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August 5, 2026 - 14:28
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(Bloomberg) — US stocks extended a four-day rally as the latest batch of corporate earnings pointed to a strong economic backdrop and continued demand for artificial intelligence build-out, while hopes rose for a US-Iran deal that would re-open the Strait of Hormuz.S&P 500 futures gained 0.5%, while contracts on the Nasdaq 100 also edged higher. Nvidia Corp. advanced in premarket trading after key partner reported a sharp increase in monthly sales, signaling sustained demand for global AI infrastructure. Arista Networks Inc. jumped as much as 14% after the cloud-networking company forecast better-than-expected revenue for the third quarter.There were signs of caution, with SpaceX falling more than 11% in premarket trading after the company projected higher-than-expected spending on its AI business. Advanced Micro Devices Inc. dropped about 9% after an underwhelming sales outlook.Still, the recent correction in tech stocks has brought valuations to more reasonable levels, helping to restore investor confidence after a bout of volatility triggered losses at several hedge funds last month. The MSCI World Semiconductor Index had tumbled more than 20% from its peak in June, driven by worries around the sustainability of AI spending boom and progress in China’s advanced chipmaking. The gauge has rebounded 15% since then.“Albeit there was some disappointment on the micro level, the numbers are still confirming that the overarching macro trend is intact as they confirm the durability of the compute build-out,” said Stephan Kemper, chief investment officer at BNP Paribas Wealth Management Germany. “Thus, tech as a whole can benefit even if single players suffer.”In other earnings news:The Walt Disney Co. rose 3% after profit beat Wall Street estimates in the company’s fiscal third quarter, driven by soaring income from its entertainment division and the resilience of its theme parks in California and Florida. CVS Health Corp. climbed 2.5% after raising its profit guidance for the year as second-quarter earnings topped Wall Street estimates, driven by better-than-expected medical costs in the company’s Aetna insurance business. Eli Lilly & Co. rose more than 5% after boosting its full-year revenue forecast. Shopify Inc. soared more than 30% after second-quarter revenue topped analysts’ estimates. Uber Technologies Inc. dropped after falling short of analysts’ estimates for second-quarter revenue. Brent crude, meanwhile, reversed some of Tuesday’s 5.3% plunge after Yemen’s Houthi militant group threatened to escalate attacks on Saudi vessels in the northern Red Sea. Still, the commodity held around $80 a barrel after Axios reported that Washington, Tehran and Oman were nearing an agreement to resume oil flows through the Strait of Hormuz. That’s easing inflation fears and upward pressure on Treasury yields.“As oil prices come back to the $75-$80 dollar range, markets can focus on fundamentals, which remain robust,” said Mohit Kumar, a strategist at Jefferies International. “Earnings have been solid and there is still a lot of liquidity out there. Positioning is very clean, which sets a nice backdrop for a further rally in risky assets.”What Bloomberg Strategists Say…“Equities do not need oil to fall more to continue rallying. The more important support for equities comes from fundamentals. Second-quarter earnings were strong. That’s despite elevated commodity prices and yields, raising the bar for an equity selloff from any Middle East escalation. At the same time, July’s positioning washout has left investors with scope to rebuild exposure.”The three pressures behind the recent stock selloff — AI spending concerns, higher bond yields and the increase in oil prices — are all easing at the same time, said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. Strong earnings are reassuring investors that AI demand remains intact, while lower oil and bond yields are taking pressure off valuations, she said.Europe’s Stoxx 600 benchmark erased an early gain, with Novo Nordisk A/S falling 4% after sales of its popular Wegovy weight-loss pill disappointed investors.Among other individual European stocks, Siemens Energy AG climbed after demand for gas turbines and grid equipment boosted profit margins. Glencore Plc gained 4% after reporting a jump in profit. Sandoz Group AG surged 7% after meeting sales estimates for the second quarter.German chipmaker Infineon Technologies AG, however, fell more than 5% after reporting margin pressures despite meeting analysts’ expectations for revenue in the fourth quarter.“What’s new in the AI trade is that there’s a lot of dispersion within semiconductors or hyperscalers,” said Roland Kaloyan, head of European equity strategy at Societe Generale. “That means clients such as equity portfolio managers who can’t invest in indexes have challenging stock picking choices to make.”The dollar, the haven of choice during the Middle East conflict, weakened against most of its Group-of-10 peers. A Bloomberg gauge of the currency’s strength fell 0.2%, a third day of losses, extending the decline after ADP Research data showed US companies added fewer jobs that expected in July. Treasuries were steady.Gold, silver and platinum all rose as the non interest-bearing precious metals benefit when interest rates are not increased. Bullion climbed 2.3% to about $4,170 an ounce.Corporate Highlights:Alphabet Inc.’s Google must face a class action lawsuit over alleged abuse of its dominance after an antitrust tribunal allowed a claim on behalf of hundreds of thousands of British firms to go ahead. SpaceX fleshed out its plans to compete directly with the largest mobile phone carriers in the US by complementing its satellite-based internet service with land-based infrastructure. Heineken NV’s volumes grew more than expected in the second quarter as strong demand in Asia and Africa offset persistent weakness in Europe and the Americas. Siemens Energy AG said strong demand for gas turbines and grid equipment should push the profit margin in the current fiscal year to the upper end of its guidance corridor. Chanel’s sales rose by double digits in the first half, beating luxury rivals including LVMH, as wealthy shoppers splurged on the new fashion creations of designer Matthieu Blazy. Fast-fashion retailer Shein Global Holdings Ltd. is planning to start gauging investor demand for its Hong Kong initial public offering as soon as this week, according to people familiar with the matter. Some of the main moves in markets:StocksS&P 500 futures rose 0.5% as of 8:25 a.m. New York time Nasdaq 100 futures rose 0.2% Futures on the Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.2% The MSCI World Index rose 0.2% CurrenciesThe Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1556 The British pound rose 0.2% to $1.3482 The Japanese yen rose 0.2% to 157.45 per dollar CryptocurrenciesBitcoin rose 0.2% to $64,425.45 Ether rose 0.2% to $1,878.98 BondsThe yield on 10-year Treasuries was little changed at 4.61% Germany’s 10-year yield was little changed at 3.11% Britain’s 10-year yield was little changed at 4.89% CommoditiesWest Texas Intermediate crude rose 0.4% to $76.04 a barrel Spot gold rose 3.3% to $4,210.68 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Michael Msika, Julien Ponthus, Levin Stamm and Anand Krishnamoorthy.©2026 Bloomberg L.P.
