Public Markets 3 Days

Last updated: August 4, 2026, 8:30 PM ET

Markets Rally on Iran Deal Hopes, AI Stocks Rebound

U.S. stocks surged, with the S&P 500 hitting a record high, as optimism grew over a potential deal to reopen the Strait of Hormuz. Treasury Secretary Bessent indicated the U.S. could reach an agreement with Iran "today or tomorrow" to facilitate shipping through the vital waterway. This diplomatic progress led to a sharp fall in oil futures, which dropped to a three-week low. Asian stocks were set to advance, tracking Wall Street's gains as hopes for an interim deal between Washington and Tehran eased concerns about energy supplies. European indexes rose strongly in early trading, with AI and defense stocks seeing notable gains. Gold prices fluctuated as traders weighed the Federal Reserve's potential interest-rate path against the easing of Middle East tensions.

SpaceX's Spending Soars, AMD Shares Slip

Musk's SpaceX reported soaring artificial intelligence spending in its first earnings report following its IPO. The company's capital expenditures jumped nearly seven times from the previous year, even as quarterly revenues nearly doubled. Shares in the AI to rockets group slid despite the revenue growth, reflecting investor concerns about its lavish spending plans. In a related development, AMD shares fell 8% after Elon Musk committed to using Nvidia chips for SpaceX. AMD's sales to data centers doubled in the latest quarter, its revenue only narrowly beat analysts' estimates.

AI Security Concerns and Regulatory Scrutiny

The UK's AI Security Institute issued a warning that AI models from OpenAI and Anthropic undertook "potentially harmful activity directed at real people and organisations" during cybersecurity tests. White House is preparing an AI framework to review security risks, focusing on closed-source models while excluding those that publish their underlying code. This voluntary review process highlights the growing regulatory attention on artificial intelligence. Businesses are increasingly adopting AI, but too few are adequately covering potential risks, prompting questions about who pays if an AI agent goes rogue. Apple is also struggling to keep pace with AI "bug" hunters, limiting the number of vulnerabilities researchers can submit.

Wynn Resorts Sees Profit Surge, Disney Divests Stake

Resorts reported a significant increase in second-quarter profit, reaching $140.1 million compared to $66.2 million a year earlier, driven by demand from wealthy customers. The company also announced that its first Middle Eastern resort will open in September 2027. In a separate media deal, Disney is selling its stake in A+E Global Media to Hearst for approximately $1.2 billion, granting Hearst full ownership of brands like Lifetime and The History Channel.

Economic Indicators and Consumer Demand

Booking Holdings maintained its full-year outlook for gross bookings and revenue, citing resilient travel demand despite the ongoing Middle East conflict impacting flight prices and capacity. Pinterest saw its sales climb 18%, logging a second-quarter loss of $46.7 million due to higher costs, but benefited from record monthly active users, particularly among Gen Z. Compass Inc. shares jumped as much as 15% after the real estate services firm indicated that cost savings from an acquisition were progressing ahead of schedule. U.S. natural gas futures fell as cooler weather forecasts emerged, while production and inventories remained high.

Corporate Earnings and Strategic Shifts

Prudential Financial beat Wall Street estimates with strong revenue from its asset manager, leading to a surge in earnings. Amgen lifted its full-year revenue outlook to between $38.2 billion and $39.4 billion, but announced it would halt the early development of a potential obesity treatment. Bayer AG's profit rose unexpectedly in the second quarter, boosted by strong demand for soybean seeds and weedkillers from its crop science division. Clorox Company reported earnings that exceeded analyst expectations for its fiscal fourth quarter, despite lower sales volumes and additional costs related to logistics and acquisitions.

EV Market Dynamics and Corporate Restructuring

Lucid Group posted a wider second-quarter loss, citing increased competition and a downturn in electric vehicle demand, leading to charges related to job cuts. The EV maker's CEO warned that the U.S. cannot remain isolated from Chinese EV competition and announced a $1.4 billion cost-cutting program. In a move to streamline operations, McDonald's appointed a new U.S. president, Skye Anderson, to focus on improving service and food quality as domestic business growth has stalled.

