Morning in New York: S&P 500 on the Verge of New Records

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Capital Markets Research at Freedom Broker.

Tuesday’s key macroeconomic release will be the JOLTS report for June. According to the Bloomberg consensus, the number of job openings fell from 7.594 million in May to 7.454 million. A weaker-than-expected result could strengthen the case for the Fed to ease monetary policy and provide support for Treasury bonds and growth stocks. If, however, the data unexpectedly comes in stronger than the consensus, it will put pressure on the technology sector by pushing up yields on debt instruments. At the same time, the indicator remains volatile, so to more accurately assess the state of the labor market, investors should focus on hiring and layoff trends—both layoffs initiated by employers and voluntary resignations. Also this Tuesday, June data on the trade balance (consensus: a $73 billion deficit; May: $77.6 billion) and industrial orders (consensus: +0.2%; May: -1.3%) will be released.

The technology sector is being buoyed by Palantir’s (PLTR) strong earnings report and an upward revision to its full-year guidance. Investor interest in the AI segment is growing ahead of AMD’s (AMD) quarterly earnings release, with data center revenue trends and demand for AI accelerators being key metrics for investors, as well as its own forecast for the third quarter. SpaceX (SPCX) will present its first earnings report since its IPO. Here, the most significant metrics will be Starlink’s performance, capital expenditure trends, and comments on business development plans. The results from these issuers could serve as a short-term driver for companies in the AI infrastructure and space sectors.

Before the start of the main trading session, Caterpillar (CAT), McDonald’s (MCD), Merck (MRK), Pfizer (PFE), Spotify (SPOT), and Marathon Petroleum (MPC) will report their quarterly results. After the market closes, AMD (AMD), SpaceX (SPCX), Astera Labs (ALAB), Arista Networks (ANET), Booking Holdings (BKNG), Gilead Sciences (GILD), and Amgen (AMGN) will report their earnings.

Futures on U.S. stock indices are showing moderately positive momentum. We assess the risk balance for the upcoming session as neutral, with moderate volatility. The market is being supported by strong corporate earnings and continued interest in the technology sector, which gives the S&P 500 the opportunity to test its all-time high. We consider the following to be risk factors: macroeconomic data deviating from expectations, changes in Treasury yields, and profit-taking following the previous day’s strong gains. After the market closes, volatility may increase following the release of earnings reports from the companies mentioned.

— Palantir Technologies (PLTR) shares are rising nearly 16% following the release of its earnings report. The company’s revenue for the most recent quarter rose 93% year-over-year to $1.94 billion, beating the consensus estimate of $1.81 billion. Adjusted earnings per share (EPS) came in at $0.41, compared to an average forecast of $0.34. Revenue from the U.S. commercial segment increased by 149% year-over-year to $764 million. The revenue guidance for the current year has been raised from $7.650–7.662 billion to $8.150–8.158 billion.

— Advanced Energy Industries (AEIS) shares are up nearly 11% as its quarterly revenue rose 30% year-over-year to $574 million, beating the consensus estimate of $542.8 million, while EPS came in at $2.74, compared to the market consensus of $2.2. Gross margin increased by 410 basis points to 41.1%. Guidance for the third quarter calls for revenue in the range of $620 million to $660 million.

·— Snap (SNAP) shares are rising by more than 4% following the release of its earnings report. The social network’s revenue increased by 19% year-over-year to $1.60 billion, compared with a consensus estimate of $1.54 billion. The number of daily active users rose 5% to 493 million, although the figure in North America fell 7% year-over-year.

— ON Semiconductor (ON) shares are up more than 7% as its second-quarter results beat expectations and management provided a confident outlook. The chipmaker’s revenue increased 9% year-over-year to $1.60 billion, compared with market consensus estimates of $1.59 billion. Adjusted EPS came in at $0.74, versus a consensus estimate of $0.71. In its third-quarter guidance, the company projects these figures to fall within the ranges of $1.65–1.75 billion and $0.81–0.93 (consensus: $0.83), respectively. The market also reacted positively to plans to more than double revenue from AI data center solutions by 2026.

