Stocks bolted ahead last week as investors cheered the last big week of Q2 corporate reports and a Friday jobs update that put the spotlight on the Fed's next move with short-term rates. The Standard & Poor's 500 Index advanced 3.57%, while the Nasdaq Composite Index gained 5.19%. The Index's technology heavyweights jumped and optimism increased that the Strait of Hormuz will reopen following a deal between Iran and Oman. The S&P 500 market benchmark ended the week at 7,757.64. The S&P index is now up 3.4% quarter to date and 13% this year. The Dow Jones Industrial Average rose 2.96%. The MSCI EAFE Index, which tracks developed overseas stock markets, added 2.32%.1,2 Best Week in Nearly 4 MonthsStocks opened the week strong as oil prices slid on news of diplomatic efforts in the Middle East. Big Tech led, which helped push the Dow Industrials to a record close.3 Investor optimism continued to build on Tuesday as stocks opened higher and climbed throughout the day. Strong Q2 corporate reports added fuel to the rally, lifting all three averages into a second day of robust gains.4 Markets opened higher on Wednesday but lost momentum as the day progressed. On Thursday, oil prices crept higher, and stocks went sideways as investors awaited updates on the Middle East and digested the final big trove of Q2 corporate results.5,6 Then, on Friday, an unexpected contraction in the labor market boosted stocks as investors hoped the jobs data might influence the Fed's outlook for short-term rates. Each major average logged its best weekly gain since mid-April.7 Drivers of this Bull MarketPalantir Technologies (PLTR) jumped 40% this week after Q2 sales and adjusted earnings surpassed estimates and the company boosted its full-year 2026 sales outlook. Nvidia (NVDA) jumped 12% this week. Zebra Technologies (ZBRA) reported fiscal Q2 non-GAAP earnings and sales above market expectations, and also lifted its full-year 2026 outlook. Shares jumped 28% this week. An Iranian official said a framework on the Strait of Hormuz has been agreed with Oman, with "a final decision to be made at higher levels," Al Jazeera reported, citing Iranian state media. The information technology sector had the largest percentage gain of the week, up 7.2%, followed by a 5.6% advance in materials and a 3% rise in industrials. Albemarle (ALB) reported Q2 adjusted earnings and sales growth that beat consensus, and raised revenue guidance for the specialties segment to $1.4 billion to $1.6 billion for the full year. Shares advanced 11% this week. The three S&P 500 sectors that declined the most last week were energy, utilities, and real estate, down 3.3%, 1.7% and 0.1%, respectively. NRG Energy (NRG) reported a steeper-than-expected slide in Q2 adjusted earnings. The shares fell 12% in the week.11 Analyzing Q2 EarningsThe headline with the media is S&P 500 earnings growth for Q2 is about 50%. Analyst consensus going into the quarter was for about 23%. The headline number is heavily distorted by extraordinary investment-related gains at Alphabet (GOOG, GOOGL) and Amazon (AMZN). Alphabet reported about a $98 billion investment-related gain. Amazon reported about $53 billion of other income, primarily related to investments including Anthropic. These are not recurring operating earnings. After taking ou the Alphabet and Amazon distortion, earnings growth falls to roughly 31% - 32%. This is still very strong, but nowhere near the 50% headline. This is still a semiconductor supercyle. The open question is how long it will last. Semiconductor and semiconductor-equipment earnings are growing at about 135%. If you strip out both the Alphabet and Amazon distortion AND the semiconductor surge from headline earnings growth, the underlying S&P 500 earnings growth is roughly 22%-23%. This is still excellent, but less than half the headline number. CPI will be released on Wednesday which we'll watch closely as it has the ability to move markets. A Trump deal with Iran will be watched closely, especially, with that situation's impact on the current and future price of oil.12 S&P 500 Reporting Highest Revenue Growth Since Q4 2021At this late stage of the earnings season, the (blended) revenue growth rate for the S&P 500 for Q2 is 15.0%. If 15.0% is the actual growth rate for the quarter, it will mark the highest revenue growth rate reported by the index since Q4 2021 (16.1%). However, the Q2 revenue growth rate for the S&P 500 has been increasing over a longer period. On March 31, the estimated revenue growth rate for Q2 was 9.5%. On June 30, the estimated revenue growth rate for Q2 was 12.2%. Today, the (blended) revenue growth rate is 15.0%. All eleven sectors are reporting (or have reported) year-over-year revenue growth. Five of these eleven sectors are reporting (or have reported) double-digit revenue growth led by the Energy, Information Technology, and Communication Services sectors. The Energy sector reported the highest (year-over-year) revenue growth rate of all eleven sectors at 42.5%. Higher (average) year-over-year oil prices contributed