Did earnings provide an entry point?

S&P 500 -0.17% to 7,723.55

US 10-year yield -0.2 basis points to 4.617%

Spot gold +4.16% to $4,245.40 an ounce

DXY -0.19% to 99.69

What to look out for today

Companies reporting on Thursday, 6 August: Airbnb, Akamai Technologies, ConocoPhillips, Fastenal, Fox, Keurig Dr Pepper, Molson Coors Beverage, Ralph Lauren, Sempra, Viatris, Warner Bros. Discovery

Key data to move markets today

EU: German Factory Orders, Eurozone Economic Bulletin and Retail Sales

USA: Initial and Continuing Jobless Claims, Challenger Job Cuts, Nonfarm Productivity, Unit Labour Costs and a speech by St Louis Fed President Alberto Musalem

CHINA: Exports, Imports and Trade Balance

Global Macro Updates

July ISM Services slightly below consensus. The July ISM Services index came in at 54.1, below consensus of 54.5, but slightly above June’s 54.0. New orders rose m/o/m to 57.2 from 55.1. The employment index fell to 47.4 from 51.2, returning to contraction after one month of expansion.

The prices index increased to 70.3 from 67.7, supplier deliveries fell to 52.8 from 54.4 and inventories edged up to 51.4 from 51.2.

Respondent commentary was modestly positive, with most sectors reporting stable or improving activity despite pockets of softness. Fuel, labour and broader input costs continued to rise, while construction firms cited mounting cost pressures and heavy discounting. Firms remained generally optimistic but highlighted uncertainty around inflation and the Iran war.

Final July S&P Global Services PMI rose to 54.6, above consensus of 54.0 and the prior reading of 53.6. Activity increased at the strongest pace since October 2025, while job creation was the strongest in eight months.

Input-cost inflation reached its fastest pace since May 2025, driven by tariffs and higher raw-material and fuel costs. Firms passed through these increases, pushing selling-price inflation to a 14-month high.

ECB underscores the economic drag of uncertainty. The ECB published a report highlighting the impact that uncertainty has had on eurozone growth following repeated large and multifaceted shocks in recent years. Periods of elevated uncertainty have been accompanied by weaker activity and, at times, outright contractions. The analysis showed that the effects are transmitted primarily through business investment, with private consumption playing a smaller role.

The ECB expects uncertainty linked to the Middle East conflict to continue weighing on activity throughout 2026. Households are likely to defer durable-goods purchases, while business investment remains the most uncertainty-sensitive component of aggregate demand. Tangible investment is particularly vulnerable, given its high upfront costs and long payback periods.

The research identified intangible investment as a potential mitigating factor that could become increasingly important over time. Spending on intangible assets is generally less sensitive to short-term uncertainty because it is often intended to improve efficiency, reduce costs and strengthen competitive advantages rather than generate immediate returns. The ECB cited AI-related technologies as one example.

The findings suggest the euro area economy could become more resilient to future shocks, even as elevated uncertainty weighs on near-term activity. The analysis is consistent with economic data having held up better than many expected since the Iran conflict began, despite heightened uncertainty.

US Stock Indices

Dow Jones Industrial Average +0.49%
Nasdaq 100 -0.83%
S&P 500 -0.17%, with 5 of the 11 sectors of the S&P 500 down

A fresh round of strong earnings reports lifted the Dow Jones Industrial Average to a new high on Wednesday, reinforcing the role of surging profits in supporting the stock-market rally.

Upbeat results from Amgen, Walt Disney and Merck helped push the blue-chip index +0.49%, or 263.24 points, to 54,349.12. The Dow has now risen for five consecutive sessions, posting three straight record closes in its strongest comparable run since Liberation Day.

Wednesday’s advance marked the Dow’s 24^th record of the year, one day after it delivered a second consecutive gain of more than 600 points, a feat it had achieved only once before.

