Two forces pointed the same way Tuesday and the tape went straight up. The datacenter-components import ban story out of Reuters lit the optical, memory and accelerator names before the open, the Palantir print from Monday night gapped the stock nearly 30% at the bell, and a sharp drop in crude on fresh Hormuz-talks headlines gave the long end of the curve room to breathe.
The S&P 500 closed at a fresh record. Then after the bell AMD reported, guided above consensus, and lost 6%. SpaceX filed its first quarterly print as a public company, doubled the top line, and also traded down. Let me walk you through the split.
The Rundown
- The S&P 500 set a fresh closing record as a proposed US ban on China-made datacenter components sent the AI hardware complex sharply higher.
- A sharp Hormuz-driven crude selloff pulled long-end yields down and helped broaden the rally beyond the tech complex.
- A blowout Q2 from a marquee data-analytics name gapped the stock up dramatically in the regular session, extending the after-hours reaction from Monday.
- After the bell, two big AI-adjacent reports beat consensus but still traded lower, a useful read on how much is already priced into the group.
The Chip And Optics Complex Took The Day
The story that mattered before the open was Reuters reporting the US intends to restrict imports of Chinese-made components used in datacenter builds. That headline hit the domestic supply chain like a demand signal.
COHERENT CORP (COHR | ???12.35%) and LUMENTUM HOLDINGS INC (LITE | ???8.92%) - the two names that own most of the optical transceiver and pump-laser conversation for high-bandwidth AI interconnects - did the biggest moves. CIENA CORP (CIEN | ???5.21%) got carried along on the same read; the coherent-optics and packet-networking gear story sits directly in the same hyperscaler capex conversation.
Memory and accelerators followed.
MARVELL TECHNOLOGY INC (MRVL | ???12.81%) led the group, MICRON TECHNOLOGY INC (MU | ???7.62%) picked up on the same thread, and ADVANCED MICRO DEVICES (AMD | ???7.00%) rallied into its own after-close print.
Whether or not the actual ban lands in the form the Reuters piece described, the message the tape delivered is that any policy that pulls Chinese-made hardware out of the US datacenter supply chain is a straight transfer of demand to the domestic names and the market is not waiting for the final rulemaking to price that in.
Hormuz Talks Cracked The Crude Trade And The Inflation Backdrop With It
WTI dropped 6.3% to $75.30 and Brent gave up 5.9% to $78.83 after Treasury Secretary Scott Bessent told CNBC an agreement to reopen the Strait of Hormuz could land "today or tomorrow," with Iran reportedly considering letting European countries clear the mines. Crude is now down roughly 16% over four sessions. That is the kind of move that resets the second-half inflation setup, a normalised energy tape pulls headline CPI expectations lower, which is exactly what the long end of the curve keyed off of.
For anyone building a soft-landing picture into September, this is the swing input. The Fed does not need a lot more good inflation data to stay patient at the September meeting; a sustained oil unwind gives them exactly that.
Palantir Gapped Up 29% On Its "Alien" Quarter
PALANTIR TECHNOLOGIES INC-A (PLTR | ???29.45%) opened sharply higher and never gave much back after Monday night's print. I covered the details of the quarter in yesterday's note, the 149% US commercial growth, the roughly billion-dollar guide raise, Alex Karp's "alien quarter" phrasing that is on-brand to the point of parody.
The important thing on Tuesday is that the tape kept the gap open through the session. When a name this size holds a 29% one-day move without fading into the close, it tells you the sell-side had underwritten conservative and the funds that missed it are chasing.
The overhang I flagged Monday hasn't changed. The market cap is unforgiving on any traditional metric, and the political entanglement is a real drag on the international book. But the commercial acceleration is not a story anymore, it is the number.
Caterpillar's Energy Division Is The New Story
CATERPILLAR INC (CAT | ???5.60%) beat and took the tape's attention on the strength of its energy division. The generators-for-datacenters line is what drove the print, which is the second-order AI capex trade, Caterpillar sells the picks and shovels to the picks and shovels.
Every hyperscaler that commits another twelve figures of AI capex has to power that hardware, and the standby generator market is not something you scale overnight. This is a slower-moving read on the same theme, and it puts a specific number on the industrial pull-through.
McDonald's Pushed Out Its US Chief, Same-Store Comps Told The Story
MCDONALD'S CORP (MCD | ???1.17%) tacked on 1% but the news was Joe Erlinger being pushed out of the US leadership seat, with COO Skye Anderson taking over.
US same-store sales grew 0.8%, the weakest print since early 2025, and CEO Chris Kempczinski framed it as an execution problem, not a strategy one. Too many product launches slowed service, marketing tied to the World Cup underperformed, and the 50,000-restaurant global target got pushed to 2028 on higher build costs.
I would take Kempczinski's framing at face value. The strategy is not broken; the operational discipline is. Executive changes at this level of a franchise system take two to four quarters to show up in comps. The stock is down 13% year-to-date, and that is not a setup that turns on one leadership swap. It is a setup that turns on two consecutive quarters of comp reacceleration.
