Records with cracks underneath: breadth carried the tape to new highs even as the Dow slipped and a handful of AI bellwethers got hit on earnings.
The S&P 500 pushed to an intraday record near 7,817 and closed at fresh highs after a flat July PPI print reinforced yesterday's cooler CPI, pulling priced odds of a September Fed hike back under 40%. Advancers beat decliners nearly 2-to-1 with 28 new highs against a single new low, and the Russell 2000 punched to a fresh record above 3,060, up over 23% year-to-date — the kind of broadening that keeps this rally credible beyond mega-cap tech. VIX eased back toward 14.5, signaling limited urgency for downside hedges into the print.
Leadership was uneven inside tech: Meta, Micron and Netflix carried the Nasdaq higher on CoreWeave-driven AI optimism, while Cisco, Cerebras and Applied Materials sold off hard on earnings, capping the Dow. Oil fell over 2% on both benchmarks even as the U.S.-Iran conflict grinds on and Tehran claims control of the Strait of Hormuz — a disconnect the desk is watching closely. A soft 30-year auction priced at the richest yield in a quarter century, a reminder that duration supply remains a swing factor for risk appetite.
The risk: a Hormuz escalation that reprices oil higher fast, undercutting the soft-inflation narrative and pushing Fed-hike odds back up before Friday's Michigan sentiment print gets a fair read. Tape is priced for calm; any shock to that assumption gets amplified by how stretched breadth already is near record highs.