0.5% to 26,217.

Easing Treasury yields provided some relief on Wall Street today. The yield on the 2-year Treasury hit its highest level since mid-2024 in intraday trading, but ended the session down 2.3 basis points at 4.371%. Likewise, the 10-year Treasury yield topped out at a nearly three-year peak before settling down 1.6 basis points at 4.78%.

"Today's weaker-than-anticipated ADP employment report, paired with market-friendly commentary from New York Fed President John Williams and Treasury Secretary Scott Bessent, is halting bond pain and driving bargain hunters into equities," says José Torres, senior economist at Interactive Brokers.

The ADP report showed the U.S. added 38,000 private payrolls, below the 46,000 economists expected and the lowest level since January. This, says Torres, signals "an increasingly fragile labor market that may prevent the U.S. monetary policy authority from hiking rates more than once."

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Meanwhile, New York Fed President John Williams, who, because of his position, is a permanent voting member of the Federal Open Market Committee (FOMC), told CNBC that the central bank just needs to "wait and see" on interest rates.

While the regional Fed president said that inflation data have "been encouraging," he added that "there's no clear signs right now whether monetary policy currently is sufficient to make sure we bring inflation back to target."

According to CME Group FedWatch, futures traders are currently pricing in a 62% chance the Fed will raise the federal funds rate by a quarter-percentage point when its September policy meeting wraps up two weeks from today — up from 37% one week ago.

Credo Technology plunges 20% after beat-and-raise quarter

In single-stock news, Credo Technology Group (CRDO) plunged 20% — the tech stock's worst day since January 2025 — after the high-speed digital connectivity and semiconductor solutions specialist reported earnings.

For its fiscal 2027 first quarter, CRDO reported better-than-expected earnings and revenue. It also raised its full-year revenue growth outlook.

But Wall Street may have been looking for a more substantial fiscal Q2 revenue forecast, with Credo guiding for $525 million to $535 million — only matching analysts' estimates at the midpoint.

Still, William Blair analyst Sebastien Naji says the fiscal Q1 print was "clean," and he expects "a strong inflection through the second half as the company ramps up toward its more than $600 million optical revenue target while benefiting from expanding AEC [Active Electrical Cable] engagements and the transition to 100G/200G per lane solutions."

Phillips Edison hikes its monthly dividend payout

Phillips Edison & Company (PECO), which operates grocery-anchored shopping centers, rose 0.8% today after the real estate investment trust (REIT) raised its monthly dividend payout by 6.2% to 11.5 cents per share. This works out to an annualized rate of $1.38 per share.

PECO has been a reliable dividend grower, having increased its annual payout in each of the past six years. This latest hike also marks its third consecutive increase of over 5%.

Why is dividend growth important?

"Shares in companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with," explains Kiplinger contributor Dan Burrows in his feature on the best dividend stocks for dependable growth. "That's partly because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day."

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I grew up hearing that a wise person never puts all their eggs in one basket.

Even as a young child in Paris, I practiced it before I fully understood it. When 20 French francs came my way, a few went into the piggy bank, a few were set aside for gifts for my family, and the rest bought trading cards of my favorite soccer players.

When I began as a quantitative analyst in the early 2000s, I discovered the science behind that proverb in Harry Markowitz's 1952 paper Portfolio Selection. Markowitz showed that successful investing isn't just about choosing the right eggs — it's about choosing the right baskets.

Portfolio risk depends less on what each holding does alone than on how the holdings move together.

That insight inspired the modern 60/40 portfolio, the stock-bond mix that has long been the standard of diversification for retirement savers. However, today, both baskets are becoming less effective diversifiers than many investors realize.

Let's look at equities

On the equity side, if you own an S&P 500 index fund, you probably think you're spread across 500 different companies. While that is technically the case, a small group of stocks has an outsized influence on your returns.

Semiconductor stocks reached a record 19.7% of the S&P 500 at the end of June, up from around 5% in mid-2020 and more than double the dot-com peak. That data comes from Citadel Securities strategist Scott Rubner via Yahoo Finance.

Our research at V-Square Quantitative Management has revealed a striking reality: The S&P 500 now provides diversification closer to holding roughly 50 equally weighted names than 500.

That's why it's important to "know your benchmark" and understand what you actually own. If the stock portion of your portfolio is increasingly driven by the fortunes of just a handful of companies, the traditional promise of a well-diversified 60/40 portfolio starts to break down.

Now let's look at bonds

The bond side of the portfolio faces a different challenge. The 60/40 has historically worked based on a simple idea: When stocks are down, bonds would help offset the losses.

However, that assumption has become less dependable. Investors learned this the hard way in 2022 when both asset classes fell together, resulting in one of the worst years ever for a traditional balanced portfolio. According to Morningstar data:

• The S&P 500 fell 19.4%
• The core bond index lost 12.9%, its worst year on record
• A benchmark 60/40 blend dropped 15.3%

Recent research from State Street also suggests stocks and bonds are more correlated than they have been during much of the past decade.

