Oil Premium Deflates, Dow Sets a Record, Korea Gives Back the Squeeze
Data:
Main Theme: “The Oil Premium Comes Out” — The Dow closes at an all-time high as crude drops another 5% on the Iran de-escalation, ISM Manufacturing prints its strongest reading in four years, and the yields that dominated July finally pull back. Korea, meanwhile, gives back a quarter of Friday’s record squeeze.
August opened by unwinding July’s central problem. Over the weekend Trump called off a planned strike on Iran and announced talks; crude gapped down and kept falling through the session. The mechanism from there was straightforward — lower energy costs reduce the second-half inflation risk, which relieves the long end, which lifts duration-sensitive equities. The Dow settled at a record 53,178.41 and the S&P closed within roughly 0.3% of its June all-time high. The leadership was notably not the semiconductor complex that drove last week: software and consumer names led, while Asian chip names fell hard in their own session.
🟩 U.S. Equities | Dow Record, Broad Participation
| Index | Closing Level | Net Points Change | % | Session Stance |
| Dow Jones Industrials | 53,178.41 | 🟩 +693.38 | +1.32% | All-time closing high |
| S&P 500 | 7,600.50 | 🟩 +110.78 | +1.48% | ~0.3% from the June record |
| Nasdaq Composite | 25,913.9 | 🟩 +540.05 | +2.08% | Session leader |
| Russell 2000 | — | 🟩 — | >+1% | Participated — broad rally |
Breadth was genuinely broad this time, unlike Friday’s two-stock tape. All four major averages gained more than 1%, with financials, industrials and utilities all participating alongside technology.
Notable movers: Amazon crossed $3 trillion in market capitalisation, extending its post-earnings surge. CoreWeave rose more than 18%, as the market extrapolated continued GPU demand from last week’s hyperscaler results ahead of its own August 11 report. Alibaba’s US-listed shares gained 4% after unveiling Qwen3.8-Max, one of its most capable models to date, due for official release next week. IMAX hit an all-time high on a third consecutive $50 million-plus global box office weekend.
Earnings season context: according to Bank of America Securities, 77% of reporting S&P 500 companies have topped estimates — the highest Q2 beat rate since 2021.
The corrected July scoreboard:
| Index | July 2026 return |
| Dow Jones | +0.32% (fourth straight winning month) |
| S&P 500 | −0.13% (ends 11-year streak of positive Julys) |
| Nasdaq Composite | −3.20% |
🟥 Asian Bourses | Korea Reverses Hard
Asia traded Monday before the US rally, and gave back a substantial portion of Friday’s historic squeeze.
South Korea (KOSPI): −4.86% to 6,274.74. SK Hynix fell 6.90% to around 1,600,000 won and Samsung Electronics dropped 7.52% to 243,000 won. Both had been limit-up or near it on Friday. The pattern across four sessions — down 17% in three days, up 17.91% in one, down 4.86% the next — is the clearest evidence available that this market is being moved by leverage, not fundamentals.
Japan (Nikkei 225): −1.12% to 63,643.61, a much milder pullback after Friday’s 4.03% gain. Kioxia bucked the trend, rising 6.37% to ¥49,460, while SoftBank Group added 0.97% — Japanese chip names held up considerably better than Korean ones.
One notable sell-side call: Morgan Stanley upgraded South Korean equities to Overweight, framing July’s 22.2% drawdown as an attractive entry after leveraged capital liquidation, with a long-term KOSPI target of 9,000 and a preference for industrials, defence and financials over semiconductors.
🟧 Commodities | The Risk Premium Deflates
Crude fell for a second consecutive session. Brent dropped 4.68% to $83.82/bbl, below $84 for the first time since the escalation, while WTI traded down as much as 6.87% to around $78.88 intraday. Combined with Sunday’s move, that is roughly a $10 decline in Brent from Friday’s $90.12 settle in two sessions.
Three bearish forces converged:
- Geopolitical: Trump’s cancellation of the strike and announcement of talks. Iran denied holding direct talks with the US, but said discussions with Oman on improving shipping through the strait were progressing.
- Alternative supply routes: Turkey and Iraq extended a key oil pipeline agreement by one year, supporting export capacity that bypasses Hormuz.
- Supply growth: OPEC+ agreed to raise output for a fifth consecutive month in August, with the seven core members adding 188,000 bpd — the third straight month at that increment. Analysts continue to project a meaningful global surplus for 2026.
Treasury yields pulled back alongside crude, reversing part of last week’s move that took the 30-year to a 19-year high near 5.25% and the 10-year above 4.70%. That easing was the mechanical driver of the equity rally.
