Stocks Still Await Signs of Price Stability: Stock Market Today
The main stock indexes drifted lower as crude oil prices and interest rates moved mostly sideways on Tuesday. Investors, traders and speculators are waiting for this week’s incoming inflation data before they make any major moves. We know earnings season has been big for top- and bottom-line beats, as well as for AI hyperscaler budget growth. Less certain, still, is the situation in the Middle East and who controls the Strait of Hormuz.
“Corporate earnings are now so strong that the wild trading swings that occurred in July have been muted by the reality that record sales, earnings, positive guidance, and rising order backlogs are real,” observes Louis Navellier of Navellier & Associates. According to FactSet, based on results for 88% of the S&P 500, 86% have reported a positive earnings surprise, and 76% have reported a positive revenue surprise.
Earnings growth so far is 50.4%, the highest rate since the second quarter of 2021 (91.6%). Reported revenue growth to date is 15.0%, the best figure since the fourth quarter of 2021 (16.1%). All 11 sectors have reported year-over-year revenue growth; five have posted double-digit rates, with energy stocks, technology and communication services stocks leading the way.
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At the same time, in the aftermath of a cooler-than-expected July jobs report, the primary factor driving price action this week is inflation. All eyes are on the release of the July Consumer Price Index (CPI) report before the opening bell on Wednesday.
Whether the Federal Open Market Committee (FOMC) raises its target range for the federal funds rate at the conclusion of the September Fed meeting is now almost literally a 50-50 proposition. According to CME FedWatch, the probability that Fed Chair Kevin Warsh & Co. raise interest rates by 25 basis points in September is 49.9%.
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The front-month West Texas Intermediate crude oil futures contract was up 1.6% on Tuesday to $83.45 per barrel. The 2-year Treasury yield inched back to 4.224% from 4.239%, the 10-year was down to 4.692% from 4.698%, and the 30-year ticked lower to 5.242% from 5.243%.
At the closing bell, the tech-heavy Nasdaq Composite had shed 0.6% to 26,445, the broad-based S&P 500 was lower by 0.3% to 7,728, and the blue-chip Dow Jones Industrial Average had declined 0.3% to 53,791.
AI stocks are set to report
AI native cloud computing platform CoreWeave (CRWV, +2.4%) and AI infrastructure supplier Super Micro Computer (SMCI, +0.5%) make an appearance on the earnings calendar after today’s close.
Wall Street expects CoreWeave, one of the hottest IPOs of 2025, to report triple-digit revenue growth, roughly in line with its most recent two quarters, and to update markets on a backlog that was $99 billion at last check. Analysts also expect Super Micro’s top-line growth to exceed 100%, with new orders pre-reported at about $60 billion also on their collective mind.
Meanwhile, Nvidia (NVDA, -0.02%) has reasserted itself atop the global market cap rankings, as markets seem to approve of a new $500 billion plan to support AI infrastructure spending.
Intel (INTC, +0.2%) is also seeing a positive reaction to its upsized $20 billion offering of new shares, as the semiconductor stock seeks to expand its capacity. Intel reported expectations-beating results and raised full-year guidance on July 23.
Nvidia will unofficially bring down the curtain on the current reporting season when the biggest mover of the AI boom reveals its fiscal 2027 second-quarter results after the closing bell on Wednesday, August 26.
CAH rises to and retreats from a new all-time high
Cardinal Health (CAH, +1.2%) was among the top-performing S&P 500 stocks early on Tuesday and traded up to a new all-time high intraday after the medical services and products provider reported mixed fourth-quarter results but shared strong guidance for fiscal 2027.
CAH missed Wall Street’s earnings estimate and beat on revenue for the three months ending June 30. But management expects earnings per share of $12.40 to $12.60 next fiscal year, which represents year-over-year growth of 13% to 15%, and is well ahead of a FactSet-compiled consensus of $12.08 at the midpoint.
The company forecast 3% to 5% growth in revenue from its pharmaceuticals business, 2% to 4% growth for medical products and distribution. Guidance includes an uplift from the completed acquisition of Strive Medical and the announced deal to buy diabetes assets from AdaptHealth (AHCO, +8.2%).
CAH, a sleeper blue-chip stock, has generated a total return of more than 400% over the trailing five years vs less than 90% for the S&P 500. CAH is also outpacing the S&P 500 over the trailing 12 months (52.2% to 22.8%), as well as year to date (16.2% to 14.0%) through Monday.
