Market Review: July 28, 2026

Closing Recap

Tuesday, July 28, 2026

U.S. stocks recovered after early losses as the Nasdaq fought back from more than 1% down to turn positive midday heading into several key events upcoming this week. But the Nasdaq couldn’t hold those gains as strength in software (IGV) and large cap strength (AAPL, GOOGL, MSFT) couldn’t quite offset the weakness in semis (SOX) as the sector falls more than 20% this month following a monster run to record highs. Energy and tech were the big drags today, but Healthcare (XLV) hit a fresh all-time high, along with strength in defensives like Consumer Staples (XLP +2%), Communications (XLC) and Materials (XLB) all up around 2%. Volumes were low as Wall Street waiting for the real fireworks tomorrow starting at 2:00 pm et when the FOMC holds its interest rate policy meeting (low chance of rate hike/expectations generally to remain on hold at 3.5%-3.75% range). Then earnings from META, MSFT are Wednesday night (more capex AI spending fears), core PCE inflation and 2Q GDP print on Thursday morning at 8:30 am et, and then AAPL, AMZN earnings on Thursday night to round out the week. The Dow surged over 500 points and the Russell 2000 ended higher as tech was today’s clear drag.

While tech battled back off lows today, the S&P Technology sector (XLK) dropped -15.5% from record highs intraday. The big story continues to revolve around momentum weakness with the AI trade under scrutiny. Blame has been attributed to both technical/fundamental factors. When it comes to latter, recent focus has been on elevated hyperscaler capex, circular financing, widening credit spreads, open-model momentum and China competition. The general feel so far this tech season on the  AI trade shows concerns for hyperscaler setup (AMZN, META, MSFT, GOOGL, ORCL) as lower Capex hurts AI suppliers while higher Capex guides pressures free cash flow (FCF) and financing raises funding fears. So far, an ordinary beat has not been enough (see INTC, ASML, TSM, etc.). Memory stocks have been crushed this month after a historical rally (SNDK, MU, WDC, STX) and semi caps tumble as one of the excuses for Monday’s weakness in the AI trade was a report in The Information that China has begun mass-producing domestic DUV chipmaking tools (led to an -8.5% selloff in ASML). Big selloff in South Korea continues as the Kospi fell nearly 11% overnight, its biggest one-day decline since early March and lowest level since April. AI capex concerns in credit markets have also become a focal point for the scrutiny surrounding the AI capex boom. FT discussed how CDS spreads on Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom and Nvidia are hitting record highs. Flagged uncertainty over pace and cost of funding, along with ROI/monetization. Goldman Sachs estimated hyperscaler debt will represent 33% of FY26 capex.

Asia was week as The Nikkei Index tumbled -2,566 points or 3.95% to 62,364, while the KOSPI index dropped as much as -10.9%, to the lowest level since mid-April after triggering its 9th circuit breaker of 2026. After gaining 297% from 4/9/25 to 6/22/26 for its strongest bull market since an 850% rally from May 1982 to April 1989, South Korea’s KOSPI has crashed 34% in the last 25 trading days (36 calendar days). Calendar this week: No data scheduled for Wednesday except for the FOMC meeting. June personal income and spending report, highlighted by core PCE inflation, out on Thursday, along with first look at Q2 GDP and initial claims. Friday brings Q2 ECI, Chicago PMI and final University of Michigan consumer sentiment (and inflation expectations). FOMC meeting on Wednesday the macro highlight of the week.

• Richmond Fed composite manufacturing index +5 in July vs +4 in June and Richmond Fed manufacturing shipments index +8 in July vs +4 in June.

• Consumer Staples/Products: CLX was downgraded to Hold from Buy at Jefferies (tgt to $98 from $125) saying they were wrong in assuming the company’s fiscal 2027 earnings per share power could top $7.00. Clorox is getting a new CEO at a time when share trends remain soft.
• Retail sector: LEVI was downgraded from Overweight to Equal Weight at Wells Fargo saying they are not making any changes to its estimates or PT ($25) as its LT view of LEVI remains constructive but sees a more balanced risk/reward NT setup. CNBC reported Shein notes it’s under investigation by the US federal trade commission as it prepares for Hong Kong IPO.

