Stocks Rally on Earnings and Fed-Friendly US Payroll Report

The S&P 500 Index ($SPX) (SPY) today is up +0.37%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.14%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.89%.  September E-mini S&P futures (ESU26) are up +0.44%, and September E-mini Nasdaq futures (NQU26) are up +0.93%.

Stock indices are moving higher today with some positive corporate earnings results.  Stock indices added to their gains today as bond yields tumbled after US July nonfarm payrolls unexpectedly declined and average hourly earnings rose less than expected, bolstering speculation that the Fed won’t be forced to raise interest rates any time soon.  The 10-year T-note yield is down -6 bp to 4.62%.

Atlassian is up more than +30% to lead software stocks higher today after forecasting stronger-than-expected Q1 revenue.  Also, cybersecurity stocks are rallying today, led by a +13% jump in Cloudflare after it reported better-than-expected quarterly earnings.  In addition, chipmakers received support today as Microchip Technology rose more than +10% after forecasting stronger-than-expected net sales for next quarter. 

US July nonfarm payrolls unexpectedly fell by -23,000, weaker than expectations of an +80,000 increase and the first decline in 5 months. June payrolls were revised downward to show a +20,000 increase from the previously reported +57,000.  The July unemployment rate unexpectedly fell -0.1 to a 13-month low of 4.1%, showing a stronger labor market than expectations of no change at 4.2%.

US July average hourly earnings rose +0.1% m/m and +3.2% y/y, weaker than expectations of +0.3% m/m and +3.5% y/y.

Thursday evening, St. Louis Fed President Alberto Musalem said policymakers cannot afford to tolerate higher inflation and "it is crucial that monetary policy put a meaningful restraint on underlying inflation, rather than tolerating somewhat higher inflation today to pursue productivity growth tomorrow."

Sep WTI crude oil prices (CLU26) gave up an overnight advance and turned lower today after President Trump said negotiations between Iran and Oman over the Strait of Hormuz are "moving along." However, the Wall Street Journal reported that Arab negotiators are concerned that Iran's diplomats may not be able to guarantee compliance with any agreement reached, as Iran's lead negotiators are under pressure from hardline officials to eke out more explicit references to Iran's role in the strait and clearer benefits.  On Thursday, Iran's semi-official Fars news agency reported that vessels belonging to the US, Israel, or any other nation that has "caused damage" to Iran would be prohibited from the Strait of Hormuz under the proposed deal with Oman to reopen the waterway, which would restrict some oil exports from several Gulf States. 

The markets are waiting for news of an Iran-Oman agreement to partially reopen the Strait of Hormuz.  A joint statement from the two countries is under review, and the route would remain active for two to four months, though the agreement does not mean a full reopening, according to Iranian officials.  Iran said that a normalization of the strait will depend on the US lifting its blockade on Iranian ports.

The outlook for strong Q2 earnings is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2.  So far, earnings results have been positive, with 86% of the 440 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. 

The markets are discounting a 44% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.

Overseas stock markets are mixed today.  The Euro Stoxx 50 climbed to a new all-time high and is up +0.69%.  China's Shanghai Composite rose to a 3-week high and closed up +1.02%.  Japan's Nikkei-225 Stock Average closed down -0.12%.

Interest Rates

September 10-year T-notes (ZNU6) are up +13 ticks today.  The 10-year T-note yield is down -5.5 bp to 4.623%.  T-note prices jumped today on the Fed-friendly July payroll report that showed an unexpected decline in nonfarm payrolls and a smaller-than-expected increase in average hourly earnings, bolstering speculation that the Fed won’t be forced to raise interest rates any time soon.  Lower crude oil prices today are also supportive for T-note prices.

European government bond yields are moving lower today.  The 10-year German bund yield is down -2.0 bp to 3.120%.  The 10-year UK gilt yield is down -3.8 bp to 4.900%.

German trade news was better than expected.  German June exports rose +0.9% m/m, stronger than expectations of +0.5% m/m.  Also, June imports rose +4.4% m/m, stronger than expectations of +2.0% m/m.