The result is that investors can no longer assume the bond allocation will provide the same level of diversification it once did, making the traditional 60/40 portfolio less resilient during periods of market stress.

What's the problem?

The problem isn't that investors own too few assets, it's that many of those assets are exposed to the same risks. In other words, there may be plenty of eggs, but not enough baskets, and investors need to look elsewhere for diversification.

Real assets have spent 2026 making their case. The Bloomberg Commodity Index returned 14.4% in the first half of the year, one of its strongest starts on record.

At the same time, the FTSE Nareit All Equity REITs Index gained 14.4% through late June, outperforming the S&P 500, while also offering a 3.7% dividend yield.

When several real asset classes are performing well at the same time, it suggests they're being driven by long-term trends rather than a single short-term market event.

Part of what makes real assets appealing is how entrenched they are in everyday life. They include the toll bridge you crossed this morning, the airport you flew through last month, the nursing home caring for a parent, the data center powering every online search, the copper in your home's wiring and the gold stored in vaults.

Their cash flows come from real things like tolls, leases, rents and regulated utility rates, rather than the earnings of technology companies.

Growing demand for physical assets

Ironically, the same AI buildout that has made the stock market more concentrated is also creating enormous demand for these physical assets. The International Energy Agency projects that electricity use from data centers will roughly double by 2030 after growing 17% last year, nearly six times the pace of overall demand.

Every new AI model needs power plants, transmission lines, land, cooling systems and critical minerals to operate. Investors who own the S&P 500 participate in the companies designing AI chips and software, but much of the infrastructure making that growth possible sits outside the index. Owning those assets can provide exposure to a different set of return drivers.

There are several ways individual investors can add real assets to a portfolio. The simplest is through low-cost index funds and ETFs, which generally fall into four categories:

• Commodities, which invest in raw materials like energy and metals
• Natural resources, which own the companies that produce those materials
• Infrastructure, which invests in assets such as toll roads, airports, pipelines and utilities
• REITs, which own income-producing real estate including warehouses, data centers and housing for older people

Rather than betting on a single asset like gold, investors may benefit more from owning a diversified mix of these sectors because each tends to respond differently to changes in the economy.

One final consideration is taxes. REIT dividends are generally taxed as ordinary income, and many broad commodity funds can be less tax efficient than traditional stock funds, making them good candidates for an IRA or other tax-deferred account when possible.

The bottom line

Real assets are not a substitute for stocks and bonds, nor are they immune to volatility. Bloomberg's midyear review notes the commodity index finished June 14% below its May peak, so anyone who bought after the rally quickly experienced the downside.

Investors should establish a target allocation they're comfortable holding through different market environments, rebalance periodically and resist the temptation to chase whichever asset class is leading at the moment.

In 1952, Harry Markowitz gave mathematical form to the advice I heard as a child. More than 70 years later, that principle still holds: Diversification is about putting your eggs in different baskets.

The question for today's investors is whether the baskets they own truly answer to different economic forces.

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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.

Escalation in the Middle East made for higher crude oil prices and interest rates but lower levels for the main equity indexes again Tuesday. Indeed, the worst month for the stock market started on a note consistent with historical seasonality data, as well as recent geopolitical developments.

The front-month West Texas Intermediate crude oil futures contract rose another 5.7% to $90.64 per barrel after a private maritime security firm, Marisks, reported attacks on two tankers transiting the Strait of Hormuz on Monday, and the U.S. launched new strikes against Iran on Tuesday.

More war on top of more government spending on top of more borrowed capex for the AI boom means more inflation everywhere, at least according to expectations reflected in global bond yields.

The yield on the 10-year Japanese government bond broke above 3% for the first time since 1996, for example, and the 30-year U.K. government bond yield hit its highest level since 1998.

Meanwhile, the yield on the 2-year Treasury hit a new 52-week intraday high of 4.400% and closed up 4.8 basis points to 4.398%. The 10-year Treasury yield (+3.4 bps, 4.792%) and the 30-year Treasury yield (+1.7 bps, 5.266%) were up again, too.

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A month ago, the probability of a rate hike at the conclusion of the September 15-16 Federal Open Market Committee (FOMC) meeting was 67.0%. A week ago, according to CME FedWatch, it was 39.6%.

Today, with upward pressure on prices rising again, the odds of a 25-basis-point increase in the federal funds rate are back up to 68.2%.

It's "risk off" right now

At the closing bell, the Dow Jones Industrial Average was down 0.8% at 52,766, the broad-based S&P 500 had shed 0.7% to 7,631, and the tech-heavy Nasdaq Composite was lower by 1.03% at 26,099.

Energy stocks, including Chevron (CVX, +2.4%) with its new deal to exploit Venezuelan oil reserves, led to the upside.

