The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.38%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.29%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.28%. September E-mini S&P futures (ESU26) rose +0.35%, and September E-mini Nasdaq futures (NQU26) fell -0.30%.
Stock indexes settled mixed on Wednesday, with the S&P 500 posting a 6-week high. The broader market garnered support from Wednesday’s US economic news, which showed that June producer prices rose less than expected and the July Empire manufacturing survey rose more than expected.
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Strength in technology stocks also bolstered the broader market, following strong earnings from ASML, which offered fresh evidence of the relentless demand for chips needed for the global artificial intelligence buildout. ASML is the only maker of sophisticated lithography machines needed to manufacture advanced semiconductors. Also, Apple closed up more than 4% to lead the Magnificent Seven technology stocks higher after China approved the rollout of Apple’s generative artificial intelligence feature.
However, the Nasdaq 100 settled lower on Wednesday amid a rout in chipmakers. Also, health insurance stocks were under pressure after Elevance Health plunged following its updated guidance that fell short of the second-quarter beat.
US MBA mortgage applications fell -2.7% in the week ended July 10, with the purchase mortgage sub-index down -7.3% and the refinancing mortgage sub-index up +3.5%. The average 30-year fixed-rate mortgage rose +7 bp to 6.65% from 6.58% in the prior week.
US Jun PPI final demand eased to +5.5% y/y from +6.0% y/y, weaker than expectations of +6.2% y/y. Jun PPI ex food and energy rose +4.7% y/y, weaker than expectations of +5.1% y/y.
The US Jul Empire manufacturing survey of general business conditions rose +9.9 to 15.6, stronger than expectations of 9.2.
Dovish comments on Wednesday from New York Fed President John Williams were supportive for stocks and bonds when he said, “Inflation is unquestionably too high, but there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.”
The Fed Beige Book was mixed for stocks as it stated that economic activity in the 12 Fed regions increased at a slight to moderate pace in the 6 weeks to July 6, unchanged from June’s summary. Most regions reported little to no change in employment and, “consumer prices continued to rise, with several districts reporting their contacts saw greater price sensitivity among their customers.”
Chinese economic news was mixed for global growth prospects. On the negative side, China’s Q2 GDP rose +4.3% y/y, slightly weaker than expectations of +4.4% y/y and the smallest increase in 3.5 years. Also, Jun new home prices fell by -0.15% m/m, marking the 37th consecutive month of declines. On the positive side, China’s industrial production rose 5.3% y/y, stronger than the expected 4.6% y/y. Also, Jun retail sales unexpectedly rose +1.0% y/y, stronger than expectations of -0.1% y/y. In addition, the Jun surveyed jobless rate unexpectedly fell -0.1 to 5.0%, showing a stronger labor market than expectations of no change at 5.1%.
On the negative side, geopolitical risks are ramping up, as the interim peace deal between the US and Iran has effectively collapsed. The US maintained its naval blockade of Iran and launched another wave of airstrikes on Iran on Wednesday, the fifth straight day of attacks. President Trump pledged to intensify the bombardment until Iran stops attacking ships in the Strait of Hormuz and agrees to open the waterway. Iran responded with missile and drone attacks against Kuwait.
The outlook for strong Q2 earnings, which will begin this week, is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2.
The markets are discounting a 10% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.
Overseas stock markets settled mixed on Wednesday. The Euro Stoxx 50 closed down -0.23%. China’s Shanghai Composite closed down -0.29%. Japan’s Nikkei-225 Stock Average closed up +1.49%.
Interest Rates
September 10-year T-notes (ZNU6) on Wednesday closed up +12 ticks, and the 10-year T-note yield fell -4.8 bp to 4.541%. T-notes recovered from early losses on Wednesday and moved higher after US Jun producer prices rose less than expected, a dovish factor for Fed policy. T-notes added to their gains on Wednesday when New York Fed President John Williams said, “there are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.” T-notes initially moved lower on Wednesday’s strength in WTI crude oil prices, which boosts inflation expectations and is bearish for T-notes.
European government bond yields were mixed on Wednesday. The 10-year German bund yield rose to a 1.75-month high of 3.148% and finished up +0.8 bp to 3.122%. The 10-year UK gilt yield fell -4.0 bp to 4.937%.
Eurozone May industrial production unexpectedly fell -0.2% m/m, weaker than expectations of a+0.2% m/m increase.