📰 Macro “Red News” | ISM Manufacturing Beats Big
ISM Manufacturing PMI (July): 55.6 versus 54.0 expected, up 2.3 points from 53.3 — the highest reading since May 2022 and a seventh consecutive month of expansion. Four of five subindices improved.
| Component | July | June | Read |
| Headline PMI | 55.6 | 53.3 | Strongest in 4+ years |
| Production | 58.5 | 52.2 | Sharp acceleration |
| New Orders | 56.7 | 56.0 | Seventh month expanding |
| Employment | 52.8 | 49.7 | First expansion in nearly three years |
| Backlog of Orders | 55.0 | — | Demand outpacing capacity |
| Prices Paid | 71.1 | 73.0 | Eased, but beat the 70.3 forecast |
| Customers’ Inventories | 40.7 | — | Very low — restocking tailwind |
The nuance that matters. The headline is unambiguously strong, and the employment reading returning to expansion is a genuinely constructive signal three days before payrolls. But Prices Paid at 71.1 came in above forecast, and the composition of survey commentary is revealing: pricing volatility appeared in 57% of negative comments, the Iran war in 43%, lengthening lead times in 22% and tariffs in 18%.
That is the honest read of the day. Roughly half the cost complaints are energy and war-related and should now fade with crude down $10. The other half — lead times, tariffs, component scarcity — will not. That second channel is the same one Apple cited last week when cutting guidance on memory and component availability, and it does not improve if Hormuz reopens.
S&P Global US Manufacturing PMI (July final): 53.8, down marginally from 53.9 in June and below the 54.3 expected, with production growth at its slowest since March. The divergence with ISM is wide this month; the ISM detail is the more bullish of the two.
🌙 After the Bell | Palantir Delivers
Palantir (PLTR) closed at $125.86 and rose 7–10% in extended trading toward $136–140.
- Q2 revenue of $1.94 billion, up 93%, against a $1.81 billion consensus and the company’s own $1.80 billion guidance — accelerating from 85% growth in Q1.
- Adjusted EPS of $0.41 versus $0.35 expected. GAAP net income of $1.06 billion, a 55% net margin; adjusted operating margin of 62%; Rule of 40 score at 155.
- US commercial revenue surged 149% to $764 million; US government revenue rose 90% to $809 million. Remaining US commercial deal value more than doubled to $6.24 billion, with a record $2.13 billion in US total contract value and 220 deals of at least $1 million.
- Full-year guidance raised sharply to $8.15–8.16 billion from $7.65–7.66 billion; Q3 guided to roughly $2.16 billion; US commercial full-year outlook lifted to above $3.42 billion from $3.22 billion. CEO Alex Karp said the growth trajectory “looks like this is going to go on for at least another 18 months.”
Context: Palantir entered the print down 29% year-to-date and roughly 40% below its November 2025 high of $207.52, having fallen after each of its last four reports despite eight consecutive EPS beats. The guidance raise was the specific condition analysts had set, and it was met with room to spare.
📌 Reading the Session
- The rally had a mechanism, not just a mood. Oil down → inflation risk down → yields down → duration rallies. That is a coherent chain, which makes it more durable than last week’s positioning-driven squeeze. The breadth confirms it.
- But it rests on an unconfirmed premise. Iran has denied direct talks with Washington, and its Foreign Ministry has said the Oman shipping understanding does not mean Hormuz reopens. The market has now priced roughly $10 of Brent on an outcome the counterparty disputes. Three prior de-escalation announcements have been reversed.
- The memory bottleneck is untouched by any of this. ISM lead-time and pricing complaints, Apple’s guidance cut, and Korea’s violence all point at the same physical constraint. Energy relief does not fix it.
This week: AMD reports Tuesday, SanDisk Wednesday, and July nonfarm payrolls land Friday — consensus +91,000, unemployment expected at 4.3%. With ISM Employment back in expansion at 52.8, the payrolls bar just moved slightly higher.
Companies
Theme: “Software Takes the Baton” — With the hardware complex exhausted after last week’s squeeze, leadership rotated decisively into software and consumer names. Amazon crossed $3 trillion, CoreWeave gained 18%, and Palantir closed the day with the cleanest AI earnings print of the entire cycle. The chipmakers that led on Thursday were the ones being sold in Seoul.
Monday resolved a question left open by last week: whether the AI trade could keep working once the memory squeeze stopped providing fuel. The answer was that it could — but through a different door. Every major winner on Monday monetises AI through software, services or capacity rental rather than through selling silicon. That is a meaningful rotation, and it happened on the same day Korean memory names fell 7%.