• Lodging sector: HLT raised its forecast for full-year room revenue growth as now expects fiscal 2026 RevPAR growth of 3% to 3.5%; said room revenue from its Middle East and Africa region plummeted 29.5% as prolonged wars have dampened travel to the region, creating uncertainty over the 2H’26.
• Auto sector: shares of TM, HMC both noted they halted production at auto plants following a 7.1-magnitude earthquake hit Japan’s southern Kumamoto prefecture, knocking out power to thousands of homes, rupturing roads and leaving some trapped.
• Leisure sector: PII reported Q2 EPS of $1.97, well above the Street’s $0.75 and excluding an $0.86 tariff refund, operational EPS was $1.01 as sales grew 9%, with Na retail up 4% and ORV Utility leading the way and raised ’26 EPS guide to $3.00-$3.10 from $1.60-$1.70 on tariff refund/operational performance; PNR Q2 sales fell 17%, missing analyst expectations and adjusted EPS for Q2 missed consensus, declining 18% y/y noting sales decline was mainly due to a larger-than-anticipated inventory correction in the Pool channel; expects 2026 sales to decline 4% to 7% on a reported basis.
• Boating sector (BC, MCFT, MBUU, HZO): Keybanc said June’s boat retail data showed -3% Y/y was better than normal seasonality (+LSD% vs -MSD% normal sequential), with May revised upward 8.5% Y/y vs -10.3% Y/y prior). Importantly, notes relative outperformance in Aluminum Fish (-0.8% Y/y), with softer trends in Ski (-13.3% Y/y). Looking ahead, Marine view remains cautious.

• Oil sector: XOM was downgraded to Neutral from Buy at Bank America ahead of earnings this week citing limited upside from geopolitical disruptions and potential downside if a Middle East ceasefire is reached despite a higher price target from updated estimates. MGY was upgraded to Buy from Hold at Truist as views the WildFire acquisition favorably, given the cash flow per-share accretion with significant scale added that extends inventory life to about 11 years from 8 in its prior estimates. Oil driller NE declined following weaker quarterly results last night.

• FinTech sector: PYPL reported better results helping lift shares; AAPL introduced Apple Upgrade, a KLAR Klarna-provided leasing program for iPhone, Apple Watch, Mac, and iPad. It is available through Apple’s U.S. website, app, and retail stores.

• PFG reported Q2 results above expectations, with earnings driven by stronger U.S. group insurance margins, favorable experience in its international business, and continued share repurchases, though higher corporate expenses and lower investment income partially offset gains.
• CINF reported Q2 op income of $1.43 below ests $1.84 as earnings miss was due to higher-than-expected catastrophe losses, which can be very volatile. Excluding cat losses, underlying results were a little over a point higher than expected but were still at a very good level.

• KRC reported a 2Q26 FFO beat (+$0.03 vs. cons.) though mgmt. maintained its FY26 FFO guidance at $3.49-$3.63 (in line with cons.). Fundamentals in the quarter were mixed, as cash SSNOI moderated to +1.5% while cash rents materially accelerated to +6.1%
• UDR’s 2Q26 FFOA beat consensus by ~2%, and 2026 FFOA was bumped higher by $0.01 (in line with cons.). Better than expected blended lease rate growth and lower expense growth led the Company to increase SS Rev. and SSNOI growth guidance by ~13 bps and 50 bps, respectively
• WELL 2Q26 FFO beat cons. by over 3%, and 2026 FFO guidance increased by ~2% (1.6% above cons.). SHO SSNOI growth increased 20%+, which contributed to another 100 bps increase to SHO SSNOI growth guidance, and a 75 bps increase to total portfolio SSNOI growth.

• GOSS upgraded from Market Perform to Outperform at Leerink with $1 tgt based on valuation as FDA’s characterization of PROSERA’s statistical significance and Magnitude of treatment effect as review rather than filing issues meaningfully reduces near-term regulatory uncertainty.
• GSK launched a £1.9 billion ($2.52 billion) cost-savings program to help fund their late-stage studies, aiming to deliver on CEO Luke Miels’ promise of faster drug development and boost investor trust; also beat Q2 profit expectations and said it would invest £400 million in the UK.
• INCY posted Q2 beat and raised its 2026 revenue forecast to between $5.13B-45.26B from its previous forecast of $4.77B-44.94B after reached a settlement in June with the Centers for Medicare & Medicaid Services over rebate criteria for Opzelura, its eczema and vitiligo treatment.
• JNJ said it would pay an estimated $5.5 billion to resolve tens of thousands of lawsuits alleging its baby powder and other talc products cause ovarian cancer.
• LNTH shares active after Bloomberg reported Curium is said to near about $7B acquisition; firm in talks to pay roughly $102 per share upfront and an additional $12.50 per Lantheus share in contingent value rights
• PMN shares rose after positive results for its trial of PMN310, a drug being developed to treat cognitive impairment in people with Alzheimer’s disease; said the drug had a positive safety profile so far and the majority of the 136 trial patients showed reductions in disease-relevant biomarkers.
• REPL shares fell after FDA staff says the clinical trial conducted for Replimune’s therapy, RP1, did not provide substantial evidence that it works when combined with BMY’s nivolumab in advanced melanoma; says the trial could not determine whether RP1, rather than nivolumab alone, drove the observed benefit

• MedTech sector: BSX announces a restructuring plan to optimize supply chain and organizational restructuring, see some headcount reductions, plans expected to be completed by end of 2029; plan is estimated to result in total pre-tax charges of approximately $700M-$800M.
• CRO sector: IQV raises FY2026 adj EPS forecast to $12.80-$13.00 from prior forecast of $12.65-$12.95as midpoint tops ests $12.90; posted Q2 EPS and rev beat $4.37B vs. est. $4.3B.
• Hospital operators: UHS reported Q2 comparable EBITDA that missed estimates by 15%, Acute EBITDA came in ~4% below after normalizing for SDPs, PLGL costs, and incremental drag from new facilities; guide for 2026 EBITDA was cut by ~2%.

