U.S. equity benchmarks finished mixed on Tuesday as investors weighed a softer macro backdrop against a wave of earnings. The Dow Jones Industrial Average rose to a 1.5-week high, the S&P 500 added modestly, while the Nasdaq 100 slid to a 2.75-month low amid renewed selling pressure in chip and artificial-intelligence infrastructure stocks.
Key takeaways
- Index moves: The S&P 500 closed up 0.21%, the Dow climbed 1.03%, and the Nasdaq 100 fell 0.98%.
- Catalyst: Better-than-expected results from Boeing, Coca-Cola and Sherwin-Williams supported broad buying, while concerns about AI spending weighed on semiconductors.
- Rates and oil: Crude prices dropped sharply, helping push bond yields lower and easing near-term inflation pressure.
- Macro data: Consumer confidence unexpectedly declined, adding caution to sentiment.
- Next test for markets: Investors are watching a cluster of megacap technology earnings this week for signals on AI demand and spending.
What drove the move
Stocks found support from company-specific results. According to the report, Boeing, Coca-Cola and Sherwin-Williams all posted better-than-expected earnings, helping lift parts of the market. The same source said software shares gained as investors rotated toward a sector that had recently lagged.
At the same time, the Nasdaq 100 faced a heavier drag from semiconductors and AI infrastructure. The report pointed to fresh concerns over artificial intelligence spending, alongside rising competition from China, as chipmakers and related hardware names retreated.
Macro and energy developments also shaped the day’s trading. The Conference Board’s U.S. consumer confidence index fell unexpectedly, while a housing-related measure from the S&P composite-20 index rose year-over-year. Meanwhile, crude oil prices declined by more than 4% to a 1-week low as the U.S. and Iran extended a pause in hostilities, with attention turning to talks between Iran and Oman over reopening the Strait of Hormuz. The report also cited that the drop in oil helped ease inflation expectations, contributing to lower Treasury yields.
Market reaction and sector leadership
Broad benchmarks moved in different directions. The Dow’s strength reflected a relatively steadier tape outside the most rate- and growth-sensitive corners of the market, while the Nasdaq 100 underperformed as semiconductors sold off.
In software, Workday led the Nasdaq 100 higher, with the report saying the stock closed up more than 8%. Other software-related names mentioned by the report—Thomson Reuters and Autodesk, along with Adobe, ServiceNow, Salesforce and Atlassian—also posted gains. On the semiconductor side, the report said the iShares Semiconductor ETF fell to a 2.5-month low and closed down more than 4%, with individual decliners including Sandisk, Advanced Micro Devices, Micron Technology, and several equipment and memory names.
The report also tied part of the risk-off tone in certain equities to crypto-related moves. According to the report, cryptocurrency-exposed stocks fell after Bitcoin dropped more than 1% to a 1-week low.
How earnings and macro data intersected
Despite the mixed tape, the day’s stock selection leaned heavily on earnings. The report highlighted several specific moves: IQVIA shares rose more than 13% after the company lifted its full-year revenue forecast; Sherwin-Williams gained more than 8% on adjusted earnings and an increased full-year adjusted EPS outlook; Nucor climbed more than 7% after reporting quarterly net sales above consensus; and Coca-Cola advanced after raising its full-year comparable EPS guidance range. Boeing was also among the gainers after reporting quarterly revenue that beat consensus.
Meanwhile, stocks that issued weaker guidance or results traded lower. The report cited Amkor Technology falling more than 24% after forecasting third-quarter net sales below consensus, along with declines at Corning, Noble Corp., Carrier Global and others after earnings or margin outlook disappointed. It also referenced an RXO downgrade by TD Cowen, which weighed on the stock.
On the macro side, the unexpected decline in U.S. consumer confidence was a headwind for sentiment. According to the report, the July confidence reading fell to 90.8 versus expectations for an increase. The Richmond Fed manufacturing survey rose but less than expected, adding to a picture of uneven momentum.
Lower oil prices and a decline in yields helped offset some of that caution. The report said the 10-year Treasury yield fell about 5 basis points to 4.600%, and crude’s sharp drop reduced inflation concerns.
Bigger picture: what investors are watching next
With markets already looking ahead, Tuesday’s action set up a busy week for earnings and policy expectations. The report said investors are watching results from megacap technology companies including Microsoft and Meta Platforms on Wednesday, followed by Amazon and Apple on Thursday.
According to Bloomberg Intelligence, the report stated Q2 earnings for the broader market are expected to increase by 23%, with AI spending projected to contribute materially to growth. The source also said that, so far, 86% of the 170 S&P 500 companies that had reported beat estimates, citing Bloomberg data.
On rates, the report said markets are pricing a 30% chance of a 25-basis-point rate hike at the next Federal Open Market Committee meeting. Investors will likely continue to focus on whether incoming earnings—especially from companies tied to AI infrastructure—can counterbalance concerns about spending intensity.
Next up for traders: the scheduled megacap tech reports, continued interpretation of AI demand, and additional macro releases that could further clarify the path for inflation expectations and interest-rate pricing.