- Palantir: The Quarter That Ended the Debate
Palantir (PLTR) closed at $125.86 and jumped 7–10% after hours toward $136–140 on results that beat on every headline line and lifted guidance materially.
| Metric | Q2 2026 actual | Versus expectation |
| Revenue | $1.94bn, +93% YoY | Consensus $1.81bn; own guide ~$1.80bn |
| Adjusted EPS | $0.41 | Consensus $0.35 |
| US commercial revenue | $764m, +149% YoY | Re-acceleration after Q1 softness |
| US government revenue | $809m, +90% YoY | Despite summer contract scrutiny |
| GAAP net income | $1.06bn (55% margin) | vs ~$329m a year earlier |
| Adj. operating margin | 62% — Rule of 40 at 155 | Exceptional at this scale |
| FY26 revenue guidance | $8.15–8.16bn | Raised from $7.65–7.66bn |
Why the reaction was different this time. Palantir has beaten EPS for eight consecutive quarters and fallen after each of the last four reports. The stock entered Monday down 29% year-to-date and roughly 40% below its November 2025 high of $207.52. Analysts had set a specific bar: Oppenheimer’s Param Singh identified a full-year guidance raise implying at least 75% growth — roughly $7.83 billion — as the threshold signalling genuine second-half acceleration. Palantir cleared it by more than $300 million.
The durability signals matter more than the quarter. Remaining US commercial deal value more than doubled to $6.24 billion, the company booked a record $2.13 billion in US total contract value, and closed 220 deals of at least $1 million. US commercial guidance was lifted to above $3.42 billion from $3.22 billion. CEO Alex Karp told CNBC the trajectory “looks like this is going to go on for at least another 18 months,” adding that to his knowledge no business at Palantir’s scale has grown even half this much.
The caveat that has not gone away: at roughly 61 times sales, the valuation still requires this pace to continue. Palantir also faces regulatory scrutiny in the UK and an uneven international expansion. The stock broke below its 100-week moving average earlier this year and the technical structure remains damaged even after the pop.
- Amazon Crosses $3 Trillion
Amazon (AMZN) extended its post-earnings surge and passed a $3 trillion market capitalisation on Monday, a level reached three sessions after reporting AWS growth of 37% — the fastest in eighteen quarters — on a $496 billion backlog and the first $200 billion revenue quarter in company history.
This is the clearest confirmation available that the market’s test is contracted revenue rather than announced spending. Amazon guided 2026 capex up to $220 billion and swung trailing-twelve-month free cash flow to a $7.6 billion outflow — and still added roughly a quarter of a trillion dollars in value across three sessions, because the backlog is disclosed and dated.
- The Capacity Layer: CoreWeave and the Neoclouds
CoreWeave rose more than 18% — one of the largest moves in the S&P complex on the day. The business rents GPUs and adjacent hardware to AI firms, which makes it a direct derivative of hyperscaler demand without carrying the semiconductor cycle’s inventory risk.
The logic driving the move is straightforward: if Microsoft’s backlog is up 84% to $678 billion and AWS is accelerating, then compute capacity remains scarce and rental pricing holds. CoreWeave reports Q2 on Tuesday, August 11, which makes Monday’s move an anticipatory position rather than a confirmed one — worth noting for anyone sizing exposure here.
- Alibaba and the Open-Model Competition
Alibaba’s US-listed shares gained 4% after the company unveiled Qwen3.8-Max, among the most capable models in its portfolio, with official release scheduled for next week.
The strategic context is more interesting than the price move. Chinese open-weight models have closed the capability gap rapidly, and this is now an active US policy question — Palantir joined Nvidia, Microsoft and Meta last month in a letter urging regulators not to restrict open-weight models. Karp has argued publicly that competition is what keeps frontier labs honest. For enterprise buyers, cheaper capable open models compress the pricing power of closed frontier APIs, which is a medium-term margin question for the entire application layer.
- Semiconductors: The Other Side of the Rotation
While US software rallied, Asian memory names were sold hard in the Monday session.
| Company | Monday move | Context |
| SK Hynix | −6.90% to ~₩1,600,000 | Was limit-up +29.95% on Friday |
| Samsung Electronics | −7.52% to ₩243,000 | Was +26.81% on Friday |
| Kioxia | +6.37% to ¥49,460 | Bucked the trend entirely |
| SoftBank Group | +0.97% | Held up with Japanese peers |
The four-session sequence for Korean chips — down roughly 17% over three days, up 17.91% in one, down 4.86% the next — is not a fundamental story. Samsung reported operating profit up 1,813.8% year-over-year and the stock has fallen in three of the four sessions since. This is leverage unwinding, and it has not finished.
