August 3rd Market Overview

Happy Monday

We opened August with big tech back in front and oil giving back a chunk of its war premium. Both trace to the same weekend, when Trump called off a strike on Iran and said talks start today.
The hedge fund that got liquidated in last week's AI unwind is done selling, so those names finally traded a session without a forced seller in the tape/volume.

Let’s dig in...

Today's Big Picture

1. Iran Talks Pull Oil Lower

Trump paused planned strikes and said talks begin today. Brent came back toward $84 and West Texas slipped under $80. The traffic tells a slower story than the price does. Ship tracker Kpler counted nine transits through the Strait of Hormuz on Sunday, roughly a tenth of the pre-war pace, and a gas carrier was hit on Friday.

2. Amazon Reaches $3 Trillion

Amazon $AMZN crossed $3 trillion in market value for the first time, the fifth company ever to get there. Its cloud unit grew at the fastest pace in eighteen quarters. Management raised this year's capital spending to $220 billion and blamed memory prices. Investors sold Meta for spending like that a week ago and bought Amazon for it, and the difference was AWS.

3. Factories Post Their Best Month In Four Years

July manufacturing came in at 55.6, the strongest since May 2022 and ahead of the 54 economists expected. Factory hiring grew for the first time in thirty-three months. Prices paid eased slightly but stayed high. One purchasing manager described customers pulling orders forward to beat expected price increases, which flatters the number a little.

Market Overview

Index Performance

Stock Spotlight

Alibaba $BABA ( ▲ 4.31% )  
released its Qwen3.8-Max model and said open weights go out next week. DeepSeek put a new model into beta on Friday. China's labs are shipping on a fast clock.

Apple $AAPL ( ▼ 1.28% )  
was the only Magnificent Seven name lower today. Four straight down sessions have taken about $500 billion off its market value and pushed it to third place by size.

Marriott $MAR ( ▼ 6.93% )  
beat on adjusted earnings and missed on revenue. Middle East room revenue fell by nearly half, the clearest read yet on what the war is doing to travel. The company still raised full-year earnings guidance.

AMC Entertainment $AMC ( ▲ 1.42% )  
got a real weekend from "Spider-Man: Brand New Day," which opened to $355 million.

Big Name Updates

AstraZeneca $AZN ( ▼ 5.98% )  
is in talks to merge with Bristol Myers Squibb in a deal that would create a roughly $400 billion drugmaker, per the Financial Times. AstraZeneca fell in London, which is usually the market telling you who it thinks is writing the check.

Shell $SHEL ( ▼ 0.97% )  
sold its European onshore renewables portfolio to TotalEnergies, covering projects in the UK, Italy, Spain and the Netherlands. It comes days after Shell posted its best quarter in four years.

BP $BP ( ▼ 2.27% )  
closed the sale of its Gelsenkirchen refinery to Klesch Group and expects about $1 billion less in operating costs. Both majors are trimming back to oil and gas.

Strategy $MSTR ( ▲ 2.16% )  
sold 1,638 bitcoin for $104.7 million to fund preferred dividends and buybacks. It still holds 842,138 coins.

Other Notable Company News

Micron $MU ( ▲ 0.73% )  
U and the rest of the chip names sat out the rally. The money went to the companies buying chips, not the ones making them.

ArcelorMittal $MT ( ▲ 2.26% )  
expanded its technology deal with Microsoft, putting plant upgrades on Azure.

GameStop $GME ( ▼ 14.25% )
is exchanging $1.4 billion of convertible notes for stock, which adds to the share count.

Toyota $TM ( ▼ 1.37% )  
reports this week, with analysts looking for a fifth straight quarterly profit decline on higher costs and softer sales.

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Sector Watch

Bond Market

Yields followed oil down, with the 10-year near 4.694%. The strong factory print barely moved it, which tells you energy is doing most of the work on the inflation side right now.

Policy Watch

Fed

Kevin Warsh floated changing how often the Fed meets on rates, according to Bloomberg. He raised it at last week's meeting and nothing has been decided.

• Six rate-setting meetings a year instead of eight, plus two sessions on a broader economic topic.

• The committee has met eight times a year since the early 1980s.

• Fewer meetings means longer gaps between scheduled chances to move, which puts more weight on each one.

Fiscal & Trade

Trump went after Chevron by name over gasoline above $4 a gallon and told oil companies to bring pump prices down. Chevron earned $12.1 billion last quarter, close to five times the year-ago figure, so the target makes sense politically. Worth knowing though: almost every Chevron-branded station is independently owned, and the operator sets the number on the sign.

International

The US and Japan confirmed they bought yen together on Friday, the first American currency intervention since 2011. Traders put the size near $36 billion.

• Treasury sold euros instead of dollars, which kept pressure off the greenback while long yields sit high.

• The yen came off a four-decade low near 163 and traded around 157 today.

• ING's Chris Turner said the move does not change the fundamentals. MUFG's Lee Hardman thinks the threat of doing it again, paired with faster rate hikes out of Japan, is what keeps the short sellers honest.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

Palantir Earnings

Palantir Technologies $PLTR reports tonight. Revenue has been growing fast and the stock still had a rough year, so this is the clean test of whether investors are done handing out the benefit of the doubt.

SpaceX Earnings

SpaceX $SPCX reports Tuesday in its first quarter as a public company. Launch services revenue was $330 million in the first quarter against $566 million a year earlier, so watch that line and the Starship timeline. RBC's Ken Herbert also flags the coming lockup expiration as a real overhang.

Friday's Jobs Report

July payrolls arrive Friday. Factory hiring turning positive is a good sign going in. The question is whether the rest of the economy is adding jobs at the same time.

- John

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