Source: Charles Schwab, data from 8/3 – 8/7

Weekly Market Minute

“Action is the foundational key to all success.”
— Pablo Picasso

🧭 This Week In the Markets

Image Source: AP Photo/Yuki Iwamura

Stocks Rally to Record Highs on Multiple Positive Catalysts

U.S. stocks surged to record highs this week, with the S&P 500 gaining over 3%, the Dow Jones Industrial Average rising more than 1,500 points, and the Nasdaq Composite climbing over 5%. The rally was driven by growing optimism that the U.S. and Iran could reach an agreement to reopen the Strait of Hormuz, easing concerns over global oil supplies and pushing crude prices lower, while declining Treasury yields provided additional support for stocks. Investors have also encouraged by an exceptionally strong second-quarter earnings season, with broad-based profit growth extending beyond technology into sectors such as healthcare, industrials, financials, and consumer staples.

Technology stocks were among the strongest performers, with semiconductors, software, and other large-cap names benefiting from continued enthusiasm around artificial intelligence. At the same time, gains across economically sensitive sectors such as industrials showed that the rally was not limited to technology, helping broaden the market’s advance and lift the major indexes to new highs.

Job Growth Stalls as Participation Rate Falls

The U.S. labor market weakened sharply in July, with nonfarm payrolls unexpectedly falling by 23,000 compared with expectations for a gain of 83,000. The decline was driven by losses in government, retail, leisure and hospitality, and financial activities, while healthcare and construction added jobs at a slower pace. Although the unemployment rate edged down to 4.1%, the improvement was largely due to a 264,000 decline in the labor force, which pushed the labor force participation rate to 61.4%, its lowest level in more than five years. Wage growth also slowed, with average hourly earnings up just 3.2% from a year ago. The softer report raised new concerns about labor market momentum and shifted investor expectations toward a more cautious Federal Reserve, helping send Treasury yields lower and stock futures higher.

Amazon Surpasses $3 Trillion in Market Value

Amazon surpassed $3 trillion market capitalization for the first time after shares reached a new all-time high following stronger-than-expected second-quarter results. The quarter was highlighted by accelerating growth in Amazon Web Services, supported by strong artificial intelligence demand. Amazon also raised its 2026 capital spending forecast to $220 billion from $200 billion, with CEO Andy Jassy noting that even this increased investment may not be enough to meet anticipated demand through 2027 and 2028. Strong cloud growth reported by Microsoft and Google alongside Amazon further underscored the continued strength of enterprise demand for AI infrastructure.

🏢 Corporate Earnings

• SpaceX (SPCX) reported second-quarter results above expectations, with a loss per share of $0.09 on $7.81 billion of revenue compared to estimates of a $0.26 loss and $6.93 billion, as profitability from Starlink partially offset weakness in its AI and space businesses.
• Advanced Micro Devices (AMD) topped second-quarter expectations, reporting adjusted earnings of $1.66 per share on $11.54 billion in revenue compared with estimates of $1.62 and $11.28 billion, as data center sales more than doubled from a year earlier on strong demand for its AI accelerators and server processors.
• Caterpillar (CAT) surpassed second-quarter expectations, delivering adjusted earnings of $8.17 per share on $20.54 billion in revenue compared with estimates of $6.20 per share, as strong data center construction and power-generation demand prompted the company to raise guidance.
• Eli Lilly (LLY) beat second-quarter expectations, posting adjusted earnings of $8.38 per share on $22.97 billion in revenue compared with estimates of $6.01 and $20.73 billion, as surging demand for Zepbound and Mounjaro supported results.
• Palantir Technologies (PLTR) delivered stronger-than-expected second-quarter results, with revenue rising 93% year-over-year to $1.94 billion compared with estimates of $1.80 billion, as both commercial and government demand surged.

📊 Sector Performance

5-day closing price ($) and change (%)

Source: Select Sector SPDRs, data based on the Sector SPDR ETFs as of 8/7

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Source: Charles Schwab

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Sources: CNBC, CNBC, CNBC
Corporate Earnings: SpaceX, Advanced Micro Devices, Caterpillar, Eli Lilly, Palantir Technologies

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