Stocks lost momentum around midday following the morning rally, with the Nasdaq Composite retreating -0.83% on the day and the S&P 500 declining -0.17%.

In corporate news, Alphabet came under pressure after reports that Jeff Dean, the company’s chief scientist and its 30^th employee, along with three other high-profile researchers, would leave to launch Discovery Loop, an AI-focussed scientific-discovery startup. Separately, Demis Hassabis is stepping back from day-to-day leadership of DeepMind. Concerns over AI talent departures have weighed on Google in recent months, while the stock also faced pressure after Q2 results due to elevated CapEx and negative FCF dynamics.

Meta Platforms CEO Mark Zuckerberg announced the release of the company’s first AI coding agent, Muse Code, intensifying competition with OpenAI and Anthropic PBC.

Shake Shack shares rose after Starboard Value CEO Jeff Smith said the activist investment firm had built a stake in the burger chain. In a Wednesday interview with Bloomberg TV, Smith said the position was worth several hundred million dollars.

Microsoft’s latest disclosures indicate that OpenAI accounts for the majority of its AI revenue. The company reported $24.1 billion in sales from OpenAI for the fiscal year ended in June, representing more than half of Microsoft’s disclosed AI revenue and roughly 70% of its actual AI sales for the period.

Corporate Earnings Reports

Posted on Wednesday, 5 August from The Pulse, our real-time AI-driven news tool. Available exclusively on the EXANTE Web Platform

Eli Lilly reported Q2 revenue of $22.97bn (+48% y/y) and adjusted EPS of $8.38, both beating estimates. Mounjaro revenue was $9.94bn (+91% y/y) and Zepbound $4.93bn (+44% US y/y). The company raised its full-year revenue guidance to $85bn–$87bn and adjusted EPS to $35.50–$36.50. CEO David Ricks said: 'Lilly's momentum continues, as we delivered 48% revenue growth and raised our full-year guidance.' Additionally, olomorasib received FDA Breakthrough Therapy designation for KRAS G12C-mutant pancreatic cancer. Lilly and Resilience committed $750mn to expand US manufacturing of KwikPen devices. The company completed acquisitions of Orna, Ajax, Centessa, and Kelonia in Q2, and committed an extra $4.5bn to Indiana manufacturing.

Walt Disney reported fiscal Q3 results. Revenue was $25.2bn (+7% y/y, a $0.2bn miss vs. consensus). Adjusted EPS was $2.06 (+28% y/y, a $0.21 beat). The Experiences segment operating income surged +20% y/y to $3.0bn. Disney reaffirmed its full-year adj. EPS growth guidance of ~12% (excluding the 53rd week) and targeted at least $9bn in share repurchases in fiscal 2026. CEO Bob Iger said the strong Q3 and reiterated outlook reinforce confidence in Disney’s positioning. Separately, Hearst agreed to acquire Disney’s 50% stake in A+E Global Media for about $1.2bn.

Uber reported Q2 revenue of $14.19bn, slightly below the $14.24bn estimate, and EPS of $0.81, in line with consensus. Adj EBITDA was $2.82bn, beating the $2.79bn estimate. Gross bookings of $58bn exceeded the $57.1bn forecast. Q3 guidance set EPS at $0.84-$0.88, below the $0.89 estimate, and gross bookings of $58.25bn-$60.25bn, roughly in line. CEO Dara Khosrowshahi noted that trailing 12-month free cash flow exceeded $10bn for the first time. Uber plans to expand autonomous vehicle operations from 7 to 15 US cities by end-2026 and committed over $10bn to AVs. Uber and Wayve secured London robotaxi licences, and Uber invested an additional $250mn in Rivian. 

