Article by: Tide Research
The S&P 500 and Dow Jones both hit new all-time closing highs, while the Nasdaq rose 2.59%. The primary driver behind the market rally was expectations of the Strait of Hormuz reopening, as U.S. Treasury Secretary Bessent and Secretary of State Rubio both signaled that negotiations could yield results as soon as tomorrow, causing oil prices to plunge over 5%. Meanwhile, semiconductor and memory stocks formed a separate catalyst, with the Philadelphia Semiconductor Index surging more than 6%, fueled by a bullish research report from HSBC and Samsung’s new technology roadmap—unrelated to developments in Iran. Yet, shortly after U.S. markets closed, SpaceX and AMD released their most highly anticipated earnings reports since going public; both reports exceeded expectations, yet their stock prices reversed downward, once again上演ing the script where strong earnings fail to withstand selling pressure.
Expectations of the Strait of Hormuz reopening fuel optimism, causing oil prices to plunge over 5%.
The S&P 500 rose 1.79% to 7,736.52, surpassing its previous all-time closing high set on June 2. The Dow Jones Industrial Average increased 1.71% to 54,085.88, marking its second consecutive trading day at a new all-time closing high. The Nasdaq Composite gained 2.59% to 26,584.993.
U.S. Treasury Secretary Bentsen indicated that an agreement to reopen the Strait of Hormuz with Iran could be finalized as soon as tomorrow, while Secretary of State Rubio also signaled progress, stating that negotiations are moving forward. On the same day, Iran softened its stance, with a foreign ministry spokesperson noting positive technical and political developments in talks with Oman. Iran is reportedly abandoning its previous insistence on a "mutual full control" arrangement and has, for the first time, considered involving European countries such as the UK and France in mine-clearing efforts. This series of signals has significantly heightened market expectations for de-escalation, with WTI crude oil falling 5.69% to $75.77 per barrel and Brent crude dropping 5.26% to $79.36 per barrel. The 10-year U.S. Treasury yield declined 5.08 basis points to 4.6248%, while the 2-year yield fell 4.15 basis points to 4.1959%.
COMEX gold rose 1.07% to $4,134.2 per ounce. COMEX silver rose 3.27% to $59.75 per ounce. Bitcoin opened at $63,463.72, flat compared to Monday, and rose to $63,818.70 during morning trading; Ethereum opened at $1,858.53, down 1.3%, and rose to $1,874.41 during morning trading. The Livemore China Dragon Index closed up 1.55%, with major European indices rising collectively; Germany's DAX30 gained 0.85%.
Chip stocks surged across the board, with the Philadelphia Semiconductor Index posting four consecutive gains.
The Philadelphia Semiconductor Index rose over 6%, marking its fourth consecutive trading day of gains, after plunging 20.6% in July. Chip stocks rallied broadly, with ARM up 17.36%, Intel and SanDisk rising over 10%, and SK Hynitz gaining over 8%. The optical communications sector also strengthened significantly, with Coherent and Marvell Technology up over 12%, Corning rising over 9%, Lumentum gaining over 8%, and Micron Technology climbing over 7%.
This rally is backed by research reports. HSBC did the math: Samsung Electronics’ current stock price implies long-term earnings assumptions equivalent to just 0.8 times its 2024 EPS. In other words, the market’s premium for the AI memory narrative has essentially vanished—SK Hynix is in a similar position. HSBC concludes that the most severe wave of panic selling is likely behind us. On the same day, Samsung also unveiled its roadmap for next-generation 3D memory technology, claiming the new solution can achieve several times the storage density of traditional HBM, further reassuring the market.
SpaceX and AMD both reported after-hours earnings that beat expectations, but their stock prices turned lower.
SpaceX has released its first earnings report since going public, reporting second-quarter revenue of $7.8 billion, a 92% year-over-year increase, significantly surpassing the market expectation of $6.81 billion. Adjusted EBITDA reached $3.5 billion, a dramatic 191% year-over-year growth, also substantially exceeding the $2 billion forecast. Starlink accounted for the majority of profits, while losses from the AI business narrowed by nearly half compared to expectations. Musk revealed on the earnings call that Grok 4.6 is expected to launch next week, and SpaceX’s computing capacity could reach 5 to 10 gigawatts by the end of next year. This year, the company will also attempt to recover the first and second stages of Starship V3.
Despite these impressive figures, SpaceX's stock fell nearly 9% after hours, as the market appears more concerned about whether the company’s capital expenditures can be sustained, making this earnings report secondary.
AMD’s situation is similar. In the second quarter, revenue reached $11.54 billion, a 50% year-over-year increase and a record high, surpassing the market expectation of $11.31 billion. Non-GAAP earnings per share came in at $1.66, up 246% year-over-year and also exceeding expectations. Data center revenue reached $6.7 billion, a 107% year-over-year increase, accounting for 58% of total revenue. CEO Lisa Su emphasized on the earnings call that the company remains in the early stages of the AI cycle and expects data center sales to double by 2027.
The market, however, was focused on the Q3 revenue guidance; although the midpoint of $13 billion exceeded the previous estimate of $12.5 billion, this increase was still seen as insufficient by some aggressive investors, causing AMD’s stock to drop more than 8% in after-hours trading.
Loosening restrictions during the day and dousing with cold water at night—the market standard has changed.
Geopolitical easing pushed oil prices and long-term interest rates lower, while chip and memory stocks rebounded significantly from their July losses, fueled by bullish research reports from institutions like HSBC—this happened during trading hours. But after the market closed, SpaceX and AMD delivered after-hours earnings reports that dampened the optimism: although their financial numbers were solid, their stock prices still fell. The market’s evaluation criteria for AI-related companies have shifted—simply exceeding expectations is no longer enough; what’s now being closely watched is just how much the results exceeded expectations and whether the capital expenditures make financial sense.
How long will this divergence last? Over the next few days, there are two specific indicators to watch. First, whether the Strait of Hormuz will actually reach an agreement tomorrow, as Bessent suggested—if negotiations stall again, the oil prices and risk premiums suppressed today could rebound at any moment. Second, the non-farm payrolls data to be released on Friday, which is the Fed’s most critical reference for determining its interest rate path; if the data shows the labor market remains robust, the room created by yesterday’s decline in U.S. Treasury yields may tighten once again.