to the year-over-year increase in revenues for this sector, as the average price of oil in Q2 2026 ($92.55) was 45% above the average price for oil in Q2 2025 ($63.68). At the sub-industry level, all 5 sub-industries in the sector reported year-over-year growth in revenues: Oil & Gas Refining & Marketing (53%), Integrated Oil & Gas (46%), Oil & Gas Exploration & Production (32%), Oil & Gas Storage & Transportation (28%), and Oil & Gas Equipment & Services (2%). The Information Technology sector is reporting the second-highest (year-over-year) revenue growth rate of all eleven sectors at 35.9%. At the industry level, all 6 industries in the sector are reporting year-over-year revenue growth: Semiconductors & Semiconductor Equipment (77%), Technology Hardware, Storage, & Peripherals (31%), Electronic Equipment, Instruments, & Components (21%), Communication Equipment (20%), Software (18%), and IT Services (4%). The Communication Services sector is reporting the third-highest (year-over-year) revenue growth rate of all eleven sectors at 15.3%. At the industry level, all 5 industries in the sector are reporting year-over-year revenue growth: Interactive Media & Services (25%), Media (11%), Wireless Telecommunication Services (8%), Entertainment (5%), and Diversified Telecommunication Services (less than 1%). The Information Technology and Energy sectors are also the largest contributors to revenue growth for the S&P 500 for Q2. If these two sectors were excluded, the blended revenue growth rate for the S&P 500 for Q2 would fall to 9.7% from 15.0%. Looking ahead, analysts expect lower revenue growth for the S&P 500 for the 2nd half of 2026. For Q3 2026 and Q4 2026, the estimated revenue growth rates for the index are 11.3%, and 10.9%, respectively. For CY 2007, the estimated revenue growth rate is 8.4%.13 |
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Source: YCharts.com, August 8, 2026. Weekly performance is measured from Monday, August 3 to Friday, August 7. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points. |
Labor Market UpdateThe economy unexpectedly shed 23,000 jobs in July, based on the Labor Department's report released Friday. Economists expected 83,000 jobs to be created. July's decline was the first monthly contraction in the labor market since February.8 Additionally, the number of jobs added in May and June was revised down by 103,000, reinforcing evidence of a cooling job market. Meanwhile, unemployment edged down to 4.1 percent as fewer people looked for work.8 This Week: Key Economic DataTuesday: NFIB Small Business Optimism Index. Existing Home Sales. New York Fed Q2 Household Debt & Credit Report. Wednesday: Consumer Price Index (CPI). Monthly Treasury Balance. Thursday: Fed Speeches: Beth Hammack (Cleveland) and Thomas Barkin (Richmond). Weekly Jobless Claims. Producer Price Index (PPI). Friday: Retail Sales. Manufacturing & Trade: Inventories. University of Michigan Consumer Survey. Source: Investors Business Daily - Econoday economic calendar; August 7, 2026. The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to provide accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts are also subject to revision. This Week: Companies Reporting EarningsMonday: Simon Property Group, Inc. (SPG) Tuesday: Lumentum Holdings Inc. (LITE) Wednesday: Cisco Systems, Inc. (CSCO) Thursday: Applied Materials, Inc. (AMAT), Brookfield Corporation (BN) Source: Zacks, August 7, 2026. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule their earnings reports without notice. |
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"Optimism is the faith that leads to achievement." – Helen Keller |
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Egypt: Ancient Wonders, Newly RediscoveredEgypt is having a moment, and for good reason. With the opening of the Grand Egyptian Museum, which adds a stunning new chapter to Cairo's cultural landscape, now is a wonderful time to explore this ancient destination. Plan your visit carefully: a knowledgeable local guide and pre-arranged priority access to major sites will make all the difference. After exploring the pyramids and museums, consider adding a few days on a Nile River cruise from Luxor, where breathtaking scenery drifts past your window at a wonderfully unhurried pace. Tip adapted from TravelandLeisure.com9 Low-Impact Exercises for Healthy JointsHere are some of our favorite low-impact exercises:
Tip adapted from Healthline10 |
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Buried in wood from one end to the other, my head is exposed while I keep things together. What am I? Last Week's Riddle: What has hundreds or even thousands of ears but hears absolutely nothing? Answer: A cornfield. |
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Basilica di San Marco |
Footnotes And Sources1. WSJ.com, August 7, 2026 11. MT Newswires, YCharts.com, August 3-7, 2026 12. The Arora Report, Nigam Arora, August 8, 2026 13. Factset.com, John Butters, August 7, 2026 |
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