Stocks & Bonds Rose as US-Iran Hopes Spur Oil Drop

Market Trends & Macroeconomic Environment - S&P 500 closed above all key moving averages after a turbulent July with back-to-back gains[1], while the Nasdaq 100 and Nasdaq Composite each rose about 2%[119] - Oil prices dropped 5% on a weekly basis and 5% on a daily basis, having a significant downward impact on energy costs[2] - U.S.-led currency intervention to contain the drop in the yen kept Japan from selling U.S. Treasuries, contributing to a bond market rally and lower yields[3] - U.S. factory activity surged to the highest level since 2022, with manufacturers increasing headcount for the first time since 2023[5][6] - The Federal Reserve held the federal funds rate at 3.5% to 3.75%, while forward-looking inflation metrics remained anchored[17][20] - The default rate across 1,300 U.S. private debt borrowers rose to a high of 6%, though rating methodology differences across agencies contributed to varying default rate calculations[51][54] Corporate Earnings & Financial Performance - S&P 500 Q2 earnings growth reached 35% to 40%, largely driven by technology, while valuations dropped back down to some of the lowest levels seen since 2020[8][10] - Palantir reported strong Q2 results, raising its full-year revenue guidance from a range of $7.66 billion to a tight range of $8.15 billion to $8.16 billion[111] - On Semiconductor reported adjusted EPS of $0.74 and quarterly revenue of $1.6 billion, beating analyst estimates[115] - Amazon crossed a $3 trillion market cap for the first time, becoming the fifth company ever to reach this milestone, while Boeing shares rose 8% following FAA certification for the 737 Max 7[103][104][105] Industry Developments & Potential Risks - The White House outlined $200 billion in spending per year to support individual scientists and private research facilities, with up to $5 billion allocated toward AI research and streamlined FDA review processes[23][31][32] - Bristol-Myers Squibb and AstraZeneca held early-stage talks regarding a potential megamerger that could become the largest pharma deal in history, though AstraZeneca shares fell as much as 10% amid investor pushback[39][40] - Yum Brands faced pressure and a 3% share decline following a parasitic Cyclospora outbreak tied to iceberg lettuce in Michigan that prompted early health authority investigations[49][109] - Yellow Card raised a $40 million funding round backed by strategic investors including SC Ventures and Sony Innovation Fund to expand its global stablecoin infrastructure and cross-border payment accounts[159][160][162]