— Powell Industries (POWL) shares are down more than 12%, despite a record order volume. The company’s revenue and EPS for the third fiscal quarter were $312 million (+9% YoY) and $1.42, compared to consensus estimates of $317 million and $1.47, respectively. At the same time, new orders reached a record $934 million (+158% YoY) with a book-to-bill ratio of 3.0x. The order backlog increased by 69% year-over-year to $2.4 billion. During the reporting period, the company secured three major contracts, including an order for a data center worth over $400 million.

— Sterling Infrastructure (STRL) shares are down about 1%, even though its quarterly revenue rose 90% year-over-year to $1.17 billion, beating the consensus estimate of $969 million, and adjusted EPS came in at $5.80 versus the expected $5.01. The order backlog increased by 116% year-over-year to $4.33 billion. The company raised its full-year revenue guidance to $4–4.15 billion.

Trading on August 3 on U.S. stock exchanges closed near intraday highs. The S&P 500 gained 1.48%, the NASDAQ 100 rose 1.78%, the Dow Jones rose 1.32%, and the Russell 2000 gained 1.73%. Among the stocks in the broad-market index, the number of gainers was more than double the number of losers. The session took place against the backdrop of a recovery in risk appetite. The largest technology companies mostly closed higher: five members of the “Magnificent Seven” gained more than 3%.

Telecom stocks (XLC: +2.86%), industrials (XLI: +1.85%), and consumer cyclicals (XLY: +1.83%) led the gains. Energy stocks (XLE: -1.28%) lagged behind amid a sharp correction in oil prices.

The market reacted cautiously to conflicting reports surrounding the conflict between the U.S. and Iran. White House Chief Donald Trump stated that the attacks were called off in favor of negotiations, while Tehran once again denies that dialogue has resumed. Given the alternating periods of escalation and de-escalation, market participants consider a return to large-scale military action unlikely.

Treasury yields fell by 2–3 basis points. WTI crude closed above its intraday lows, but fell 5.1% during the day, which helped ease pressure on interest rates and supported overall risk appetite.

Macroeconomic data has once again confirmed the economy’s stability. The ISM Manufacturing Purchasing Managers’ Index (PMI) for July rose from 53.3 points in June to 55.6—its highest level since May 2022—against a consensus estimate of 53.9. New orders and production volumes increased, and the employment situation improved. The final manufacturing PMI reading for July came in at 53.9 points, compared with a consensus estimate of 53.8. Construction spending in June fell by 0.1% month-over-month, against expectations of a 0.2% increase. New York Fed President John Williams noted that the current monetary policy is well-positioned to bring inflation back to the 2% annual target, however, the Fed may move to tighten monetary conditions if progress toward that target is not sufficiently robust.

— T1 Energy (TE: +18.5% at the close of trading on August 3) has signed a contract to supply solar modules with a total capacity of 641 MW to Clearway Energy Group. The modules will be manufactured using U.S.-made solar cells from T1’s G2 Austin factory, which will strengthen the company’s position in the domestic market.

— Sally Beauty Holdings (SBH: +7.8%) reported third-quarter earnings and an operating margin that exceeded average expectations, although revenue came in slightly below forecasts. Comparable sales for the Sally Beauty segment exceeded consensus estimates, but the Beauty Systems segment’s figure declined more sharply than the market had anticipated. Management noted improved customer engagement, growth in average ticket size in the fragrance category, and strong online sales momentum. At the same time, the average full-year guidance figures were revised downward.

— Ferguson Enterprises (FERG: +6.7%) will be added to the S&P 500 Index in place of Electronic Arts before the market opens on August 5.

— GameStop (GME: -12.3%) announced the exchange of $1.4 billion in convertible bonds for Class A shares with a number of existing holders. The transaction will allow the company to reduce its long-term debt without using cash. Pressure on the stock is due to an increase in the number of shares outstanding.

— Marriott International (MAR: -7.1%) reported second-quarter earnings that exceeded market expectations, while revenue fell short of forecasts. The company noted that the conflict in the Middle East was putting pressure on international revenue per available room, although Europe and Greater China maintained steady growth. Marriott lowered its third-quarter earnings guidance but raised its average full-year guidance for 2026.

This article was AI-translated and verified by a human editor