Daily Market Review | Wednesday, August 5, 2026

Wall Street returned to record highs as strong corporate earnings, falling oil prices and lower Treasury yields created an almost ideal backdrop for risk assets. However, the negative reactions to AMD and SpaceX show that strong growth is no longer enough in AI-related stocks — companies must now exceed exceptionally high expectations.

Wall Street ended Tuesday’s session with powerful gains and fresh records. The Dow Jones Industrial Average climbed 1.71% to 54,085, the S&P 500 gained 1.79% to 7,736, and the Nasdaq Composite led with a 2.59% advance. The Philadelphia Semiconductor Index surged 6.6% following a particularly weak July, while the S&P 500 technology sector gained 4.1%. Market breadth also improved significantly, with advancing stocks outnumbering decliners by almost three to one.

Corporate earnings provided an important catalyst. Palantir jumped 29.5% after raising its annual revenue forecast, while Caterpillar gained 5.6% after delivering stronger results and increasing its outlook, supported partly by demand for power-generation and infrastructure equipment used in data centers. Roughly 85% of the S&P 500 companies that have reported so far have exceeded analysts’ expectations, an unusually strong figure that provides some fundamental support for the rally.

Oil was the second major driver. Hopes for progress toward ending the Iran conflict and restoring more traffic through the Strait of Hormuz pushed Brent crude toward $78 per barrel and U.S. crude to around $74.50. Lower energy prices reduce inflation concerns, ease pressure on the Federal Reserve to tighten monetary policy and support both bonds and equities. The 10-year U.S. Treasury yield declined to around 4.60%, while the probability of a September Fed rate increase fell to roughly 57%.

The picture became more complicated after the closing bell. AMD reported a 50% increase in quarterly revenue to $11.54 billion, while data-center revenue more than doubled to $6.72 billion. Its third-quarter revenue outlook also exceeded analysts’ expectations, yet the shares fell almost 9% in extended trading. Investors had apparently expected an even stronger forecast and clearer margin expansion after the stock had already more than doubled this year.

SpaceX also delivered impressive growth but was punished after hours. Revenue nearly doubled to $7.8 billion, Starlink revenue rose 66%, and its subscriber base doubled to 12 million. However, total capital expenditure ballooned to more than $18 billion, including approximately $15.8 billion invested in AI infrastructure. The stock fell around 7.5%, with investors also preparing for Thursday’s lockup expiration, when as many as 912 million employee and pre-IPO investor shares may become eligible for sale.

The positive momentum carried into Asian markets. Japan’s Nikkei is up around 3%, South Korea’s Kospi has surged 4.1%, the broader Asia-Pacific index is up 2.4%, and Chinese blue chips have gained approximately 0.7%. S&P 500 futures are up about 0.3%, while Nasdaq futures are close to flat because of the post-earnings declines in AMD and SpaceX. Gold is trading near $4,130 per ounce as lower yields support the metal, while Bitcoin is holding near $64,000.

In Tel Aviv, the TA-35 gained 0.81% on Tuesday, led by banking and technology shares. Enlight Renewable Energy rose 7.05%, Camtek gained 5.81%, and Nova advanced 3.68%. The shekel strengthened by approximately 1% against the dollar to around 3.01 shekels per dollar. However, declining stocks still outnumbered advancing stocks, indicating that the index’s gain was concentrated in a relatively small group of large companies.

Today’s attention will shift toward U.S. economic data. The ADP private-sector employment report will be released at 8:15 a.m. Eastern Time, with expectations for approximately 75,000 new jobs. The final S&P Global Services PMI follows at 9:45 a.m., while the ISM Services PMI will be released at 10:00 a.m. Investors will pay particular attention to the employment and prices-paid components ahead of Friday’s official U.S. payroll report. Disney and Uber are among the major companies scheduled to report earnings.

The short-term trend remains positive, but record levels and sharp recent gains make the market increasingly sensitive to disappointment. Oil prices and the 10-year Treasury yield remain the two most important variables. Further declines could allow the rally to broaden, while a renewed rise in energy prices or inflationary services data could quickly revive concerns about tighter monetary policy. The reactions to AMD and SpaceX offer an important reminder: even an outstanding company can fall when its valuation already assumes near-perfect execution.