Morgan Stanley took the other side, upgrading Korean equities to Overweight with a long-term KOSPI target of 9,000, framing July’s 22.2% drawdown as an entry point created by forced liquidation. Notably, the bank favours industrials, defence and financials rather than semiconductors — a call on the index, not on memory.
📋 6. Other Notable Movers
- IMAX hit an all-time high after generating more than $50 million in global ticket sales for a third consecutive weekend, driven by the Christopher Nolan release.
- Refiners face the opposite setup to last week. PBF Energy, Delek US, Par Pacific and HF Sinclair all closed at record highs on Thursday on crack spreads inflated by a closed Strait of Hormuz. With Brent down roughly $10 in two sessions, that premium is compressing — this is the most direct corporate exposure to the Iran negotiations.
- Also reporting Monday after the close: ON Semiconductor, Vertex Pharmaceuticals, Snap, Williams Companies, ONEOK, Diamondback Energy, SBA Communications and Clorox. Diamondback and the midstream names reported into the crude gap-down, making hedging and realised-pricing commentary more relevant than the quarters themselves.
📊 7. Earnings Season Scorecard
Per Bank of America Securities, 77% of S&P 500 companies that have reported have beaten estimates — the highest Q2 beat rate going back to 2021. That is the quiet structural support under this market, and it is worth separating from the AI narrative: the breadth of beats is far wider than the breadth of the rally has been.
📌 Analyst Take
Monday marked a rotation within the AI trade rather than an extension of it. Last week rewarded whoever sold the scarce physical input — memory, equipment. Monday rewarded whoever sells the abstraction layer above it: Palantir’s software, Amazon’s cloud, CoreWeave’s rented capacity. These are different exposures with different risk profiles, and the second group is materially less sensitive to component pricing and Korean deleveraging.
The hierarchy the market has now established across four sessions is consistent and usable: contracted backlog beats announced capex; software margins beat hardware margins; and anything priced on a war premium is now a policy trade.
Tuesday is the direct test of the other side. AMD reports with MI450 and Helios production updates expected, alongside Caterpillar, McDonald’s, Merck, BP, HSBC and — for the first time as a public company — SpaceX. If AMD confirms that memory and packaging constraints are limiting shipments, the Apple thesis from last week generalises to the whole hardware layer, and Monday’s software rotation gets a second leg.
General
Monday, August 3rd, 2026: The Chain Reaction Works — Once
Monday was the first session in three weeks with a clean, legible transmission mechanism. Oil fell on the Iran de-escalation; the inflation risk for the second half fell with it; the long end of the Treasury curve relieved; duration-sensitive equities rallied broadly. The Dow closed at a record 53,178.41 and every major index gained more than 1%. After a month in which index levels concealed violent internal damage, the internals and the headline finally agreed.
The question for the rest of the week is whether the first link in that chain holds. It rests on a negotiation that had not yet begun when the market closed, with a counterparty that has publicly denied the terms.
- The Mechanism, and Where It Can Break
July’s market had one dominant problem: the long end would not stop selling. The 30-year finished last week at 5.25%, a 19-year high, with three FOMC members dissenting in favour of a hike and roughly 54% odds of an increase priced. That was fundamentally an energy story — Brent gained 24% in July on a closed Strait of Hormuz.
Monday removed a large part of that. Brent fell 4.68% to $83.82 and WTI touched $78.88, roughly $10 off Friday’s settle across two sessions. Yields pulled back, and equities did what they are supposed to do when the discount rate falls.
Three things reinforced the crude move beyond the headline: Turkey and Iraq extended a key pipeline agreement by a year, expanding export capacity that bypasses Hormuz; OPEC+ added output for a fifth consecutive month, with the core seven contributing 188,000 bpd; and analysts continue to model a meaningful 2026 surplus. Even without a deal, the supply picture has structurally improved.
But the negotiation itself is unconfirmed. Iran denied holding direct talks with the United States, and its Foreign Ministry stated that an understanding with Oman on shipping routes does not mean the Strait reopens. Three prior de-escalation announcements since February have been reversed. The market has priced roughly $10 of Brent on a premise the counterparty disputes.
- ISM Splits Inflation Into Two Buckets — and Only One Is Fixed
The July ISM Manufacturing report at 55.6 versus 54.0 expected was the strongest reading since May 2022, with Production at 58.5 and Employment back in expansion at 52.8 for the first time in nearly three years. On the surface, a clean growth print three days before payrolls.
The useful information was in the commentary composition. Among negative respondent comments: pricing volatility appeared in 57%, the Iran war in 43%, lengthening lead times in 22% and tariffs in 18%. Prices Paid eased to 71.1 from 73.0 but came in above the 70.3 forecast.