Consumer staples stocks, including Procter & Gamble (PG, +0.8%), and healthcare names such as UnitedHealth Group (UNH, +1.8%) also benefited from a rotation into traditional "risk-off" sectors. Utility stocks were up, too.

Apple (AAPL, +2.6%) was the best-performing Dow Jones stock during its first trading session under new leadership.

If new CEO John Ternus does what old CEO Tim Cook did in terms of market cap multiplication, AAPL will be worth well north of $60 trillion by the time he steps aside in a decade and a half or so. Apple's market cap at today's close was $4.75 trillion.

PANW gives back some of its big gain

Palo Alto Networks (PANW, -5.2%), a cybersecurity stock with an AI twist good enough to send it more than 100% higher since early May, retraced some of that move ahead of its turn on the earnings calendar after today's close.

Wall Street expects PANW management to report earnings of 98 cents per share, up from 95 cents a year ago, on revenue growth of more than 33% to $3.35 billion.

Stifel analyst Adam Borg reiterated his Buy rating on the tech stock and raised his 12-month target price from $330 to $415 in a mid-August earnings preview.

Borg noted that PANW was a "crowded long" with "a rich multiple and elevated expectations."

At the same time, citing recent vendor checks that continue to support its "strong positioning," the analyst believes "any near-term weakness, should there be any, gets bought."

Did Novartis get a meaningful lift?

Novartis (NVS, +6.0%), a large-cap stock whose American Depositary Receipts (ADRs) trade on the New York Stock Exchange (NYSE), had barely outperformed the S&P 500 year to date through Monday.

But the Switzerland-based drugmaker got a big boost Tuesday after management announced positive Phase III trial results for a pill to treat multiple sclerosis (MS).

According to Novartis, "Remibrutinib, a highly selective and potent oral Bruton's tyrosine kinase (BTK) inhibitor, demonstrated superiority versus teriflunomide in reducing annualized relapse rate (ARR) and inflammatory brain lesions with a favorable safety profile."

That's good news for people with MS and those who care about them. We'll see whether the potential blockbuster drug sways Wall Street analysts.

Five rate NVS a Buy, but four say it's a Hold and three say it's a Sell. That's good for a consensus "Hold" rating, according to S&P Global Market Intelligence.

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All three main equity indexes opened lower and stayed in the red through the last trading session of August amid a re-escalation of war in the Middle East. Crude oil spiked and the 10-year Treasury yield hit its highest level since January 2025 after the U.S. attacked Iran for the first time in a month, and the Islamic Republic responded by striking its neighbors Jordan and the United Arab Emirates.

The yield on the 10-year Treasury rose to 4.744% from 4.722% on Friday, reaching a 19-month intraday high of 4.768%. The 30-year Treasury yield (+4.1 bps, 5.249%) was up, too, but the 2-year Treasury yield (-0.1 bps, 4.339%) ticked lower. The front-month West Texas Intermediate crude oil futures contract added 3.0% to $85.92 per barrel.

"With traders tracking geopolitical volatility as well as potential seasonal volatility," E*TRADE from Morgan Stanley Managing Director Chris Larkin writes, "it will be interesting to see which market impulse from last week might carry over to this week — the S&P 500's net gain, or its Friday weakness following comments from Kevin Warsh."

The Fed chair reiterated his commitment to price stability during his keynote speech at the Jackson Hole Economic Symposium, saying the central bank would "have work to do" should inflation not move toward its 2% target "clearly and at sufficient speed."

In addition to weighing the impact of escalating war in the Middle East, the Fed will take account of the August jobs report on Friday. "Unexpectedly strong labor-market data this week might be taken as bad news by the market, since it could reinforce expectations for a rate hike," Larkin observes.

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CME FedWatch shows a 66.1% probability of a 25-basis-point increase to the federal funds rate at the conclusion of the September 15-16 Federal Open Market Committee meeting, up from 57.0% on Friday.

At the closing bell, the Dow Jones Industrial Average was down 0.7% at 53,185, but the blue-chip index ended the month with a gain of 1.3%. The broad-based S&P 500 shed 0.3, but it was up 2.6% for August at 7,686. The tech-heavy Nasdaq Composite ended the day lower by 0.1% and the month higher by 3.9% at 26,370.

Another legendary Apple CEO steps aside

Apple (AAPL, -0.9%) wasn't among the handful of Dow Jones stocks posting gains today. But the iPhone maker is up about 2,740% over the trailing 15 years to August 24, 2011, the day Tim Cook took over from Steve Jobs as CEO of the iconic technology company.

Cook is stepping down from that role effective tomorrow but will remain as executive chairman.

"If there was one picture to define Tim Cook’s legacy, it would be a stock chart during his tenure," Freedom Capital Markets Chief Market Strategist Jay Woods writes. "Started at the bottom left and ended at the top right. A long-term uptrend with higher peaks and lower valleys along the way."

