Bulls get late bounce

An up-and-down July for stocks ended in appropriately choppy fashion, as high-profile earnings, a Fed meeting, volatile semiconductor and oil prices, and rising Treasury yields left most of the major indexes with gains for the week, but small losses for the month.

Despite closing at its lowest level in more than a month last Wednesday, the S&P 500 (SPX) bounced to end the week in positive territory, although the rally came up just short pushing the index into the black for July:

The headline: July ends on a volatile, but positive note.

The fine print: Last week’s Mag-7 stocks were evenly split between post-earnings rallies (Microsoft and Amazon) and sell-offs (Meta and Apple). The concerns about accelerating AI spending that appeared to weigh on Alphabet (GOOGL) a week earlier didn’t play out in Microsoft or Amazon, but they arguably played a role in Meta’s decline.

The number: 38.2%. Last Wednesday the PHLX Semiconductor Index (SOX) bounced after retracing 38.2% of its 311% April 2025-June 2026 rally.

The scorecard: The indexes with the weakest year-to-date returns were the best performers last week:

S&P 500 sector returns: The strongest S&P 500 sectors last week were consumer discretionary (+8.3%), communication services (+5.4%), and consumer staples (+1.2%). The weakest sectors were utilities (-4.2%), real estate (-2.2%), and materials (-1.7%).

S&P 500 stock movers: Last week’s biggest gains were Cognizant (CTSH) +22% to $55.35, Microsoft (MSFT) +22% to $464.72, Garmin (GRMN) +21% to $293.78. The biggest losses were Lennox (LII) -23% to $415.88, C.H. Robinson (CHRW) -21% to $147.73, Vertiv (VRT) -17% to $241.57.

Yields and the dollar: The 10-year US Treasury yield ended last week up 0.03% at 4.71%—its highest level since January 14, 2025. The US Dollar Index (DXY) fell 1.56 to 99.91, partly because of US efforts to help Japan strengthen the yen.

Commodity futures: After falling more than $11 last Monday-Tuesday, September WTI crude oil (CLU6) rallied to ended the week down just $4.64 at $84.67. December gold (GCZ6) slipped $22.70 to $4,107. Biggest gains: September orange juice (OJU6) +9.3%, December coffee (CCZ6) +5.6%. Biggest declines: November canola (RSX6) -8.1%, December soybean oil (ZLZ6) -7.1%.

Crypto: Bitcoin -2% to $62,813.75 last week, Ethereum +0.01% to $1,860.35.

Coming this week

This week’s economic calendar is all about the labor market:

●Monday: ISM Manufacturing Index, Construction Spending
●Tuesday: Balance of Trade, Job Openings and Labor Turnover Survey (JOLTS), Factory Orders, Vehicle Sales
●Wednesday: ADP Private Employment, ISM Services Index
●Thursday: job cuts, Productivity and Labor Costs, Wholesale Inventories
●Friday: Employment Report, Consumer Inflation Expectations

The busiest week of earnings season is heavy on AI infrastructure stocks (including semiconductors), big oil—and plenty of everything else. Here’s a sample of the more than 1,500 companies scheduled to release their numbers:

●Monday: BP (BP), Clorox (CLX), ON Semiconductor (ON), Palantir (PLTR), Silicon Laboratories (SLAB), Tyson Foods (TSN), Ultra Clean Holdings (UCTT), Vertex Pharmaceuticals (VRTX), ViaSat (VSAT)
●Tuesday: Advanced Micro Devices (AMD), Arista Networks (ANET), Bed Bath & Beyond (BBBY), Booking Holdings (BKNG), Caterpillar (CAT), Exact Sciences (EXAS), Kimberly Clark (KMB), Lattice Semiconductor (LSCC), Mattel (MAT), McDonald's (MCD), Merck (MRK), Pfizer (PFE), Rockwell Automation (ROK), Spotify (SPOT), Sunoco (SUN), Turning Point Brands (TPB), Wynn Resorts (WYNN)
●Wednesday: Allstate (ALL), Applovin’ (APP), CVS (CVS), Walt Disney (DIS), E.L.F. Beauty (ELF), Kraft Heinz (KHC), Murphy Oil (MUR), Nebius (NBIS), Phillips 66 (PSX), Shopify (SHOP), Sandisk (SNDK), Warner Bros. Discovery (WBD), Western Digital (WDC)
●Thursday: ConocoPhillips (COP), Dropbox (DBX), Datadog (DDOG), Keurig Dr. Pepper (KDP), MP Materials (MP), Cloudflare (NET), Ralph Lauren (RL), Molson Coors Beverage (TAP)
●Friday: Bayer (BAYRY), Novo Nordisk (NVO), Spectrum Brands(SPB), Wendy's (WEN)

August stock market performance

Since 1957, the SPX has had a positive return in August 40 times vs. a negative return 20 times. However, it’s never been a consistently above-average month, either in terms of its typical return or frequency of positive returns, especially over the past 35 years:

Since 1991, August was a positive month less often (20 of 35 years) than any other month but September, and the SPX’s 0.5% median August return was the third-lowest of all months during that period. Similarly, since 1995, the median August decline (-4.2%) was twice the size of the median gain (2.1%).¹

However, July was an “inside month”—that is, the SPX traded within the high-low range of June. Tomorrow’s commentary will discuss some of the potentially interesting implications of that development.

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² All figures reflect S&P 500 monthly closing prices, 1957-2025. Supporting document available upon request.