MARKET WRAP

Equities bounced back today, reversing Friday’s selloff with a broad-based rally lead by tech and a big recovery in small caps. Today’s bounce erased Friday’s losses but is still another similar performance away from recapturing the highs made mid last week. On the Day: SPX +1.5%, QQQ +1.9% and IWM +2.1%

Elsewhere, the US10YY was slightly lower and now just below 4.20%. Oil was also lower with Gold higher and DXY back below $99. In a nutshell, stocks erased Friday’s move, but other assets didn’t at all.

Notable Gainers: NVDA +3.6%, MSFT +2.2%, DIS +2.4%, MSTR +6.1%, SHOP +5.6%, DASH +3.9%, CEG +4.1%

Notable Losers: ON -16%, BRK.B -2.9%, ADBE -2.6%, AMZN -1.5%

After hours: PLTR is higher by about +5% on earnings, HIMS is down sharply -10%.

• MRKT Call: Discussing Friday’s sell-off and today’s bounce with Carter Worth, and the current strength and weakness within the context of the rally overall. Plus, a look at Berkshire’s recent price action and what may be the root cause.

• RiskReversal Pod: Recapping last week’s job data, some surprise tariffs, and wether recent developments put stagflation in play. What’s next for the Federal Reserve and interest rate cuts. Plus, a look back at earnings reports from Microsoft, Meta, and Amazon, and previewing Palantir, Disney, and McDonalds this week.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow rallies 500 points, clawing back all of Friday’s weak jobs report rout (CNBC)

• Analysts Increasing EPS Estimates Slightly for S&P 500 Companies for Q3 (FactSet)

• Trump to Name New Fed Governor, Jobs Data Head in Coming Days (Bloomberg)

• American Consumers Are Getting Thrifty Again (WSJ)

• Cash Windfall From Trump’s Tax Law Is Starting to Show Up at Big Companies (WSJ)

• China Is Choking Supply of Critical Minerals to Western Defense Companies (WSJ)

• Why Big Tech’s Cloud Shift Threatens Microsoft and Google’s Margins (The Information)

• Tesla Approves $30 Billion Stock Award for CEO Elon Musk (Bloomberg)

WHAT’S NEXT?

In yesterday’s weekly preview, we asked whether last week marked a real vibe shift (maybe signaling some buyer exhaustion), or was just another brief bout of volatility that would see dip-buyers step right back in. For today, the answer was pretty clear. Dip buyers wasted no time getting back in from the jump, with some names like NVDA getting very near to last week’s highs.

Volatility compressed rapidly on today’s rally, with the VIX falling back below 18 — still a bit elevated compared to a week ago, but well off the highs from Friday mid day. Tomorrow’s SPX expected move is below 0.5%, a steep compression from Friday as well. With this week’s macro calendar on the lighter side and the worst of the tariff-deadline news risk somewhat past (at least for now), a follow through rally tomorrow and a continued news vacuum could bring vol down even further, adding a bit more fuel to the bounce over the coming days.

However, one odd thing about today’s bounce is the market was technically already near-term oversold according to a number of metrics. An odd situation considering the market is still near highs after a monster rally, but having a lot to do with how low volatility got last week before the selling. Therefore, keep an eye out for any sort of reversal lower tomorrow (a failure below last week’s highs) as that would not only catch today’s dip buyers offsides, it would spike the VIX back towards 20, possibly accelerate intraday selling and paint today’s bounce as a near term oversold bounce, which wouldn’t be great overall.

For tomorrow, a plethora of earnings across sectors including PFE, CAT in the morning, with AMD and SNAP after the close. Updated expected moves below:

• Tuesday, August 5th

  • Pre-market: PFE 4%, CAT 4%, BP 3.5%

  • 10am - ISM Services PMI (Jul)

  • After-hours: AMD 7.5%, SMCI 11%, SNAP 15%, RIVN 9.5%, OPEN 22%

• SPX Expected Move: 0.5%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Are We Buying the Bounce?

Discussing Friday’s sell-off and today’s bounce with Carter Worth, and the current strength and weakness within the context of the rally overall. Plus, a look at Berkshire’s recent price action and what may be the root cause.

• Analysis - SPX, SPY, RSP, AAPL, AMZN, DXY, PANW, UPS, BRK.A, PRG, CB, AFL, KIE, ENPH, GLW

• Your Questions:

  • WAVY MCFLY - Gold stocks, champagne time?

  • Gary Webb - PLTR expected ‘25 rev 4b, ‘26 5.2b, make it make sense?

  • CR Taylor - GLW one of the safer AI plays?

  • Chris L - Thoughts on ENPH for a trade?

Learn more about our sponsor, MoneyLion.

Watch RiskReversal Podcast’s newest episode: Careful What You Wish For: "Screwflation" Risks Ahead

Dan Nathan and Guy Adami recap last week’s job data, some surprise tariffs, and wether recent developments put stagflation in play. What’s next for the Federal Reserve and interest rate cuts. Plus, a look back at earnings reports from Microsoft, Meta, and Amazon, and previewing Palantir, Disney, and McDonalds this week.

Learn more about our sponsor CME Group, iConnections, and SoFi.

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