U.S. stock indexes traded mixed on the day as the S&P 500 and the Dow Jones Industrials pushed to new all-time highs, while the Nasdaq 100 slipped slightly. The moves came as investors weighed early earnings momentum against a softer read on parts of the economic data and chip-sector pressure after a forecast from Advanced Micro Devices.
Key takeaways
- S&P 500 rose and Dow gained to fresh records, while Nasdaq 100 edged lower amid weakness in semiconductors.
- Catalyst: Earnings beats from several companies supported broad gains, but AMD’s third-quarter sales outlook disappointed expectations and weighed on chipmakers.
- Rates and macro: Updates on employment and services activity were weaker than expected, while Kansas City Fed President Jeff Schmid’s remarks pushed investors to refocus on the inflation outlook.
- Earnings outlook: Data compiled by Bloomberg Intelligence pointed to a strong quarter ahead, with AI-related spending expected to drive a large share of earnings growth.
- Energy and geopolitics: Oil prices fell after reports suggested progress toward an interim agreement involving the U.S., Iran and Oman over the Strait of Hormuz.
What drove the move
Corporate earnings provided the primary support for the broader market. Booking Holdings rose after reporting better-than-expected Q2 gross bookings, and Amgen advanced after posting stronger-than-expected Q2 earnings per share.
However, the Nasdaq 100 lagged as semiconductor sentiment deteriorated. Advanced Micro Devices declined sharply after its third-quarter sales forecast came in below what investors expected, dragging chip-related peers lower. In addition, SpaceX fell after projecting higher-than-expected spending on its artificial intelligence business, even as it reported better-than-expected Q2 earnings.
Market reaction to economic and policy signals
On the macro front, U.S. economic data landed slightly soft relative to expectations, creating a modest drag on stocks. According to the report cited in the article, July ADP employment change rose by 44,000, below expectations of 65,000. The ISM services index was reported up 0.1 to 54.1, short of expectations of 54.5. A notable detail was the services price paid sub-index, which reportedly rose to 70.3 from expectations of a decline, signaling persistent price pressure in services.
Housing data also reflected cooling. The article said weekly MBA mortgage applications fell, and the average 30-year fixed-rate mortgage increased to a one-year high.
Investors also focused on policy commentary. The article reported remarks from Kansas City Fed President Jeff Schmid, who said the current stance of monetary policy is not restrictive and that bringing inflation down to the Fed’s 2% goal would require tighter policy. That backdrop weighed on interest-rate-sensitive assets, even as weaker-than-expected portions of the data kept investors from fully shifting toward a more aggressive rate path.
Earnings momentum and specific movers
Beyond the broad index gains, several company results stood out. In the Nasdaq 100, Shopify climbed after reporting Q2 revenue above consensus. Charles River Laboratories rose after Q2 revenue exceeded expectations, and Wynn Resorts advanced following an earnings beat. Compass gained on revenue strength and a higher Q3 revenue outlook.
Other notable winners included Booking Holdings, Arista Networks and Kratos, with the latter also raising its full-year revenue forecast. On the downside, Insulet fell after cutting its constant-currency full-year revenue estimate, while DaVita declined after revenue per treatment missed consensus and guidance trailed expectations.
In semiconductors, losses were led by AMD, with the article also pointing to weakness across multiple chip-related names following the forecast disappointment.
Oil, rates, and the broader outlook
Energy markets moved alongside shifting geopolitical expectations. The article said WTI crude futures fell to a three-week low after Axios reported that the U.S., Iran and Oman were nearing an interim agreement to reopen the Strait of Hormuz. It also noted that crude prices briefly rose after a Houthi spokesperson said the group would escalate attacks on Saudi oil tankers in the northern Red Sea, and that President Trump threatened renewed air strikes while emphasizing a “last chance” offer of talks. The piece added that diplomacy involving Oman and Iran remained central to restarting more shipping through the strait.
In fixed income, the article reported that September 10-year Treasury notes were lower and that the 10-year yield rose modestly as stock strength reduced safe-haven demand. It also cited the same hawkish remarks from Kansas City Fed President Schmid as a factor influencing yields, alongside the unexpected increase in the services price paid index.
For the earnings backdrop, Bloomberg Intelligence projections cited in the article suggested Q2 earnings could rise by 23%, approaching the prior quarter’s strong pace. The report also said AI spending was expected to account for much of the earnings strength, with AI infrastructure stocks projected to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2. Bloomberg data referenced in the article indicated that 86% of the S&P 500 companies that had reported Q2 results beat estimates.
Looking ahead, investors are likely to stay focused on further earnings releases, updates to inflation-sensitive indicators, and upcoming central-bank communication. The article also noted markets were pricing a 25 basis-point decision at the next FOMC meeting on September 15-16, underscoring how closely rate expectations could track incoming data.