German June industrial production rose +0.2% m/m, right on expectations.

Markets are discounting an 84% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.

US Stock Movers

Microchip Technology (MCHP) is up more than +12% to lead chipmakers higher after forecasting Q2 net sales of $1.59 billion to $1.62 billion, well above the consensus of $1.56 billion.  Also, Marvell Technology (MRVL), KLA Corp (KLAC), and Analog Devices (ADI) are up more than +3%, and NXP Semiconductors NV (NXPI), Qualcomm (QCOM), ASML Holding NV (ASML), Applied Materials (AMAT), ARM Holdings Plc (ARM), and Texas Instruments (TXN) are up more than +2%.

Atlassian (TEAM) is up more than +30% to lead software stocks higher today after forecasting stronger-than-expected Q1 revenue. Also, Datadog (DDOG) and ServiceNow (NOW) are up more than +6%, and Palantir Technologies (PLTR) is up more than +5%.  In addition, Workday (WDAY) is up more than +4%, and Autodesk (ADSK) is up more than +2%.  Finally, Salesforce (CRM) is up more than +2% to lead gainers in the Dow Jones industrials. 

Cybersecurity stocks are rallying today, led by a +15% jump in Cloudflare (NET) after it reported better-than-expected quarterly earnings. Also, CrowdStrike Holdings (CRWD), Zscaler (ZS), and Okta (OKTA) are up more than +3%, and Palo Alto Networks (PANW) is up more than +2%.  In addition, Fortinet (FTNT) I sup more than +1%. 

Mining stocks are rallying today amid the surge in gold and silver prices.  Anglogold Ashanti (AU) is up more than +11%, and Coeur Mining (CDE) is up more than +9%.  Also, Newmont Corp (NEM), Hecla Mining (HL), and Barrick Mining (B) are up more than +6%, and Southern Copper (SCCO) and Freeport McMoRan (FCX) are up more than +2%.

Doximity (DOCS) is up more than +78% after raising its 2027 revenue forecast to $671 million to $681 million from a previous forecast of $664 million to $676 million, stronger than the consensus of $672.8 million.

Twilio (TWLO) is up more than +23% after boosting its full-year adjusted operating income forecast to $1.14 billion to $1.16 billion from a previous forecast of $1.04 billion to $1.06 billion, higher than the consensus of $1.10 billion. 

Natera (NTRA) is up more than +16% after raising its full-year revenue forecast to $2.85 billion to $2.91 billion from a previous forecast of $2.74 billion to $2.82 billion, stronger than the consensus of $2.80 billion.

Airbnb (ABNB) is up more than +13% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q2 revenue of $3.61 billion, better than the consensus of $3.58 billion, and said it now expects full-year revenue growth to improve to “at least mid-teens,” up from previous expectations for “low- to mid-teens.”  

Maplebear (CART) is up more than +7% after reporting Q2 revenue of $1.04 billion, better than the consensus of $1.03 billion, and forecasting Q3 gross transaction value of $10.30 billion to $10.55 billion, above the consensus of $10.27 billion.

Trade Desk (TTD) is down more than -23% to lead losers in the S&P 500 after reporting Q2 revenue of $715 million, weaker than the consensus of $752.4 million, and forecasting Q3 revenue of $650 million, well below the consensus of $808.4 million. 

Sweetgreen (SG) is down more than -13% after cutting its full-year outlook and warning that diners are less willing to eat freshly prepared foods during the cyclospora outbreak. 

ResMed (RMD) is down more than -7% after reporting Q4 adjusted gross margin of 62.3%, below the consensus of 62.7%. 

Vistra (VST) is down more than -3% after reporting Q2 operating revenue of $4.02 billion, well below the consensus of $4.93 billion. 

Earnings Reports (8/7/2026)

Ascendis Pharma A/S (ASND), Freedom Holding Corp/NV (FRHC), Mobility Global Inc (MBGL), Oklo Inc (OKLO), PPL Corp (PPL), Take-Two Interactive Software (TTWO), Vistra Corp (VST).