Stocks Wane After Strong End to July

All three major indexes ended July with monthly wins

Deputy Editor
Aug 4, 2023 at 1:16 PM
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To start the week, all three major indexes closed July with monthly wins, with the S&P 500 Index (SPX) and Nasdaq Composite Index (IXIC) logging their fifth-straight months of gains. Notably, the Dow Jones Industrial Average (DJI) only finished four sessions lower the entire month. As soon as August hit, however, the strong sentiment waned, particularly after Fitch cut its U.S. credit rating to AA+ in the middle of the week, after which the Dow marked its worst day in over a month. Plus, Wall Street's "fear gauge," the Cboe Volatility Index (VIX) reached a multi-month peak. At this point, the market is headed for a weekly loss, despite rising on Friday. 

Tech in Focus

Earnings reports from Big Tech giants Apple (AAPL) and Amazon.com (AMZN) highlighted the end of the week. AMZN surged after its upbeat second-quarter report and current-quarter forecast, after which analysts flooded the equity with bull notes, including Rosenblatt with an upgrade to "buy." AAPL, on the other hand, fell despite a strong fiscal third-quarter report, after lackluster iPhone sales. In other tech news this week, semiconductor stocks Qualcomm (QCOM) and Advanced Micro Devices (AMD) announced their quarterly results as well, with the former seeing a bearish options surge, and the latter a bullish. 

Earnings Season in Full Swing 

Aside from tech, a flood of notable corporate earnings washed in this week, including a report from blue-chip heavy machinery name Caterpillar (CAT). CAT jumped to record highs after its second-quarter results beat estimates, even after the company issued a warning for the current quarter. Yelp (YELP) hit a five-year high after its report and subsequent bull notes, while Moderna (MRNA), on the other hand, hit post-earnings two-year low before flipping higher. Elsewhere, analysts and options traders targeted Starbucks (SBUX) and SolarEdge Technologies (SEDG) following their reports as well. 

What's On Tap Next Week

The flood of earnings reports will continue next week as well, though economic data will be fairly sparse until inflation data on Thursday and Friday. In the meantime, see what Schaeffer's Senior Vice President of Research Todd Salamone and Senior Quantitative Analyst Rocky White have to say about last week's bearish outside day. 

 

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