ECB Governing Council member and Bundesbank President Joachim Nagel said, “The development of energy prices is a decisive factor in determining the future inflation outlook, and monetary policy will maintain its vigilant stance.”
Swaps are discounting a 6% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.
US Stock Movers
Strength in the Magnificent Seven technology stocks was a supportive factor for the overall market on Wednesday. Apple (AAPL) closed up more than +4% to lead gainers in the Dow Jones industrials after Bloomberg News reported the company received government approval to roll out its Apple Intelligence generative artificial intelligence feature in China. Also, Alphabet (GOOGL), Amazon.com (AMZN), and Meta Platforms (META) closed up more than +3%. In addition, Microsoft (MSFT) closed up more than +2% and Nvidia (NVDA) closed up +0.33%. Bucking the trend, Tesla (TSLA) closed down -0.46%.
Software stocks settled higher on Wednesday, recovering some of Tuesday’s sharp losses. Thomson Reuters (TRI) closed up more than +4%, and Atlassian Corp (TEAM) and Oracle (ORCL) closed up more than +3%. Also, Adobe Systems (ADBE), Workday (WDAY), and Autodesk (ADSK) closed up more than +1%.
Chipmakers and AI-infrastructure stocks were under pressure on Wednesday, a negative factor for the broader market. The iShares Semiconductor ETF (SOXX) closed down more than -2%. Western Digital (WDC) closed down more than -8% to lead losers in the Nasdaq 100, and Sandisk (SNDK) and Micron Technology (MU) closed down more than -6%. Also, Marvel Technology (MRVL) closed down more than -7%, and Seagate Technology Holdings Plc (STX) closed down more than -5%. In addition, Intel (INTC) closed down more than -4%, and Advanced Micro Devices (AMD) and Lam Research (LRCX) closed down more than -3%.
Elevance Health (ELV) closed down more than -8% to lead health insurance stocks lower after Evercore ISI said the company’s updated guidance was “lower” than the beat in the second quarter. Also, Molina Healthcare (MOH) and Centene (CNC) closed down more than -3%, and Cigna Group (CI) and UnitedHealth Group (UNH) closed down more than -1%.
PayPal Holdings (PYPL) closed up more than +17% to lead gainers in the S&P 500 and Nasdaq 100 after Reuters reported Stripe and Advent International have made a joint offer to buy the company for $53 billion, or $60.50 per share.
Karman Holdings (KRMN) closed up more than +6% after S&P Dow Jones Indices reported that the company will replace BrightSpring Health Services in the S&P SmallCap 600 effective before the opening of trading on Friday, July 17.
BlackRock (BLK) closed up more than +6% after reporting Q2 adjusted EPS of $13.91, well above the consensus of $12.66.
Lionsgate Studios (LION) is up more than +6% after Reuters reported the company is exploring a sale and has attracted takeover interest from Bollore Group.
Cintas (CTAS) closed up more than +4% after reporting Q2 revenue of $2.91 billion, better than the consensus of $2.87 billion, and forecasting 2027 revenue of $12.10 billion to $12.25 billion, the midpoint above the consensus of $12.12 billion.
3M Co (MMM) closed up more than +2% after announcing a strategic partnership with Microsoft focused on AI data center infrastructure and enterprise transformation.
Pentair Plc (PNR) closed down -15% to lead losses in the S&P 500 after cutting its full-year adjusted EPS forecast to $4.60 to $4.80 from a previous forecast of $5.30 to $5.40, well below the consensus of $5.33.
Phoenix Education Partners (PXED) closed down more than -12% after cutting its 2026 net revenue forecast to $1.02 billion to $1.03 billion from a previous estimate of $1.03 billion to $1.04 billion.
Progressive Corp (PGR) closed down more than -9% after reporting Q2 net premiums written were $21.08 billion, below the consensus of $21.29 billion.
Travelers Cos (TRV) closed down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $290.
Earnings Reports(7/16/2026)
Abbott Laboratories (ABT), Alcoa Corp (AA), Citizens Financial Group Inc (CFG), Commerce Bancshares Inc/MO (CBSH), FNB Corp/PA (FNB), General Electric Co (GE), Intuitive Surgical Inc (ISRG), Netflix Inc (NFLX), Prologis Inc (PLD), State Street Corp (STT), UnitedHealth Group Inc (UNH), US Bancorp (USB).
