U.S. equities powered to fresh record highs by midday Tuesday as blowout guidance from Palantir Technologies Inc. (NASDAQ:PLTR) and a Caterpillar Inc. (NYSE:CAT) earnings beat reignited the AI trade, while crude oil tumbled more than 5% on growing conviction that a deal to reopen the Strait of Hormuz is days away.
Treasury Secretary Scott Bessent told CNBC that “we may have an Iran deal tomorrow to open Hormuz.”
• Palantir Technologies stock is among today’s top performers. Why are PLTR shares rallying?
The S&P 500 rose 1.4% to 7,707.81, a record, while the Dow Jones Industrial Average advanced 870 points, or 1.6%, to 54,048.41, also an all-time high.
The Nasdaq 100 outpaced the tape with a 2.5% jump to 29,502.39. The Russell 2000 climbed 1.5% to 3,027.36.
West Texas Intermediate crude sank 5.3% to $76.06 a barrel, while Brent slid 5.2% to $79.42.
Rate traders trimmed hawkish bets accordingly. The implied probability of a 25-basis-point Federal Reserve rate hike in September dropped to roughly 57% from about 65% a session earlier, with softer domestic data reinforcing the move: June job openings fell to 7.36 million against a 7.45 million forecast, factory orders unexpectedly declined 0.3% for a second straight month, and the trade deficit narrowed to $73.3 billion.
The retreat in energy costs rippled straight into rates. The 10-year Treasury yield eased five basis points to 4.63%, pulling back from Monday’s 18-month high of 4.75%. The 2-year fell five basis points to 4.20% and the 30-year slipped four basis points to 5.19%.
Tuesday’s Performance In Major U.S. Indices
| Index | Last | % Change |
|---|---|---|
| S&P 500 | 7,707.81 | +1.4% |
| Dow Jones | 54,048.41 | +1.6% |
| Nasdaq 100 | 29,502.39 | +2.5% |
| Russell 2000 | 3,027.36 | +1.5% |
According to the Benzinga Pro platform:
- The iShares Russell 2000 ETF (NYSE:IWM) advanced 1.5%.
- The Vanguard S&P 500 ETF (NYSE:VOO) gained 1.4%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 1.6%.
- The Invesco QQQ Trust (NASDAQ:QQQ) climbed 2.7%.
Chips Rip While The AI Power Trade Cracks
The Technology Select Sector SPDR Fund (NYSE:XLK) was the runaway leader, up 4.4%, with the Materials Select Sector SPDR Fund (NYSE:XLB) adding 1.4% and the Industrials Select Sector SPDR Fund (NYSE:XLI) rising 1.2%. The Financial Select Sector SPDR Fund (NYSE:XLF) gained 0.9%.
At the other end, the Utilities Select Sector SPDR Fund (NYSE:XLU) and the Energy Select Sector SPDR Fund (NYSE:XLE) each fell 0.9%, the only two sectors down for the session.
At the industry level, the VanEck Semiconductor ETF (NASDAQ:SMH) surged 4.9% and the SPDR S&P Metals & Mining ETF (NYSE:XME) rose 4%, while the iShares Expanded Tech-Software Sector ETF (BATS:IGV) climbed 3.9%. The clear loser was the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP), down 1.7%.
The semiconductor complex was carried by an optical and memory melt-up. Micron Technology Inc. (NASDAQ:MU) jumped 7.8%, Broadcom Inc. (NASDAQ:AVGO) rose 6.2%, Intel Corp. (NASDAQ:INTC) added 9.6% and Marvell Technology Inc. (NASDAQ:MRVL) gained 12.2%.
Leading the Russell 1000, Wayfair Inc. (NYSE:W) exploded 30.4% higher after second-quarter revenue of $3.52 billion beat the $3.47 billion consensus, adjusted EPS of 95 cents topped the 89-cent estimate. U.S. revenue grew 8.7% and the company had its strongest domestic growth since 2020. Free cash flow of $301 million was also the best since the COVID-19 pandemic era.
Palantir soared 27.4% after Monday’s post-close print showed revenue up 93% to $1.94 billion and U.S. commercial revenue up 149%, alongside the company’s largest-ever guidance raise, lifting full-year revenue guidance by roughly $498 million to about $8.15 billion.