In addition to the total return, Woods notes that AAPL executed 7-for-1 and 4-for-1 stock splits, was added to the Dow, was the biggest stock in Warren Buffett's Berkshire Hathaway (BRK.B, -0.2%) equity portfolio and was, indeed, the biggest company in the world by market cap for a long stretch under Cook's leadership.

Succeeding Cook (and Jobs) is John Ternus. "At 50, Ternus is roughly the same age Cook was when he replaced Jobs," Woods observes, "but his engineering and product background offers Apple something different as it searches for its next big innovation and plays catch-up in AI. Cook proved you could successfully replace a legend, now Ternus gets the unenviable task."

California wildfire law doesn't protect EIX, PCG

Edison International (EIX, -22.9%) and PG&E (PCG, -20.0%) were the two worst S&P 500 stocks on Monday after the California State Assembly passed an amendment to wildfire legislation that doesn't include liability protection for utilities.

Gov. Gavin Newsom wanted to limit what utilities had to pay to insurance companies, some survivors, local governments and businesses claiming damages from wildfires caused by their electricity infrastructure.

According to CalMatters, the governor and leaders of California's legislature agreed on a final bill that leaves out all of Newsom's proposals. Newsom had been concerned about the impact of rising costs on investor confidence in the utility stocks.

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Whether you're a spender or a saver, a speculator, trader or investor, you're only human.

And there's no sense in not being constructive about it.

If you aspire to be a successful investor, the first thing to do is acknowledge what Ritholtz Wealth Management Chief Investment Officer Barry Ritholtz calls your "lizard brain."

Don't be shy, we've all got it. It's a feature of evolutionary psychology.

The second thing to do is take our short quiz to see whether you're really on your best behavior as an investor.

More on investing from the Kiplinger team:

• Greed, Fear and Market Volatility: A Financial Adviser's Guide to Keeping Emotions Out of Investment Decisions
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• These 7 Investment Behaviors Hurt Retirees the Most, But It's Not Too Late to Change Your Ways
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The main equity indexes reacted well at first to Federal Reserve Chair Kevin Warsh's Jackson Hole Economic Symposium keynote speech on Friday. Treasury yields and odds of a rate hike in September rose, too. Stock market momentum waned as another low-volume late-summer trading session wore on, and all three indexes turned lower heading into the weekend.

At the closing bell, the Nasdaq Composite was down 0.5% at 26,402, but the tech-heavy index was up 0.8% for the week. The broad-based S&P 500 shed 0.3% on Friday but added 0.5% for the week to 7,711. The Dow Jones Industrial Average was off 0.02% on Friday, but Papa Dow rose 0.5% over the five days to 53,560.

Are markets pricing in a higher target range for the federal funds rate following the next Fed meeting, less than a month from now? Are investors, traders and speculators digesting Thursday's mini-boom for technology and getting ready for a return to normal trading activity after Labor Day?

Who's to say with any real authority why any one buyer or seller made that decision, let alone all of them in aggregate.

At the same time: "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed," Warsh said shortly after Friday's opening bell. "Otherwise, we have work to do."

And, today, that means higher interest rates.

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The 2-year Treasury yield was up 13 basis points to 4.352% from 4.232% on Thursday. The 10-year Treasury yield (+5.2 bps, 4.724%) and the 30-year Treasury yield (+1.8 bps, 5.209%) were higher, too.

CME FedWatch now shows a 57.5% probability of a 25-basis-point rate hike at the conclusion of the September 15-16 Federal Open Market Committee meeting, up from 35.4% on Thursday.

"Warsh's speech at Jackson Hole went further than we had anticipated in signaling that he is willing to hike rates if underlying inflation is not moving toward 2% 'clearly and at sufficient speed,'" Barclays Chief U.S. Economist Marc Giannoni writes. "We are changing our Fed call, now expecting a 25-basis-point hike in September and another one in December."

MRVL sinks 10%

Marvell Technology (MRVL, -10.3%) was the closing act for Nvidia (NVDA, -4.6%) on this week's earnings calendar, and it didn't go particularly well for the semiconductor stock from a pure price-action perspective.

Marvell beat Wall Street expectations for its fiscal second quarter revenue (+36.5% year over year) and earnings per share (+40.3% YoY). But the beat just wasn't big enough in the wake of MRVL's more than 100% share-price surge since Nvidia's $2 billion investment in the company in late March.

Still, Morgan Stanley analyst Joe Moore, citing a good quarter and outlook "largely in line with prior management expectations," reiterated his Equal Weight (Hold) rating, yet raised his 12-month target price for the AI stock from $224 to $246.

The analyst notes that Marvell now sees 2027 data center growth of 60%, up from 50%, which should drive 10% upside for earnings.

"While we wish that positive long term commentary left more room for short term beats and raises," Moore writes, "we generally agree with the long term optimism." He cites Marvell's work to diversify its growth drivers, beyond custom chips.

