U.S. stock indexes traded mixed on Tuesday, with the S&P 500 slightly higher, the Dow gaining ground, and the Nasdaq 100 edging lower. The day’s direction was shaped by a rebound-and-then-reversal in oil prices, which influenced Treasury yields, while investors weighed ongoing momentum from second-quarter earnings and an evolving Middle East risk premium around the Strait of Hormuz.
As crude prices eased after earlier strength, bond yields pulled back from their intraday highs, helping stabilize rate-sensitive assets. At the same time, chip and artificial intelligence infrastructure names provided support, while parts of the software sector weighed on sentiment.
Key takeaways
- Index moves: The S&P 500 was up about 0.04%, the Dow rose roughly 0.32%, and the Nasdaq 100 fell about 0.07%.
- Catalyst: Oil’s reversal after initial gains linked to geopolitical headlines helped pull down Treasury yields from highs set earlier in the session.
- Earnings backdrop: Second-quarter results and guidance expectations remained a supportive factor for broad market positioning.
- Implication for investors: Watch how oil-driven inflation expectations and rates translate into leadership between AI/semiconductor stocks and software laggards.
What drove the move
Early trading pressure in U.S. index futures was tied to strength in crude oil, which fanned inflation concerns and pushed bond yields higher. The dynamic shifted as oil prices later gave up most of their overnight advance, reducing the immediate inflation impulse to rates and helping yields retreat.
Geopolitics remained a major input to crude market pricing. The report said markets were reacting to developments involving the United States, Iran, and discussions referenced by regional and international media. Data in the article indicated that Pakistan signaled the U.S. and Iran were nearing an arrangement that could reopen the Strait of Hormuz, which contributed to crude’s pullback after earlier spikes.
Separately, the earnings calendar supported equities. According to Bloomberg Intelligence, the S&P 500 was tracking for nearly 32% earnings growth in the second quarter, above a projection of about 23%. The article also said AI spending is expected to drive a large share of that growth, with AI infrastructure names set to contribute a substantial portion of expected earnings-per-share improvement.
On actual results, Bloomberg data cited in the article indicated that, so far, 85% of the 446 S&P 500 companies that had reported second-quarter earnings had beaten estimates.
Market reaction: yields, oil, and sector leadership
Bond yields moved in tandem with crude. The article reported that the 10-year Treasury yield rose to a one-week high earlier in the session before falling back as crude prices slipped, with the yield later trading lower by a small number of basis points compared with the start of the day.
As a result, investors rotated into areas perceived to be beneficiaries of ongoing AI-related capex. Chip and AI-infrastructure stocks were among the strongest performers, with multiple names in semiconductors and related hardware moving higher in the session, according to the figures in the article.
In contrast, software stocks dragged on the broader tape. The article cited declines across several large-cap software names, suggesting that pressure in parts of the sector outweighed strength elsewhere.
What company news was doing
Individual stock moves reinforced the mixed index read-through. The article highlighted several standouts tied to earnings updates, guidance changes, and upgrades/downgrades.
- Forecast increases: Rapid7 shares rose after the company raised its full-year adjusted EPS forecast.
- AI infrastructure demand: Riot Platforms gained after entering a long-term cloud-related computing power arrangement with Anthropic, according to the details in the article.
- Healthcare results: Cardinal Health led S&P 500 gainers after reporting quarterly adjusted EPS above consensus and offering better-than-expected longer-term adjusted earnings guidance.
- Broker moves: Jabil and Best Buy climbed after analysts upgraded their ratings, while AppLovin fell after a downgrade to neutral from buy, per the report.
- Weaker outlooks: ON Holding dropped after reporting weaker-than-expected quarterly net sales, and Amentum declined after cutting its full-year revenue forecast.
- Guidance misses: Venture Global fell on quarterly adjusted EBITDA below consensus, and Rocket Lab declined following a wider-than-expected forecast for a future period.
Bigger picture: rates, central banks, and global markets
Rate expectations continued to frame equity positioning. The article said markets were pricing a meaningful probability of a 25 basis point rate hike at the next Federal Open Market Committee meeting on September 15–16. It also noted that futures pricing implied a high chance of a 25 basis point move by the European Central Bank at its September 10 meeting.
Outside the U.S., the article indicated overseas markets were also mixed, with some major European equities higher and select Asian markets lower, while Japan was closed for a local holiday. These moves suggested investors were balancing regional growth signals against the same macro driver—rates influenced by inflation expectations—at the center of global portfolio decisions.
For investors, the next catalyst is likely to come from how oil and geopolitical developments continue to filter into inflation expectations and Treasury yield direction, alongside the cadence of company earnings into mid-August/September.
What to watch next: Upcoming scheduled earnings listed in the article include Aramark, Cava Group, CoreWeave, H&R Block, Lumentum Holdings, Middleby, On Holding, Smithfield Foods, and Super Micro Computer. Investors will also be watching the next batch of macro data and central bank commentary that could shift the market’s pricing for the Fed and ECB.