That splits the inflation problem cleanly into two components with different futures:
| **Cost channel | **Evidence | Does Hormuz relief fix it? |
| Energy and war premium | 43% of negative ISM comments; Brent +24% in July | Yes — already reversing |
| Lead times and scarcity | 22% of comments; supplier delays worsening 11 straight months | No |
| Tariffs | 18% of comments | No |
| Wages | ECI +0.9% QoQ; compensation +3.4% YoY; real wages −0.4% | No |
This is the single most important analytical point of the session. Roughly half the cost pressure is now unwinding and half is structural. Apple’s guidance cut last week was entirely in the second bucket — memory and component availability, not fuel. So was Micron’s pricing power, and so is the Korean market’s violence. A Hormuz deal relieves the rate problem substantially; it does nothing for the component problem.
- Leadership Rotated, and That Is the Real Signal
Monday’s gains did not come from where last week’s came from. Software and consumer names led, not semiconductors. Amazon crossed $3 trillion, CoreWeave rose 18%, Alibaba gained 4% on a new model release, and Palantir delivered 93% revenue growth after the close. Meanwhile, in the Asian session, SK Hynix fell 6.90% and Samsung 7.52%.
The read: capital is moving from the layer that buys the scarce input to the layer that sells the abstraction above it. Software margins do not degrade when memory prices rise. Cloud capacity rental does not carry inventory risk. That is a rational response to the constraint ISM just documented, and it is more durable than a short squeeze.
- Korea Remains the System’s Weak Point
The KOSPI’s four-session sequence — −17% over three days, +17.91% in one, −4.86% the next — has no fundamental explanation. Samsung posted operating profit up 1,813.8% year-over-year and has fallen in three of those four sessions. Regulators have already capped retail allocation in leveraged single-stock ETFs at 20% after repeated circuit breakers.
Morgan Stanley upgraded the market to Overweight with a 9,000 long-term KOSPI target, explicitly framing the drawdown as forced liquidation creating value — but favouring industrials, defence and financials over semiconductors. That distinction is telling: it is a call on the index recovering, not on the memory cycle. For anyone with Asian technology exposure, the deleveraging is not visibly complete.
📊 Global Macro Sentiment Summary — Monday, August 3rd, 2026
| Narrative Channel | Core Fundamental Trigger | Net Portfolio Posture |
| Index Structure | Dow record close 53,178.41 (+1.32%); S&P +1.48%; Nasdaq +2.08%; Russell >+1% | 🟩 Broad and mechanical |
| Energy | Brent −4.68% to $83.82; WTI to ~$78.88; ~$10 off Friday in two sessions | 🔄 Premium deflating |
| Rates | Yields pulled back from 30Y 5.25% / 10Y 4.73% highs | 🟨 Relief, not resolution |
| Manufacturing | ISM 55.6 vs 54.0 exp — best since May 2022; Employment 52.8 | 🟩 Genuinely strong |
| Inflation detail | Prices Paid 71.1, above the 70.3 forecast; lead times worsening 11 months | 🟨 Half fixed, half structural |
| Leadership | Software, cloud and consumer led; semis lagged | 🔄 Rotation within AI |
| Asia | KOSPI −4.86% to 6,274.74; Nikkei −1.12%; SK Hynix −6.9%, Samsung −7.5% | 🟥 Deleveraging continues |
| Earnings | 77% S&P 500 beat rate — highest since 2021; Palantir +93% revenue | 🟩 Broad fundamental support |
| Geopolitics | Iran denies direct talks; Oman route ≠ Hormuz reopening | ⚠️ Unconfirmed premise |
Upcoming News
Tuesday, August 4th, 2026 — Theme: “AMD Answers the Component Question” — A thin macro calendar hands the session to earnings, where AMD tests whether last week’s memory constraint generalises across the hardware layer, SpaceX reports for the first time as a public company, and the Iran talks enter day two with roughly $10 of Brent riding on them.
Tuesday is a corporate day, not a macro one. The economic releases are second-tier and none of them changes the rate debate before Friday’s payrolls. What does matter is that AMD, Caterpillar, McDonald’s, Merck, BP, HSBC and SpaceX all report within a few hours of each other, covering semiconductors, industrials, consumer, pharma, energy, banking and space — an unusually complete cross-section of the economy in a single session.
