Markets Update - 7/30/26
A look at what happened today impacting US equity, Treasury, and selected commodity markets, and what to watch for tomorrow
Quick Summary:
As discussed in the morning update, US equity indices jumped at the open Thursday, following the largest decline for the S&P 500 in six weeks Wednesday as discussed in last night’s update.
Indices were led by a rebound in Tech after Microsoft’s stronger-than-expected results helped drive its best day since 2008, while semiconductors surged for their best session since April 2025, both pushing the Technology sector to its strongest day since April of last year as well.
With Tech in the driver’s seat, the Nasdaq Composite led the advance, gaining +2.8% and snapping a six-day losing streak, while the S&P 500 rose +1.6%, the Russell 2000 gained +1.4%, and the Dow Jones Industrial Average added +1.2%.
That said, the advance was clearly led by a bounceback in the AI-trade with Consumer Discretionary and Industrials shares also seeing strong gains. But four sectors were down more than 1%, led by Communication Services which was dragged lower by Meta Technologies which finished down nearly 8% after its disappointing forecast and raise to capex, underscoring the market’s continued focus on whether AI spending is translating into earnings and cash flow.
Q2 GDP increased a weaker-than-expected +1.5%, but the result was due to net trade and inventories with personal spending and business investment pointing to underlying resilience [Note: GDP report now updated with charts and Goldman analysis]. Weekly jobless claims remained low, reinforcing the view that the labor market is still not showing much stress.
Calmer Treasury yields after Wednesday’s post-Fed selloff also aided risk sentiment, while oil prices pulled back some after the prior day’s sharp jump as discussed in the subscriber section.
After the close, Apple shares fell sharply after earnings, down roughly 8%, while Amazon surged nearly +10% after results, leaving the market with another split read on megacap tech with a lighter day on tap for economic data and earnings Friday (more details in the subscriber section).
Some market commentary:
“The Fed remains patient [and in] a wait-and-see mode, and will continue to monitor how the economy evolves in the upcoming months,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. “This leaves the September meeting ‘live’ as an opportunity for the Fed to act if supported by the incoming data to appease rising inflation pressures.”
Money markets are fully pricing in a Fed rate hike only by December. Katharine Neiss, chief European economist at PGIM, warned officials may be left with little choice but to begin raising rates earlier. “That hawkish tilt is going to come in September, with three sequential hikes,” Neiss told Bloomberg TV. “Clearly there is a big risk here, because it’s got a whiff of discretionary monetary policy which we know doesn’t work. The markets could bully him into perhaps even a 50 basis-point hike.”
“The earnings season is broadly good for US tech, but there’s clearly a rotation ongoing from chips to hyperscalers,” said Claudia Panseri, chief investment officer at UBS Wealth Management in France. “Semiconductor stocks, even if they beat expectations, rarely manage to rise.”
“We’ve seen the hyperscalers that have been wanting to spend more, without backing up with profits, getting penalized,” said Rory McPherson at Magnus Financial Discretionary Management. “But then you have Microsoft, which isn’t spending any more than it forecast and is growing its cloud business. That’ll remain key, particularly for Amazon.”
“Investors want to hear that there’s some money left over in cash” after companies’ massive spending on artificial intelligence, said Ken Mahoney, president and chief executive officer of Mahoney Asset Management, in an interview. Investors were rewarding Microsoft’s “balanced approach,” he said.
“We remain constructive on the AI growth story, but believe investors should manage concentration risk by broadening their exposure to defensive tech stocks,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office.
The recent equity weakness appears more consistent with a reset in a market that had become overheated than a breakdown in the primary trend, according to Keith Lerner at Truist Advisory Services Inc. “The bull market remains intact,” he said.
“Despite near-term volatility, the outlook for US equities remains constructive, supported by strong corporate earnings, ongoing AI adoption, a resilient economy, and favorable financial conditions,” said Sameer Samana at Wells Fargo Investment Institute.
In today’s Markets Update:
A deeper look at Thursday’s stock and sector breakdown, including the Tech-led rebound, the return of the AI trade, semiconductor strength, and Microsoft’s surge.
A closer look at key company movers and corporate developments, including Apple and Amazon after the close, Microsoft, Lam Research, Meta Platforms, Qualcomm, Norwegian Cruise Line, Sandisk, Situational Awareness, Qualcomm, Arm, Mastercard, Yum! Brands, Starbucks, Chipotle, and Carvana.
Updated technical charts across the SPX, Nasdaq, Russell 2000, and equal-weighted SPX.
A review of market breadth and participation, including weak large individual winners and losers and Nasdaq 52-week highs versus lows, and Nasdaq speculative trading activity.
A look at the rates and Fed backdrop, including the continued twist in Treasury yields, Goldman on the Fed’s no-hike/no-guidance decision, Yardeni on Fed credibility and bond vigilantes, John Authers on the Treasury-market reaction, Ed Harrison on rate cuts and long-end yields, Goldman on inflation effects from tariffs, the war, and AI measurement, and JPMorgan’s Market Intelligence desk on rates and equities.
A look at volatility and market structure, including VIX, VVIX, and 1-day VIX.
A review of cross-asset trends, including WTI crude, the dollar, gold, copper, natural gas, and bitcoin.
HSBC’s Max Kettner on “Max bullish”, Vanda Research on retail investor flows, the tick-up in New York Fed’s Corporate Bond Market Distress Index, the Atlanta Fed GDPNow tracker, Goldman on Q2 GDP and consumer spending.
A wrap-up on the AI rebound, Tech concentration, breadth beneath the surface, the rates backdrop, volatility, and the near-term market setup.
A look ahead to Friday’s calendar, including US economic data, Fed speakers, SPX earnings, and ex-US highlights.
