July 21st Market Overview

Happy Tuesday

Chips came back and the market followed them up. Memory names did most of the lifting, and traders are clearly getting positioned ahead of Alphabet, Tesla and IBM tomorrow after bell. Earnings won the day over the Middle East headlines.

Oil keeps creeping up on middle-east headlines, nothing near its war time highs but its something I’m keeping in eye on. Also, I spent 2h on pre-market report this morning and forgot to hit send, swing and a miss!

Let’s dig in...

Today's Big Picture

1. Chips Lead The Bounce

Semiconductors did the work today after last week's beating. Memory was where the money went, with Micron, Western Digital and Seagate all moving together. This is positioning, plain and simple. Nobody wants to be light on AI hardware going into Alphabet, Tesla and IBM tomorrow.

2. Beating Estimates Is Now The Price Of Admission

Nearly nine in ten of the roughly 66 S&P 500 companies reporting so far have topped profit estimates. 3M and General Motors beat and got paid for it. Equifax guided its next quarter a little light and lost seven dollars a share by afternoon. Bret Kenwell at eToro put it well: good results are not always good enough anymore.

3. Oil Closes Above Ninety For The First Time Since June

Brent settled just over ninety one dollars after Yemen's Houthi militia threatened to blockade Saudi shipping at the mouth of the Red Sea. That matters because the Strait of Hormuz is already shut to through-traffic, which made the Red Sea the pressure valve for Gulf crude. Goldman Sachs thinks Brent clears one hundred twenty dollars in the fourth quarter if Hormuz stays closed.

Market Overview

Index Performance

Stock Spotlight

3M $MMM ( ▲ 7.32% )  
was the best name in the Dow today after profit grew and management raised full year guidance. CEO Bill Brown says the company ships more than 350 new products this year.

General Motors $GM ( ▲ 4.91% )  
raised guidance for the second time in 2026. US sales volume actually fell, but revenue still grew because GM is selling bigger, more expensive trucks. Mary Barra told analysts they are building everything they can sell.

Hasbro $HAS ( ▲ 8.81% )  
raised its outlook after Magic: The Gathering sales grew by a third in the first half. A Marvel card set broke first day and first month sales records. Chris Cocks called Magic a mega franchise, and the numbers back him up.

Charles Schwab $SCHW ( ▼ 2.52% )  
earned 2.8 billion dollars last quarter as retail trading stayed hot. Daily average trades hit a record 11.9 million. Rick Wurster thinks that is a permanent shift in behavior, not a spike.

Equifax $EFX ( ▼ 3.93% )  
guided its third quarter below Wall Street and got taken apart for it.

Big Name Updates

Nvidia $NVDA ( ▲ 1.97% )  
disclosed a 9.3 percent passive stake in neocloud provider Nebius. Nebius was the standout gainer on the day.

Adobe $ADBE ( ▼ 3.23% )  
got cut to underweight at Morgan Stanley with the target dropped to 240 dollars from 365. Adam Wood thinks Adobe is running a freemium shift, a leadership change and a spending ramp all at once.

Oracle $ORCL ( ▲ 4.67% )  
sits at its lowest level since June 2024 after another leg down yesterday.

Other Notable Company News

D.R. Horton $DHI ( ▼ 0.88% )  
cut its full year revenue forecast after demand faded late in the quarter. Paul Romanowski blamed affordability and cautious buyers.

Novartis $NVS ( ▲ 2.88% )  
beat on quarterly profit behind cancer and multiple sclerosis drugs and kept full year guidance.

Utz Brands $UTZ ( ▲ 88.73% )  
agreed to go private with Germany's Intersnack Group and nearly doubled.

Steel Dynamics $STLD ( ▲ 1.32% )  
says Asian steel imports keep rising despite the fifty percent tariff, because Asian sheet steel sells for about half the US price. Management wants country-level quotas.

Yum Brands $YUM ( ▼ 0.14% )  
is on a seventh straight down day after Taco Bell pulled shredded lettuce over a cyclosporiasis outbreak.

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Sector Watch

Bond Market

Yields hit two month highs as oil put inflation back on the table. The ten year is near 4.63 and the thirty year is above 5.1.

The shift worth noting is directional. A month ago the argument was about cuts. Today traders leaned toward a hike on July 29. BMO says nobody calls the top in energy inflation until the July and August reports land.

Policy Watch

Fed

Kevin Warsh has been hawkish and the market is finally taking him at his word. UBS says a tight labor print plus firmer oil makes the next stretch tough for gold.

Fiscal & Trade

The fifty percent tariffs on Canadian autos, alcohol and dairy have a thirty day clock before they bite.

• The legal basis is Section 338 of the Trade Act of 1930, a novel reading that will draw court challenges.

• Thirty days is plenty of time for a deal. TD Cowen's Chris Krueger called it an eternity in this Washington.

• Oil and softwood lumber are exempt. That is why West Fraser Timber $WFG has almost no real exposure despite trading like it does.

More is coming. Trade Representative Jamieson Greer said to expect action soon on roughly sixty countries under investigation over forced labor rules. The temporary ten percent global tariff expires Friday.

International

Andy Burnham is the new UK prime minister and named John Healey chancellor, which nobody expected. Gilt yields fell across the curve. That is relief, not applause. BAE Systems, Babcock and Qinetiq all moved up on the bet that a former defense minister writes bigger defense checks.

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.

Alphabet, Tesla And IBM Report Wednesday

Alphabet is the one that moves everything. Listen for data center budgets, not the headline number.

The Global Tariff Expires Friday

The ten percent baseline replaced levies the Supreme Court struck down in February. Greer hinted at replacements. Friday tells us whether there is a gap or a clean handoff.

Bab el-Mandeb

A Chinese tanker leaving a Saudi Red Sea port turned around this morning. More of that and cargoes reroute through Suez, adding weeks of cost. That is what takes oil higher from here.

- John

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