🔴 High-Impact Calendar — Tuesday, August 4th, 2026
Times in ICT (Hanoi). ET is ICT minus 11 hours.
| Time (ICT) | Currency | Event / Indicator | Consensus | Impact |
| 18:45 | USD | ICSC Weekly Retail Sales | — | 🟢 Low |
| 19:30 | USD | International Trade Balance (June) | — | 🟠 Med |
| 19:30 | USD | Advance Goods Trade Balance (June) | — | 🟠 Med |
| 19:55 | USD | Johnson/Redbook Weekly Sales | — | 🟢 Low |
| 21:00 | USD | JOLTS Job Openings (June) | Slightly below May | 🔴 High |
| 21:00 | USD | Factory Orders (MoM, June) | ~+0.2% | 🟠 Med |
| 21:00 | USD | Durable Goods Orders (MoM, June, final) | — | 🟠 Med |
| Morning | CAD | Canada S&P Global Manufacturing PMI (July) | — | 🟢 Low |
| 03:30 (Wed) | USD | API Weekly Crude Inventories | — | 🟠 Med |
| US afternoon | — | US–Iran negotiations, day two | — | 🔴 High |
- JOLTS (21:00 ICT) — The Only Macro Print That Matters
Job openings hit a two-year high in May, an encouraging signal in what economists have described as a low-hire, low-fire labour market. For June, consensus expects a slight month-on-month decline.
The reading gains weight from Monday’s ISM, where the manufacturing Employment Index returned to expansion at 52.8 from 49.7 — its first expansionary print in nearly three years. If JOLTS confirms that hiring intent is firming rather than fading, the bar for Friday’s payrolls moves higher and the case for a Fed hike strengthens at the margin. If openings fall materially, it reopens the “slowing growth with sticky inflation” reading that drove the 30-year to a 19-year high last week.
Context for the week: Q2 GDP came in at 1.5% against 2.1% expected, core PCE is stuck at 3.3%, compensation is running at 3.4% with real wages negative 0.4% year-over-year, and the FOMC held at 3.50–3.75% with three dissents in favour of a hike.
- AMD — The Session’s Real Event
Advanced Micro Devices reports Q2, with the market expecting updates on MI450 and Helios production. This is the direct test of the thesis that emerged last week.
What is being tested. Apple cut guidance on 31 July not because demand weakened but because it could not secure enough advanced chips and memory — Tim Cook described a supply chain with fundamentally less flexibility at current demand levels. ISM corroborated it on Monday: supplier delivery times have now worsened for eleven consecutive months, and lead times appeared in 22% of negative survey comments.
If AMD confirms that packaging and memory constraints are limiting what it can ship, the Apple problem generalises from one consumer hardware company to the entire silicon layer — which is bullish for the constrained inputs (memory, equipment) and bearish for everyone downstream. If AMD says supply is adequate, last week’s narrative weakens considerably.
Positioning context: AMD rose 13% on Thursday in the semiconductor squeeze, then the group failed its follow-through on Friday when Micron round-tripped from +6.4% to −5.9%. The sector is not cleanly positioned in either direction.
- SpaceX — First Report as a Public Company
SpaceX reports Q2, its debut earnings release following a post-IPO share price decline. There is no analyst track record, no established guidance convention and no historical print to anchor expectations — which means the range of plausible reactions is unusually wide.
The relevance beyond the name itself is what it signals about the 2026 IPO class. A weak debut print after an already-poor aftermarket performance would tighten conditions for the pipeline behind it; a strong one reopens it. Watch Starlink subscriber economics and launch cadence commentary rather than headline revenue.
- The Rest of the Slate
Before the open: Caterpillar (CAT), McDonald’s (MCD), Merck (MRK), BP, HSBC, Duke Energy (DUK), DuPont (DD), Marathon Petroleum (MPC), Cummins (CMI), Kimberly-Clark (KMB), W.W. Grainger (GWW), Entegris (ENTG), Leidos (LDOS), Idexx (IDXX), Apollo Global (APO), Ball (BALL), Aptiv (APTV), Archer-Daniels-Midland (ADM), Energy Transfer (ET), Gartner (IT).
Three to prioritise:
- Caterpillar — the cleanest read on whether the ISM manufacturing acceleration to 55.6 is showing up in actual orders, plus commentary on data-centre and electrical infrastructure demand.
- BP and Marathon Petroleum — both report into a $10 Brent decline. Refining margins are the market’s most exposed position right now, with PBF, Delek, Par Pacific and HF Sinclair all having closed at record highs last Thursday on crack spreads inflated by a closed Strait of Hormuz. Guidance and hedging commentary will matter more than the quarter.
- Entegris — a specialist read on semiconductor materials and consumables that often tells you more about fab utilisation than the headline chipmakers do.
- Iran Talks, Day Two
Negotiations were scheduled to begin Monday afternoon US time, with no venue or participant list disclosed. Trump said the framework covers the immediate reopening of the Strait of Hormuz and an end to Iran’s nuclear programme, and that he was asked to hold off strikes by Saudi Arabia, the UAE, Qatar and by Iran itself.