Moore concludes that "with AI strong across the board it's a target-rich environment," but he'd "be tactically long for the investor day if the stock sells off."

NVDA, meanwhile, was the worst Dow Jones stock on Friday, a day after posting its biggest intraday gain in more than a year.

You can catch up with this week's developments around the AI revolutionary on our Nvidia earnings blog.

There will be no $50B deal for PYPL

It was a bad day for Marvell, but PayPal Holdings (PYPL, -12.7%) was the worst S&P 500 stock on Friday after Bloomberg reported that private equity firm Advent International and privately held fintech Stripe have abandoned their joint attempt to buy the payments processing pioneer co-founded by Elon Musk.

The Wall Street Journal, citing people familiar with negotiations, said on August 14 that PayPal saw a $60.50 per share offer as "insufficient, but that the parties were talking about a higher price."

Takeover talk has been churning since February, and PayPal's expectations-beating second-quarter earnings helped the financial stock extend a 60%-plus rally off a mid-February 52-week low.

As Keefe, Bruyette & Woods analyst Sanjay Sakhrani notes, the buyout bid "had been a source of support for PYPL." According to Mizuho Securities analyst Dan Dolev, it's all about PayPal's fundamentals now.

Of course, as Bloomberg concludes, Advent and Stripe could come back with another bid "if the situation changes."

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Stocks closed higher Thursday as market participants cheered Nvidia's (NVDA) blowout earnings report. Wall Street also monitored the start of the Jackson Hole Economic Symposium, where Federal Reserve Chair Kevin Warsh is set to deliver his keynote speech tomorrow morning.

At the close, the blue-chip Dow Jones Industrial Average was up 0.2% at 53,569, the S&P 500 was 0.7% higher at 7,730, and the tech-heavy Nasdaq Composite had gained 1.6% to 26,541.

The equity market got a major lift from Nvidia, which jumped 8.7% — its biggest one-day percentage gain since April 9, 2025 — after the artificial intelligence (AI) bellwether reported earnings late Wednesday.

For its fiscal 2027 second quarter, NVDA said earnings and revenue more than doubled year over year. It also gave strong guidance for its fiscal 2027 third quarter and said it expects revenue to grow 70% in fiscal 2028.

"It is the case that we've never forecasted or never guided to a year in advance," said Nvidia CEO Jensen Huang on the earnings call. "And even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%." Huang added that Nvidia has "a huge year coming up next year, and it's going to be pretty extraordinary."

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"This is a very strong balance sheet with a clear vision of growth, and they are putting up numbers consistently to support that," says Brian Mulberry, chief market strategist at Zacks Investment Management.

While Mulberry notes that some of this is already priced into the AI stock, he expects Nvidia "to innovate, and with their scale, it will be difficult to unseat them any time soon."

For the full rundown on all things Nvidia, check out our earnings blog.

Salesforce soars 23% after earnings

NVDA's post-earnings pop wasn't enough to make it the best Dow Jones stock Thursday. That honor went to Salesforce (CRM), which surged 22.6% — its second-best day ever, behind only August 26, 2020, when the tech stock jumped 26% in a single session.

After Wednesday's close, the software-as-a-service (SaaS) provider reported higher-than-expected fiscal 2027 second-quarter earnings and revenue. The company also raised its full-year revenue forecast, now expecting top-line growth of 11% to 12% vs its previous outlook of 10% to 11%.

"We just delivered one of our best quarters ever, outperforming across every key metric,” said Salesforce CEO Marc Benioff in the earnings release. "AI is delivering value across every layer of our platform. We're seeing incredible demand for our AI and data products, with ARR [annual recurring revenue] about to cross $4 billion."

A separate announcement detailed an expanded partnership between Salesforce and Anthropic. Specifically, the two firms have launched Claudeforce, a plugin that connects Anthropic's Claude AI chatbot into Salesforce's software products companies use.

The impressive earnings results and integration of Claude "reinforce Salesforce's positioning in the agentic AI landscape, support the reacceleration narrative, and should ease bear case concerns around AI disruption risk," says Oppenheimer analyst Brian Schwartz, who reiterated an Outperform (Buy) rating on the blue chip stock and raised his price target to $275 from $250.

Nordson raises its dividend by 15%, its 63rd straight hike

Elsewhere on the earnings calendar, Nordson (NDSN, -1.1%) reported better-than-expected fiscal third-quarter earnings and revenue and raised its full-year outlook.

The company, which creates products and systems to apply, spray and measure fluids such as adhesives and paints at the industrial level, also hiked its quarterly dividend by 15%.

NDSN has long been one of the best dividend growth stocks to own, and was added to the Dividend Aristocrats in early 2023. This latest increase marks the 63rd straight year the company has boosted its payout.

What to watch for at Jackson Hole

The week's not over yet, and tomorrow's keynote speech by Fed Chair Warsh at the Jackson Hole Economic Symposium could create some market volatility.