• Multi Industry sector: HON was upgraded to Neutral from Underperform at bank America (tgt to $265 from $205) after better-than-expected Q2 results and raised its 2026 guidance, with strong orders across all business segments improving confidence in second half growth; ITW raises FY26 EPS view to $11.35-$11.55 from $11.10-$11.50 and raises FY26 revenue view to up 4%-5% from up 2%-4% after results.
• Transport sector: UPS traded higher initially on earnings and guidance beats, but shares reversed after comments on conference call about tariff impacts and volume declines in some parts amid declines in Europe exports also flat Q3 revs; RXO was downgraded to Sell from Hold at TD Cowen as sees the Montgomery Supreme Court decision and recent CHRW verdict as creating a tougher liability backdrop for the large truckload brokers. RXO is among the most exposed given its long-haul mix and leverage. TFII delivered a strong Q2 beat led by its Truckload segment and raised Q3 EPS expectations

• BA reported a larger-than-expected quarterly loss after taking a $280M charge on its Air Force One replacement program but generated positive free cash flow (FCF of $631M, vs. negative -$200M y/y; core EPS loss per share of (-$0.76) worse than ests (-$0.30) though narrower than the (-$1.24) core loss y/y.
• SPCX, RKLB and other space stocks active this afternoon after reports FAA proposes to streamline commercial space licensing rules, to make it easier to conduct launches.

• Paper sector: IP was upgraded from Neutral to Overweight at JP Morgan saying valuation after incorporating a further $50/t suggests ~43% upside for IP versus today’s share price. Even if JPMC was to assume no further cost-out or 80-20 improvements it could still justify upside of ~34%.
• Metals & Mining: NUE posted Q2 adjusted EPS of $4.84 vs the Street’s $4.46, and the guidance range of $4.50-$4.60 provided in mid-June as Q2 featured a strong earnings performance in Steel Mills, which featured a volume uplift from the record Q126 and benefited from ~$130M in cash refunds; Q2 EBITDA was ~$1.97B, up ~30% q/q vs Q126’s $1.51B and up ~55% Y/y.

• In EMS sector: CLS reported Q2 revs/EPS of $4.7B/$2.54 (with record adj-OM of 8.2%), cleared the high end of their guide and consensus of $4.4B/$2.30/8.0% as upside was broad-based: Communications grew 62% Y/y versus the +50% guide, Enterprise increased 167% versus +130% guided; also raised FY26 revenue / adj-EPS / adj-OM; SANM reported a strong Q3, with revenue, margins, and EPS above expectations, driven by broad-based end-market growth, while a lower near-term ZT revenue outlook and uncertainty around AMD Helios timing keeps concern on long-term revenue growth
• EDA sector: CDNS reported 2Q results that trended at the high-end of the guidance, posted another upward revision to FY26 revenue guidance that materially exceeded the 2Q26 beat; revenue of $1,584.5M (+24.2% y/y) beating consensus by a more modest $7.5M/0.5%. HW had another record quarter with strong inventory build-up (+73% Y/ Y), supporting the continued robust 2H trend.
• Communication & Networking: FFIV Q3 was largely a repeat of FQ2, with hybrid multi-cloud the clear driver of the business that is resulting in other demand drivers (AI, platformization, competitive displacements) come to the limelight; guide moves higher than the FQ3 upside and GPM is holding.

• SKHY plans to start mass production of next-gen LPDDR6 memory in the second half of 2026, with Xiaomi lined up as the expected first customer. Early mover positioning on the new high-bandwidth mobile memory standard; Xiaomi as launch partner gives an immediate smartphone volume path.
• AMKR delivered a strong beat-and-raise quarter driven by improved gross margins, strength in Computing and Automotive/Industrial, and better utilization, but shares fell as Q3 outlook sales $1.95B-$2.05B vs. est. $2.113B, below consensus; Q3 outlook net Income $180Mm-$205Mm.
• NVTS posts Q2 revenue of $10.5M, compared to $14.5M y/y; reports Q2 net loss of (-$228.22M) vs. loss of (-$49.08M) y/y saying wider loss ties to a non-cash charge tied to its 2022 acquisition of GeneSiC; NVTS was sued by Japanese chipmaker Renesas last week over alleged AI chip trade-secret theft.