Tehran’s public position differs on every material point. Iran denies asking for the pause, denies agreeing to any arrangement over the Strait, and its Foreign Ministry has stated that an understanding with Oman over a new shipping route does not mean Hormuz reopens. Iran has warned vessels against using non-designated routes, and IRGC forces have targeted ships attempting transit. The Strait has been impassable since fighting resumed on 8 July, against roughly 20 million barrels per day of normal transit.
With about $10 of Brent already given back, the asymmetry has shifted: a confirmed deal is now substantially priced, while a breakdown is not.
- The Week Ahead
| Day | Key releases | Earnings |
| Wed 5 Aug | ADP private payrolls; ISM Services; China services PMI; Eurozone PPI | Eli Lilly, Disney, SanDisk, New York Times |
| Thu 6 Aug | Jobless claims; Challenger job cuts; productivity and unit labour costs; Eurozone retail sales | ConocoPhillips, Parker-Hannifin, Howmet, Diageo |
| Fri 7 Aug | July Nonfarm Payrolls — consensus +91,000; unemployment expected 4.3% from 4.2% | — |
ISM Services on Wednesday may be the week’s most important inflation read outside payrolls, since services prices sit at the centre of the Fed’s concern and are entirely insulated from the crude move. Also note the Senior Loan Officer Opinion Survey, released Monday afternoon, for evidence on whether policy is biting through credit conditions.
Snapshot
Monday, August 3rd, 2026 — Theme: “The Chain Reaction” — Oil down, yields down, everything up. The Dow closes at an all-time high, ISM Manufacturing posts its best reading since May 2022, and Palantir caps the day with 93% revenue growth after the bell. Korea, still deleveraging, falls 4.86%.
August began by dismantling July’s central problem. The weekend Iran de-escalation took roughly $10 out of Brent across two sessions, which relieved the long-end Treasury pressure that had defined the previous month, which in turn lifted every major US index by more than 1%. Unlike last week’s two-stock tape, Monday’s rally had breadth and a legible mechanism. The caveat is that the first link in the chain — a negotiation that had not begun when markets closed, with terms the counterparty publicly disputes — is the least reliable part of it.
🏛️ The Bottom Line
The Dow Jones Industrial Average closed at an all-time high of 53,178.41, up 693.38 points (+1.32%). The S&P 500 gained 1.48% to 7,600.50, within roughly 0.3% of its early-June record. The Nasdaq Composite led at +2.08% to 25,913.9, and the Russell 2000 also gained more than 1% — all four majors participating, with financials, industrials and utilities joining technology.
Leadership rotated away from semiconductors. Software and consumer names drove the session: Amazon crossed $3 trillion in market capitalisation, CoreWeave rose more than 18% ahead of its own 11 August report, Alibaba’s US shares gained 4% on the Qwen3.8-Max unveiling, and IMAX hit a record high on a third straight $50 million-plus box office weekend. Per Bank of America Securities, 77% of reporting S&P 500 companies have beaten estimates — the best Q2 rate since 2021.
Asia went the other way, trading Monday before the US rally. The KOSPI fell 4.86% to 6,274.74, with SK Hynix down 6.90% and Samsung Electronics down 7.52% — both having been limit-up or near it on Friday. The Nikkei 225 eased 1.12% to 63,643.61, with Kioxia up 6.37% bucking the trend. Morgan Stanley upgraded Korean equities to Overweight with a long-term KOSPI target of 9,000, favouring industrials, defence and financials over chips.
Commodities delivered the day’s catalyst. Brent fell 4.68% to $83.82/bbl and WTI touched $78.88 intraday, down 6.87%, roughly $10 below Friday’s settle across two sessions. Three forces compounded: the cancelled strike and announced talks; a one-year extension of the Turkey–Iraq pipeline agreement; and OPEC+ adding output for a fifth consecutive month, with the core seven contributing 188,000 bpd. Treasury yields pulled back from last week’s highs of 5.25% on the 30-year and 4.73% on the 10-year.
Macro was strong. ISM Manufacturing came in at 55.6 against 54.0 expected, up 2.3 points and the highest since May 2022, with Production at 58.5 and Employment back in expansion at 52.8 from 49.7 — the first expansionary reading in nearly three years. Prices Paid eased to 71.1 from 73.0 but exceeded the 70.3 forecast. The S&P Global US Manufacturing PMI final came in at 53.8, below the 54.3 expected — a wide divergence, with the ISM detail the more bullish of the two.