It's difficult to predict the tone Warsh will take in his speech, says Brandon Zureick, chief economist and senior managing director at Johnson Investment Counsel. "Since taking office, he has favored a more restrained communications approach and has moved away from explicit forward guidance."

Expectations are for the Fed chair to reiterate his commitment to bringing inflation back down to the central bank's 2% target, but stop short of giving specific guidance on interest rates.

But Zureick notes that several other Federal Reserve officials are speaking at Jackson Hole, and today, "Kansas City Fed President Jeffrey Schmid and Cleveland Fed President Beth Hammack both delivered hawkish assessments of monetary policy."

The economist believes that their remarks "underscore the risk that Warsh's address may lean more heavily toward restoring price stability than investors currently expect."

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

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

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

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

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

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

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

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

Nike hits a 12-year low after downgrade

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

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

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

Nvidia drops ahead of earnings

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

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

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

Nvidia earnings and Jackson Hole

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

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

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

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

Meta agrees to $18 billion landmark settlement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Canadian banks are above the fray

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

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

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

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

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

DKS misses big

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

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

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

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

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In early 2026, Wall Street decided enterprise software companies — also known as SaaS companies, which stands for Software as a Service — were going to die.

Traders at Jefferies coined it the "SaaSpocalypse," a roughly $2 trillion wipeout across enterprise software stocks built on a single, simple and terrifying idea: If artificial intelligence (AI) agents can do the work that software seats enable, nobody needs the seats anymore. If 10 AI agents can do the work of 100 sales reps, you don't need 100 CRM licenses — you need 10.

That's a 90% haircut to a business model the entire SaaS industry was built on, and for a few violent months, the market priced it in across the board — in good businesses and bad ones alike. The mood was sell first, ask questions later.

For many of the names, the market was right to sell. HubSpot (HUBS), Atlassian (TEAM), and ZoomInfo (GTM) were the textbook cases. These companies offered tools for small and medium-sized businesses (SMB) with low switching costs, doing exactly the kind of mechanical, repeatable work an AI agent handles natively, with no meaningful data moat to defend the seat count.

Those stocks got hit and mostly stayed hit, because the bear case wasn't a panic — it was a correct read of the business.

But the five stocks below are the other half of the story: names that got dragged down by the same indiscriminate selling, and then did something the market didn't initially price in; they turned AI adoption into their biggest growth driver instead of their biggest threat.

They didn't survive SaaSmageddon by hiding from the AI disruption narrative. They survived by hijacking it, and in some cases by more than doubling off their 2026 lows.

Here's the snapshot, then the breakdown, survivor by survivor. Data is as of August 24, 2026.

CrowdStrike: The cleanest flip

• Share price: $190.67
• Market value: $194.1 billion
• Next catalyst: Fiscal 2027 Q2 earnings on Wednesday, August 26

How it got caught: CrowdStrike (CRWD) was as exposed as anyone to SaaSmageddon logic on paper — a premium-multiple, subscription-based security platform, exactly the profile the panic targeted first. Shares fell as low as $85.68 this year before the turn.

The flip: CrowdStrike is the cleanest example of a stock that got dragged into the panic and then personally rewrote the narrative. CEO George Kurtz reframed AI cybersecurity risk on two tracks: enterprises need cybersecurity to deploy AI safely in the first place, and AI itself is creating entirely new "greenfield attack surfaces" — neoclouds, GPU clusters, agentic workloads — that didn't exist a few years ago. Both tracks point in the same direction: more spend on CrowdStrike's Falcon platform, not less.

On the June earnings call, Kurtz connected the dots even more explicitly, tying the timing of Anthropic's Mythos model launch directly to the acceleration in enterprise security buying he was seeing in his own pipeline.

The numbers back it up. CrowdStrike posted record net-new ARR (annual recurring revenue) of $255.8 million in its fiscal 2027 first quarter (+32% year over year), pushing the company's year-ending ARR to $5.51 billion, up 24% from the year prior.

Falcon Flex accounts — the company's land-and-expand subscription model — now exceed $1.9 billion, more than double where they stood a year ago.

The cybersecurity stock is up roughly 63% year to date, and briefly touched an intraday record above $227 in mid-August. Plus, the company's Fal.Con 2026, its annual user conference, sold out faster than any prior year — a small but telling demand signal ahead of its late-August earnings print.

The outlook: Wall Street sees CrowdStrike revenues rising 23% in fiscal 2027, another 22% in fiscal 2028, 21% in fiscal 2029, and 21% again in fiscal 2030 — so this is a durable 20% revenue grower.

EBITDA (earnings before interest, taxes, depreciation and amortization) margins are also expected to expand from the high-20s to the low-30s in the next few years, so we're talking a 25%+ compounded EBITDA grower here.

The valuation isn't cheap (107 times forward EBITDA estimates), but that multiple makes sense for a high-growth, wide-moat SaaSmageddon survivor. Estimates keep rising, and the chart looks great, so this one likely keeps powering higher.

