Ed Yardeni, economist and the president of Yardeni Research, said that his year-end S&P 500 target of 8,250 now appears increasingly conservative, with the index only about 6.5% away, highlighting a “fabulous earnings momentum.”
- On Monday, all benchmark indexes closed significantly higher, with the Dow Jones Industrial Average and S&P 500 notching record highs at close.
- U.S. Treasury Secretary Scott Bessent said an agreement to reopen the vital shipping route could be reached by Tuesday or Wednesday.
- Global oil prices were declining at the time of writing.
U.S. stock futures were trading higher in the overnight session late Tuesday as a strong earnings rally, coupled with a perceived easing in geopolitical tensions in the Strait of Hormuz, boosted investor sentiment.
Meanwhile, Ed Yardeni, economist and the president of Yardeni Research, said in an interview with CNBC that his year-end S&P 500 target of 8,250 now appears increasingly conservative, with the index only about 6.5% away, highlighting a “fabulous earnings momentum.”
“That’s really what it all comes down to. I mean, we’ve got plenty of things to worry about in the Middle East, with the Fed, and yet the economy continues to perform extremely well. It’s resilient. And we’re seeing that in earnings,” he said.
Dow futures were up 0.35%, S&P 500 futures gained 0.31%, while Nasdaq-100 futures were up about 0.3% at 11:07 PM EDT.
On Monday, all benchmark indexes closed significantly higher, with the Dow Jones Industrial Average and S&P 500 notching record highs at close.
The Dow surged 1.71% higher, jumping to a record high for a second consecutive session. The S&P 500 and the Nasdaq Composite also gained, closing up 1.79% and 2.59% higher, respectively.
| Index | Move | Close |
| Dow Jones Industrial Average | 1.71% | 54,085.88 |
| S&P 500 | 1.79% | 7,736.52 |
| Nasdaq Composite | 2.59% | 26,584.99 |
What’s Driving US Markets?
U.S. futures are reacting to a strong earnings rally, especially from AI and technology companies.
Caterpillar Inc. (CAT) closed up nearly 6% higher and continued to climb overnight after a blowout quarter amid its ongoing AI buildout. Palantir Technologies (PLTR) extended its rally, jumping nearly 30% on the heels of its quarterly print from Monday, when it posted a 93% surge in revenues.
McDonald’s Corp. (MCD), Advanced Micro Devices Inc. (AMD), and Paramount Skydance Corp. (PSKY) were among other companies that posted their quarterly results on Tuesday.
“Quarterly corporate earnings can serve as a vital check and complement to macroeconomic data. That’s true for this earnings season, where over 80% of reporting companies have beaten expectations, reinforcing the narrative of an impressively resilient US economy,” Mohamed El-Erian, Chief Economic Advisor at Allianz, said in a post on X.
Meanwhile, the semiconductor sector also posted strong returns, with the VanEck Semiconductor ETF (SMH) rising more than 5% at close and iShares Semiconductor ETF (SOXX) surging nearly 7% amid gains from top companies. The broader Vanguard Information Technology ETF (VGT) added more than 4%.
Yardeni noted in the interview that he had earlier pointed out how some semiconductor stocks were cheap, and that the overall information technology sector was trading at the same multiple as the overall market.
“And that’s unusual because growth stocks usually trade much higher. And when you look at the S&P 500 and information technology, it looks nothing like what we had back in 1999 and 2000. So all of a sudden, all this talk about this being a tech bubble is kind of thrown out the window,” he added.
On the geopolitical front, Iran’s Foreign Ministry spokesman Esmaeil Baghaei said talks with Oman on establishing safe transit lanes through the Strait of Hormuz were progressing positively.
Meanwhile, U.S. Treasury Secretary Scott Bessent said an agreement to reopen the vital shipping route could be reached “today or tomorrow,” while Secretary of State Marco Rubio said negotiations had advanced, but a final deal had yet to be finalized.
Global oil prices were declining at the time of writing. Brent crude futures expiring in October were down more than 1% to $78.50 a barrel. Meanwhile, WTI crude futures expiring in September were trading at $74.65 per barrel, down nearly 1.5% at the time of writing.
On the economic front, July’s monthly jobs report expected on Friday will be among the key releases for markets.
Trending Stocks To Watch
SpaceX (SPCX), Nvidia Corp. (NVDA): Elon Musk’s aerospace company was in focus on Tuesday amid its second-quarter (Q2) earnings results. The company reported $7.8 billion in Q2 revenue, up 92% year-over-year, and net loss narrowed to $0.09 per share. SpaceX also announced an exclusive partnership with Nvidia and outlined plans to build ground-based infrastructure for a full-fledged mobile service.
Advanced Micro Devices Inc. (AMD): Shares of the chipmaker declined more than 8% in overnight trading despite a narrow Q2 beat after the company reported a sharp increase in capital expenditures. Investor sentiment was also pressured by SpaceX’s announcement that it would transition from AMD to Nvidia for future AI chip purchases.
Palantir Technologies Inc. (PLTR): The company jumped onto the retail radar after its shares climbed more than 29%, the steepest surge in over two years, on extended earnings momentum.
Other Market Trends
Yields on the 10-year Treasury were at 4.599% at the time of writing, while spot gold prices declined to $4,071.96 per ounce.
Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Invesco QQQ Trust (QQQ) all edged higher at the time of writing.
The iShares 20+ Year Treasury Bond ETF (TLT) was also up 0.45% amid ‘extremely bullish’ sentiment.
Asian markets were trading higher on Wednesday. South Korea’s KOSPI, Japan’s Nikkei 225, China’s SSE Composite and Australian stocks were all gaining at the time of writing.
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