CVS Health reported Q2 2026 results that beat expectations, with adjusted EPS of $2.58 (est. $1.85) and revenue of $106.1bn (est. $99.97bn). Operating income rose +98% y/y to $4.7bn and net income reached $3.0bn (est. $2.36bn). The company raised its full-year adjusted EPS guidance to $7.90-$8.10 (est. $7.45) and lifted its minimum cash flow from operations forecast to at least $11.5bn. Segment revenue showed Health Services up +11.5% y/y at $51.8bn and Health Care Benefits up +3.5% y/y at $37.5bn, while Pharmacy & Consumer Wellness was flat at $33.8bn. The Medical Benefit Ratio improved 250 bps to 87.4%. Management noted a cautious view for the remainder of the year due to elevated cost trends and potential macro headwinds.

Western Digital reported Q4 FY2026 revenue of $3.75bn vs estimates of $3.68bn, up +44% y/y. Adjusted EPS was $3.56 vs $3.31 expected, up +109% y/y. Gross margin was 54.4%, operating margin 44.2% and free cash flow $1.3bn. For Q1 FY2027, the company guided revenue of $4.0bn-$4.2bn (vs est $4.02bn) and adjusted EPS of $3.85-$4.15 (vs est $3.83). The CEO cited further margin expansion and strong free cash flow generation.

eBay reported Q2 earnings that beat consensus: revenue of $3.13bn (up +15% y/y) vs $3.02bn expected, adjusted EPS from continuing operations of $1.60 vs $1.51, gross merchandise volume of $22.4bn vs $21.57bn, and 136mn active buyers vs 135.9mn. The company guided Q3 revenue to $3.07bn–$3.12bn (est $2.97bn) and adjusted EPS to $1.36–$1.42 (est $1.44). Management raised the full-year outlook, with CEO Jamie Iannone noting 'strong momentum' as the rationale.

European Stock Indices

CAC 40 +0.03%
DAX -0.29%
FTSE 100 +0.08%

Commodities

Gold spot +4.16% to $4,245.40 an ounce
Silver spot +4.00% to $62.02 an ounce
West Texas Intermediate -1.21% to $75.06 a barrel
Brent crude +0.86% to $79.42 a barrel

Gold prices rose on Wednesday, as anticipation towards a peace deal between Washington and Tehran increased, easing concerns of a higher for longer energy inflationary impulse.

Spot gold rose +4.16% to $4,245.40 an ounce. It was its biggest daily gain since February.

Spot silver prices traded +4.00% higher to $62.02 per ounce.

Brent was slightly higher, while WTI settled lower for a third consecutive session as the market continued to await indications of a possible agreement between the US and Iran. Early strength followed comments from Yemen’s Houthis, who said they had launched a missile attack on a Saudi oil tanker in the Red Sea near the KSA port of Yanbu.

Brent crude futures rose 68 cents per barrel, or +0.86%, to settle at $79.42 per barrel, the lowest level since 13 July. WTI futures settled down 92 cents per barrel, or -1.21%, at $75.06 per barrel, also a three-week low.

Reports indicated that the Iranian - Omani proposal under negotiation to reopen the Strait of Hormuz would impose no tolls or service fees on vessels transiting the waterway. Other reports suggested Iran continued to insist that the US adhere to the agreed terms of the MOU, along with additional requirements. Iran’s deputy foreign minister acknowledged that Tehran was receiving messages from the US, while Iranian state television later cited the president as saying that communication with the country’s supreme leader is ‘currently very difficult.’

Yemen’s Houthis threatened to expand attacks on KSA tankers in the Red Sea. They targeted a Saudi tanker near Yanbu, bringing the number of Saudi ships targeted since 22 July to eight. The group later said it had targeted the Saudi oil tanker Daisy in the Gulf of Aden, a headline that helped lift WTI and Brent from session lows in the final 40 minutes of trading.

The DOE Weekly Petroleum Status Report showed crude stockpiles rose by 2.48 million barrels last week, led by a 2.7 million-barrel build in PADD 2 as Cushing inventories moved firmly above operationally critical levels.