Palo Alto Networks: The platform play

• Share price: $350.89
• Market Cap: $285.3 billion
• Next catalyst: Fiscal Q4 earnings on Tuesday, September 1

How it got caught: Palo Alto Networks (PANW) fell to $139.57 this year during the broader software drawdown, dragged alongside its cybersecurity peers even though its underlying growth never actually broke stride. PANW is a case study in how indiscriminate the SaaSmageddon selling really was.

The flip: Where CrowdStrike sells best-of-breed point protection, Palo Alto sells consolidation — the pitch being that large enterprises don't want to manage a dozen security vendors when AI has already made their attack surface more complex.

Palo Alto CEO Nikesh Arora has been direct about it: frontier AI compresses attack timelines from months to minutes, which raises the value of an integrated platform rather than lowering it. That's the same SaaSmageddon-flip logic as CrowdStrike, delivered through a bundling strategy rather than a best-in-class one.

Jefferies analyst Joseph Gallo captured the broader dynamic well, noting that investors are rotating toward large-scale platform leaders seen as more resilient amid AI-driven disintermediation, rather than smaller point solutions.

Next-gen security ARR reached $8.1 billion in fiscal Q3, up 60% year over year, with remaining performance obligations up 36% to $18.4 billion — a better read on forward demand than any single quarter of revenue.

The stock is up 90% year to date and has outpaced even CrowdStrike's run over the same stretch.

The outlook: Much like CrowdStrike, Palo Alto Networks is set up as a roughly 25% compounded EBITDA grower over the next several years, powered by low-20s revenue growth and mild EBITDA margin expansion.

But its valuation is much more attractive than CrowdStrike, with PANW trading at just 62 times forward EBITDA for a similar high-growth, wide-moat company profile. If CrowdStrike looked good, Palo Alto Networks arguably looks great.

Axon Enterprise: The wild card

• Share price: $597.28
• Market value: $48.5 billion
• Next catalyst: Reported Q2 earnings on August 5; its next print is in early November

How it got caught: Axon Enterprise (AXON) isn't cybersecurity — it's public-safety SaaS, i.e., emergency dispatch, incident reporting and so on — and that's exactly why its inclusion here matters: it proves the survivor pattern isn't sector-specific.

We flagged Axon ourselves back in the depths of the panic as showing "technical weakness plus SaaSmageddon risk," and shares bottomed at $339.01 this year before the AI story took over the narrative entirely.

The flip: Axon's AI Era Plan initiative bundles Draft One (AI report writing), real-time translation, and redaction tools on top of its core TASER and body-camera hardware. It has pushed premium per-officer pricing from $99 a year in 2017 to $569 a year today, with the AI Era Plan alone adding $199 per user annually.

AI product revenue grew over 700% year-over-year in Q1, AI bookings were up 140%, and Chief Financial Officer Brittany Bagley noted more than a third of software revenue now comes from offerings beyond the core Evidence platform. Real-world traction backs the pitch: Rowlett Police Department reported a 75% cut in evidence-redaction time, and Fort Collins PD saw a 67% reduction in related workload.

The second quarter, reported on August 5, delivered the company's 10th consecutive quarter of 30%+ top-line growth, with revenue up 35% to $904.3 million and full-year guidance raised to 32% to 34% growth, backed by $15.1 billion in future contracted bookings.

Shares jumped as much as 17.8% on the guidance raise, and counter-drone subsidiary Dedrone crossed $100 million in revenue for the first time, with bookings there up 500% year over year.

The outlook: Axon has sustained 30%+ revenue growth every year since 2022. With new AI products in the mix, we don't see any reason why that would change going forward. Coupled with continued albeit mild EBITDA margin expansion from economies of scale and pricing power — Axon is the only game in town for a lot of their products — this is a 40%+ compounded EBITDA grower for the next several years.

And that is fantastic growth profile for a tech stock that is now just trading at 43 times forward EBITDA – one of its lowest valuation multiples of the last five years. Of all the SaaSmageddon survivors, AXON may be the most attractively undervalued.

Snowflake: Not a reversal, but a reset

• Share price: $322.78
• Market value: $111.98 billion
• Next catalyst: Fiscal 2027 Q2 earnings on Wednesday, September 2

How it got caught: The bear case for Snowflake (SNOW) during SaaSmageddon was structurally the scariest of the five: the idea that AI would let enterprises query their own data directly, cutting the data warehouse out of the loop entirely. Shares fell to $118.30 this year on that fear before the recovery began.

The flip: What actually happened is close to the opposite: Snowflake made itself the governance layer AI agents need to run safely on enterprise data, rather than something those agents route around.

Adoption of Snowflake's Cortex AI solution is the tell — roughly 9,100 accounts now use Snowflake AI, up from 7,300 last quarter, and Snowflake Intelligence (its agentic AI product) nearly doubled its customer base to 2,500.