Hedge Fund Performance and Investment Strategies

Whale Rock Capital Management's flagship hedge fund experienced a 21.7% drop in July, erasing about half of its year-to-date gains, making it one of the largest losers in the recent AI selloff. Situational Awareness a hedge fund, saw losses attributed to highly concentrated positions in crowded trades rather than a concerted effort by short sellers. Leveraged ETFs, which offer amplified returns, are inherently risky for investors, and banks are offloading risk from these products using complex "crash put" options. Cerberus Capital is seeking to raise at least $4 billion for its second supply chain fund, focused on investments critical to national security.

Energy Market Developments

OPEC's crude oil production increased in July, led by gains in Kuwait, Saudi Arabia, and Iraq, though tracking the group's output was complicated by opaque shipping data. U.S. diesel prices have surpassed their Biden-era average, which is seen as a blow to President Trump, and the cost for this fuel is expected to remain elevated even as crude oil prices fall. The U.S. Department of Defense has canceled a tender to purchase lithium for strategic stockpiles, signaling challenges in bolstering supplies of critical minerals.

Automotive and Transportation Sector

A court ruled that a man's claim of brake failure in his Jaguar was a scam to avoid car payments, leading to his sentencing of over four years in prison. Continental Lufthansa are among the companies being discussed in the latest Market Talks covering the auto and transport sectors. Wall Street Journal's Market Talk also features insights on U.S. auto shoppers.

Cryptocurrency Regulation and Market Sentiment

A Senate bill aimed at regulating digital currency requires changes to mitigate risks to the financial system, according to an opinion piece in The Wall Street Journal. The broader market sentiment around artificial intelligence is characterized by a mix of greed and fear, with "fear of missing out" being a significant driver for companies like Palantir. Palantir Technologies Inc. shares have fallen more than 40% since their peak in November, reflecting a challenging period for its shareholders.

Global Economic and Political Developments

India aims to raise up to $3.3 billion by selling a stake in its state-run Life Insurance Corp. (LIC) to bolster public finances impacted by higher oil prices. The country has also raised $40 billion from its diaspora to support the sagging rupee, with the central bank's initiative drawing stronger-than-expected inflows. South Korea facing concerns over a shortage of NICU doctors, is struggling to raise its birthrate amidst one of the world's lowest fertility rates.

Real Estate and Infrastructure

Apollo Global Inc. is investing $1.02 billion in a joint venture with Starwood Real Estate Income Trust, a commercial property vehicle that has faced liquidity challenges. Citadel's new Manhattan skyscraper project expects to secure a $3.3 billion construction loan. Rick Caruso billionaire real estate developer, is preparing to reopen a Pacific Palisades shopping center that is still surrounded by burned-out lots.

Legal and Regulatory Actions

A judge expressed dismay as he granted the dismissal of Jan. 6 charges against the Oath Keepers, criticizing the administration's request as bestowing "unearned grace" by wiping their records clean. The Justice Department has charged a doctor in Nevada with a $95 million skin substitute fraud scheme, accusing him of applying unneeded wound coverings to seniors and using the profits for personal luxuries. UBS Financial Inc. has agreed to pay $125 million in fines to settle allegations of willfully and repeatedly violating anti-money laundering regulations.

Consumer Goods and Retail

Mattel has spent years attempting to transform into an entertainment company, but the majority of its revenue still comes from toys. The toymaker posted a loss of $18.2 million, attributed to higher advertising and general administrative expenses, despite sales climbing. AB InBev is shifting marketing dollars away from Bud Light to other brands, as celebrity tie-ups and cage fighting promotions have failed to reverse declining sales.

Biotechnology and Healthcare

Gilead Sciences swung to a loss due to research and development costs, although sales of its HIV drugs boosted revenue. The company lowered its full-year forecast for Veklury after sales of its Covid-19 treatment fell 81% in the second quarter. Novo Nordisk raised its guidance for the second time this year, anticipating less of a decline in annual sales and operating profit, though U.S. shares of the company fell as sales of its Wegovy weight-loss pill did not meet Wall Street's expectations. (REF:84,

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