Zebra Technologies Corp. (NASDAQ:ZBRA) rallied 22% on a strong beat: revenue of $1.56 billion versus $1.50 billion expected, adjusted EPS of $6.35, some 45% above consensus, and third-quarter revenue guidance of $1.56 billion at the midpoint, 4.1% ahead of the Street.
Applied Optoelectronics Inc. (NASDAQ:AAOI) extended Monday’s move with a 20.1% gain. The company will report on Thursday.
Gartner Inc. (NYSE:IT) rounded out the top five with a 16.7% jump after adjusted EPS of $4.37 came in 17.1% above consensus on flat revenue of $1.68 billion. Contract value rose 1.7% to $5.3 billion, and management raised full-year adjusted EBITDA, EPS and free cash flow guidance.
Elsewhere in the earnings tape, W.W. Grainger Inc. (NYSE:GWW) fell 5.8% even after posting EPS of $12.01 against $11.23 expected, Cummins Inc. (NYSE:CMI) lost 3.5% on EPS of $6.73 versus $7.26 expected, and TransDigm Group Inc. (NYSE:TDG) slipped 4% despite EPS of $10.87 topping estimates. Energy producers followed crude lower, with Diamondback Energy Inc. (NASDAQ:FANG) down 3.8%.
On the downside, Bruker Corp. (NASDAQ:BRKR) plunged 18.1% in a classic mixed print. Adjusted EPS of 49 cents beat by 27.5%, but revenue of $838.5 million missed and full-year revenue guidance was trimmed to $3.56 billion at the midpoint from $3.59 billion.
Aptiv PLC (NYSE:APTV) sank 17.8% despite beating on the quarter with adjusted EPS of $1.63 against $1.42 expected. The damage came from guidance: third-quarter EPS of $1.25 to $1.35 landed far below the $1.60 consensus, with revenue guidance of $3.12 billion to $3.22 billion also short of the $3.3 billion estimate.
NRG Energy Inc. (NYSE:NRG) tumbled 16.4% after adjusted earnings of $1.49 per share fell short of the $1.69 consensus and declined from $1.73 a year earlier, even as GAAP net income hit $506 million and full-year guidance was reaffirmed.
The read-across hit the rest of the AI-power complex: Vistra Corp. (NYSE:VST) fell 7.3% and Constellation Energy Corp. (NASDAQ:CEG) lost 3.0%.
Sterling Infrastructure Inc. (NASDAQ:STRL) dropped 11.7% on a margin-mix problem: revenue rose 90% to $1.17 billion and the revenue guidance midpoint was lifted 8.7%, but the adjusted EBITDA midpoint went up only 5.3%.
UL Solutions Inc. (NYSE:ULS) slid 11.6%. The company’s revenue of $816 million was in line and adjusted EPS of 59 cents beat the 56-cent estimate. No guidance cut was disclosed, and the scale of the sell-off is not explained by the numbers themselves, pointing to a de-rating on in-line organic growth rather than a specific catalyst.
Elsewhere in the earnings tape, W.W. Grainger Inc. (NYSE:GWW) fell 5.8% even after posting EPS of $12.01 against $11.23 expected, Cummins Inc. (NYSE:CMI) lost 3.5% on EPS of $6.73 versus $7.26 expected, and TransDigm Group Inc. (NYSE:TDG) slipped 4.0% despite EPS of $10.87 topping estimates. Energy producers followed crude lower, with Diamondback Energy Inc. (NASDAQ:FANG) down 3.8%.
Tuesday’s Russell 1000 Top Gainers
| Name | % change |
|---|---|
| Wayfair Inc. | +30.39% |
| Palantir Technologies Inc. | +27.40% |
| Zebra Technologies Corporation | +22.03% |
| Applied Optoelectronics, Inc. | +20.05% |
| Gartner, Inc. | +16.71% |
Tuesday’s Russell 1000 Top Losers
| Name | % change |
|---|---|
| Bruker Corporation | -18.05% |
| Aptiv PLC | -17.84% |
| NRG Energy, Inc. | -16.37% |
| Sterling Infrastructure, Inc. | -11.67% |
| UL Solutions Inc. | -11.64% |