On the product side, jet fuel stocks were broadly unchanged, while gasoline and distillate inventories drew by 1.64 million and 3.47 million barrels, respectively. Jet fuel production remained above 2.0 million bpd for a 14^th consecutive week, while distillate exports reached a record 1.884 million bpd.

Crude exports rose slightly w/o/w to 3.685 million bpd and are expected to increase notably in the coming weeks. The Strategic Petroleum Reserve will remain in focus as inventories approach levels that some market participants believe could affect operations.

Ukrainian attacks on Russian refineries continued. Reuters reported that Belarussian gasoline and diesel exports to Russia reached record levels last month.

China appeared comfortable with domestic product stockpile levels, with Beijing further easing refined-fuel export limits for a second consecutive month in August.

Saudi Aramco’s September Official Selling Prices (OSP) had not yet been released; they are typically published on the fifth day of the month. 

Note: As of 4 pm EDT 5 August 2026

Currencies

EUR +0.21% to $1.1552
GBP +0.10% to $1.3458
Bitcoin +0.81% to $64,682.68
Ethereum +0.91% to $1,906.96

The Japanese yen steadied on Wednesday following a historic intervention, while the dollar remained near six-week lows against major peers.

The yen was marginally firmer at ¥157.69 per dollar, up +0.01% on the day, after appreciating to ¥155.20 on Monday from ¥163.87 on 28 July, its weakest level in 40 years.

US Treasury Secretary Scott Bessent said on Tuesday that the US would do ‘whatever it takes’ to support Japan’s efforts to stabilise the yen, echoing former ECB President Mario Draghi’s 2012 pledge to preserve the euro during the regional debt crisis.

The dollar fell to its lowest level against the Japanese currency in three months after joint purchases by Tokyo and Washington on Friday. It was the first yen-buying intervention by US authorities since 1998.

Although intervention can slow the pace of depreciation, history suggests it rarely alters the longer-term trend unless underlying fundamentals also shift.

The dollar index was down -0.19% at 99.69 after touching a six-week low on Monday.

The euro rose +0.21% to $1.1552, while sterling edged up +0.10% to $1.3458.

Fixed Income

US 10-year Treasury -0.2 basis points to 4.617%
German 10-year Bund -0.0 bps to 3.133%
UK 10-year Gilt -0.7 basis points to 4.895%

US Treasury yields declined on Wednesday as traders focussed on incoming economic data ahead of Friday’s July employment report.

The 2-year note yield, which typically tracks Fed funds rate expectations, fell -1.4 bps to 4.192%, its lowest level since 20 July.

The US 10-year yield slipped -0.2 bps to 4.617%.

The 2s10s curve steepened by 1.2 bps to 42.5 bps.

According to the CME Fedwatch tool, Fed funds futures priced a 54.9% probability of a rate hike at the Fed’s September meeting, down from 57.1% a week ago.

Concerns over a potential increase in longer-dated debt supply also eased after the Treasury Department said it would keep coupon issuance and floating-rate note issuance unchanged for at least the next several quarters.

The Treasury added that it continues to evaluate possible future changes to coupon and floating-rate auction sizes. This was a shift from its May refunding statement, which had pointed to potential increases in debt sales.

Germany’s 10-year government bond yield declined for a third consecutive day on Wednesday.

The German 10-year yield was unchanged on the day at 3.133%, after earlier touching 3.089%, its lowest level since 15 July.

The ECB became the first major central bank to tighten policy since the start of the war in February, but it kept rates on hold last month, signalling that it needed more time to assess the impact of the energy-price shock.

Policymakers continue to monitor second-round effects, where higher energy prices feed into wages and broader goods and services costs, making inflation more persistent.

Futures markets now price roughly 35 bps of ECB tightening by year-end, implying one additional 25 bps hike and about a 40% probability of a second move.

Germany’s 2-year yield, which is sensitive to ECB deposit-rate expectations, rose +6.6 bps to 2.794% on Wednesday.

Note: As of 4 pm EDT 5 August 2026

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