The newly launched Cortex AI Gateway extends that further, positioning Snowflake as the control point for how enterprises authenticate, secure, and manage cost across both first- and third-party AI agents — a governance pitch that got a boost in late July and early August as partners Alteryx, Aembit and 1Password integrated directly into the ecosystem.

The underlying numbers have been consistently strong: product revenue of $1.3 billion in the most recently reported quarter (+34% year over year), remaining performance obligations of $9.2 billion (+38%), net revenue retention stabilized at 126%, and 779 customers now generating more than $1 million in trailing 12-month product revenue, up 29% year over year. Management's own long-range narrative projects $10.1 billion in revenue and $792.7 million in earnings by 2029.

Shares are up 22% in the past month alone.

The outlook: Earnings-per-share (EPS) estimates on Snowflake have been flying since analysts realized this is an AI winner. Since the start of the year, Snowflake's consensus fiscal 2027 EPS estimates are up 20%. Consensus FY2028 EPS estimates have also risen 20%.

Into 2030, Wall Street now sees Snowflake growing revenues at a steady 25%+ clip, with EBITDA margins rising from 17% this year to 22% by the end of decade, for an EBITDA compounded annual growth rate of nearly 33%.

That is a great growth profile, and it more than compensates for the rich valuation multiple here (99 times forward EBITDA estimates), especially since estimates keep rising and the growth profile keeps getting better.

SNOW stock looks good for the rest of the year — and beyond.

Rubrik: The direct Anthropic play

• Share price: $98.04
• Market value: $20.2 billion
• Next catalyst: Fiscal 2027 Q2 on Thursday, August 27

How it got caught: Rubrik (RBRK) is the smallest name here, and it fell the hardest in relative terms — down to $42.25 this year, a level that reflected both SaaSmageddon-era selling and its own pre-profitability, GAAP-loss-making profile. This made it an easy target once the market decided to punish anything unprofitable and subscription-based at once.

The flip: Rubrik is also the most direct Anthropic tie-in. The company has genuine access to Claude's Mythos Research Preview through Project Glasswing (an Anthropic security project), using it for AI-powered vulnerability detection. And it has integrated Rubrik Agent Cloud with Amazon Bedrock AgentCore.

Like CrowdStrike and Palo Alto, Rubrik's pitch is that AI adoption makes data resilience and identity protection more essential, not less — reinforced by its Agent Identity product, which manages and controls AI agents' access.

CEO Bipul Sinha has been explicit that the company sees itself less as a backup vendor now and more as the "security and AI operations" company.

Fiscal 2027 Q1 results showed 39% year-over-year revenue growth to $387.1 million and subscription ARR up 32% to $1.57 billion, with net revenue retention above 120% and record net-new ARR.

Loop Capital initiated coverage on the AI stock with a Buy rating and $100 target on August 4; KeyBanc raised its target to $100 on July 16; BMO raised to $98 on July 10; and BTIG lifted its target to $109 from $91. That's four separate price-target increases in about a month, all landing in a tight $98–$109 band just above the current price.

The outlook: The top-line momentum here is indisputable (this is a steady low-to-mid-20s revenue grower with a long runway ahead), but the most impressive thing about RBRK is how they are using AI to dramatically improve efficiency and internal margins.

This was a company that was running consistent losses until recently. And now, it is reporting positive EBITDA, profits and free cash flow, with all of them scaling rapidly (free cash flow is expected to rise about 40% this year and another roughly 40% next year).

This massively successful profitability ramp is exactly the sort of story that Wall Street will latch onto amidst SaaSmageddon fears — and it is why RBRK stock should continue to head higher.

The bottom line on these SaaSmageddon survivors

SaaSmageddon wasn't wrong about the threat — AI genuinely is changing how enterprise software gets bought and used.

It was wrong to assume every seat-based company would be a casualty of that change instead of a beneficiary.

CrowdStrike, Palo Alto, Axon, Snowflake and Rubrik all found the same escape hatch: make the platform the thing that makes AI safe, governed or actionable, and the seat count stops mattering as much as the platform does. Meanwhile, the names that didn't find that escape hatch — HubSpot, Atlassian, ZoomInfo among them — are the control group. They prove the difference wasn't luck. It was whether the business model had a second act available at all.

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

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

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

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

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

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

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

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

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

The other chip stock on the earnings calendar

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

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

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

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

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

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

Expedia is on the move again

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

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

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

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

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

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

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

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

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

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

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

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

Nvidia's growth is about supply and demand

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

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

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

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

HOOD tops the S&P 500

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

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

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

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

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

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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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• Here's What Berkshire Hathaway Bought and Sold in Q2

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 the second quarter (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 it has bought and sold the homebuilder several times in the past. While Berkshire boosted stakes in some existing positions, both new and old, it also continued to pare back 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 buying and selling, 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.

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 made 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.