After the bell, Palantir delivered. Revenue of $1.94 billion, up 93%, adjusted EPS of $0.41 versus $0.35 expected, US commercial revenue up 149% to $764 million, and full-year guidance raised to $8.15–8.16 billion from $7.65–7.66 billion. Shares closed at $125.86 and rose 7–10% in extended trading.
📉 Reference Levels for the Tuesday Open (August 4th)
Derived from recent session closes and range extremes — not vendor-published levels. Verify against your own charts.
| Asset | Support | Resistance | Operational Bias |
| S&P 500 | 7,489 (Fri close) → 7,437 | 7,624 (June record zone) | 🟩 Testing the high |
| Nasdaq Composite | 25,373 (Fri close) → 25,122 | 25,881 → 26,000 | 🟩 Momentum intact |
| Dow Jones | 52,485 (Fri close) | Record — no overhead | 🟩 Blue sky |
| Russell 2000 | 2,931 → 2,906 | 2,977 → 3,000 | 🟩 Participating |
| US 10Y Yield | 4.60% → 4.55% | 4.73% (last week high) | 🟨 Relieving |
| US 30Y Yield | 5.10% → 5.00% | 5.25% (19-yr high) | 🟨 Off the highs |
| Brent Crude | $81.55 → $78 | $88 → $90.12 (Fri settle) | 🔄 Headline-driven |
| WTI Crude | $78 → $76 | $84.67 (Fri settle) | 🔄 Headline-driven |
| KOSPI | 6,274 → 5,593 | 6,595 (Fri close) | ⚠️ Unstable |
📊 Market Sentiment & Bias
Equities (US): 🟩 Broad and mechanically driven. Unlike Friday, this was not two stocks. Every major index gained more than 1%, and the rally had a coherent causal chain rather than a positioning explanation. The 77% earnings beat rate provides structural support beneath the narrative.
Equities (Asia): 🟥 Deleveraging unfinished. A four-session sequence of −17%, +17.91%, −4.86% is leverage, not fundamentals. Samsung has fallen in three of four sessions since reporting operating profit up 1,813.8% year-over-year.
Fixed Income: 🟨 Relief, not resolution. Yields came off the highs, but the 30-year remains near a 19-year peak, three FOMC members are voting to hike, and compensation is still running at 3.4% with real wages negative.
Commodities: 🔄 Regime inverting on an unconfirmed premise. The supply-side improvements — OPEC+ output, the Turkey–Iraq pipeline — are real regardless of the talks. The $10 Brent decline is not.
Leadership: 🔄 Rotation within AI. Capital moved from the layer that buys scarce components to the layer that sells software and capacity above them. This is a rational response to a documented physical constraint and likely more durable than last week’s squeeze.
💡 Top Trade Takeaway: “Own the Abstraction Layer, Not the Input Cost”
Focus: Favour software, cloud and capacity names whose margins do not degrade when component prices rise. Retain upstream memory and equipment exposure where pricing power is documented. Treat refining and energy-sensitive positions as policy trades requiring active management. Keep gross exposure moderate into Friday’s payrolls.
Logic. The ISM report split the inflation problem into two halves with different futures. The energy half — 43% of negative survey comments referenced the Iran war — is unwinding now. The structural half is not: supplier delivery times have worsened for eleven consecutive months, lead times appeared in 22% of comments, tariffs in 18%, and wage compensation is stuck at 3.4%. Apple’s guidance cut last week lived entirely in the second bucket.
That is why Monday’s rotation makes sense. Palantir grew revenue 93% and raised full-year guidance by roughly $500 million without owning a fab. Amazon crossed $3 trillion on a $496 billion contracted backlog. CoreWeave rents capacity rather than carrying inventory. None of these business models is impaired by memory scarcity; several benefit from the compute shortage that causes it.
The most exposed position remains refining. PBF, Delek, Par Pacific and HF Sinclair all closed at record highs last Thursday on crack spreads that exist because the Strait of Hormuz is closed. With Brent down roughly $10 and BP and Marathon Petroleum reporting Tuesday morning, this is where the negotiation headlines transmit fastest.
The honest caveat. Iran denies holding direct talks with Washington and has stated that its Oman shipping understanding does not mean the Strait reopens. Three prior de-escalation announcements since February have been reversed. Monday priced a probability, not an outcome — and a breakdown would restore the entire July configuration of oil-driven inflation, a hawkish Fed and a steepening curve within days.
Calendar discipline: JOLTS and AMD Tuesday; ADP and ISM Services Wednesday; jobless claims Thursday; July nonfarm payrolls Friday — consensus +91,000, unemployment expected to tick up to 4.3%.
This reports belong to the asset of The Concept Trading and Van Hung Nguyen