After The Bell: AMD Beat And Lost 6%, SpaceX Doubled Revenue And Lost Ground Too
Here is where the day got interesting.
ADVANCED MICRO DEVICES (AMD | ???7.00%) reported Q2 revenue of $11.54 billion (consensus $11.31 billion) and adjusted EPS of $1.66 (consensus $1.62). Datacenter revenue doubled to $6.7 billion. The Q3 revenue guide came in at roughly $13 billion versus a $12.6 billion consensus.
Every headline number cleared the bar. The stock still dropped 6.6% in the after-hours session, giving back Tuesday's regular-session gain.
The read: expectations for the AI accelerator names have run so far ahead of consensus that clearing the sell-side print is not enough anymore. The market wanted a blowout, and a beat-and-slightly-raise doesn't qualify. AMD is up more than double year-to-date, and that is the frame you have to price this against, not the analyst tape.
SPACE EXPLORATION TECHN-CL A (SPCX | ???9.43%) filed its first quarterly report since June's IPO.
- Revenue nearly doubled to $7.8 billion, well above the $6.81 billion consensus.
- Starlink alone grew 32% to $4.1 billion in revenue, with 1.7 million net new subscribers in the quarter and operating profit up 79% to $1.7 billion.
- The operating loss narrowed from $970 million to $143 million.
- The number that got attention was capex. Q2 capex was $18.4 billion, sixfold last year's level, of which $15.8 billion went to the AI division.
Musk said on the call to expect the rest of the year to run at that same rate, which implies roughly $65 billion in 2026 capex against $95 billion in end-of-June cash. That is a burn rate that eats the war chest inside two years unless the AI capacity monetises fast. Musk's claim was that AI investment recovers "inside a year" via server capacity rentals to third parties like Anthropic and Google. The stock traded down about 6.5% in the after-hours window.
Macro: Factory Orders Missed, Trade Deficit Narrowed, JOLTS Softened
Three data points landed and none of them changed the read materially. June factory orders fell 0.3% against a consensus of +0.2%, though May was revised up (from +1.1% to a firmer read). The June trade deficit narrowed by nearly 6% on imports falling faster than exports, which is a Q2 GDP tailwind mechanically, but not a great signal on end demand. JOLTS ticked lower on job openings.
None of this reshapes the setup into Friday's payroll print, which remains the number that shapes the September FOMC. The macro tape is soft-enough-but-not-cracking, which is exactly what the equity market has been trading on for six weeks.
Pharma And Consumer: Merck Beat, Pfizer Lifted The Floor, Kimberly-Clark Cut Guidance
MERCK & CO. INC. (MRK | ???0.18%) beat on both lines on continued Keytruda strength, even absorbing the cost of a recent acquisition. The stock finished slightly higher. PFIZER INC (PFE | ???1.52%) raised the low end of its full-year revenue outlook on non-Covid pharma growth and beat Q2 estimates but still finished down 1.3%, the tape wanted the top end raised too, not just the floor.
KIMBERLY-CLARK CORP (KMB | ???3.73%) cut its 2026 profit outlook after quality allegations around its diapers dented China sales, and the stock rallied 3.7% anyway.
Conclusion
Tuesday closed a session where the direction was clean and the internals were mostly cleaner.
A record close on the S&P 500, an optical-and-memory rally driven by policy tailwinds rather than earnings, a Palantir gap-up that held through the bell, oil breaking hard on Hormuz progress, and industrial capex getting a specific number attached to it via Caterpillar.
The after-hours setup then delivered the other side, two beats that got sold, because at these expectations, in-line-with-hype is a disappointment. Friday's payrolls print remains the setup input that matters. Until then, the tape has enough tailwinds to stay bid and enough after-hours weakness to keep anyone from getting complacent.
ChartMill Market Desk - Kristoff
This daily update is prepared by ChartMill for informational purposes only and does not constitute investment advice. Always do your own due diligence before making investment decisions.
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S&P 500 Prints Fresh Record As Chips Rip And Hormuz Talks Crack The Oil Trade
Two forces pointed the same way Tuesday and the tape went straight up. The datacenter-components import ban story out of Reuters lit the optical, memory and accelerator names before the open, the Palantir print from Monday night gapped the stock nearly 30% at the bell, and a sharp drop in crude on fresh Hormuz-talks headlines gave the long end of the curve room to breathe.
The S&P 500 closed at a fresh record. Then after the bell AMD reported, guided above consensus, and lost 6%. SpaceX filed its first quarterly print as a public company, doubled the top line, and also traded down. Let me walk you through the split.
The Rundown
The Chip And Optics Complex Took The Day
The story that mattered before the open was Reuters reporting the US intends to restrict imports of Chinese-made components used in datacenter builds. That headline hit the domestic supply chain like a demand signal.
COHERENT CORP (COHR | ???12.35%) and LUMENTUM HOLDINGS INC (LITE | ???8.92%) - the two names that own most of the optical transceiver and pump-laser conversation for high-bandwidth AI interconnects - did the biggest moves. CIENA CORP (CIEN | ???5.21%) got carried along on the same read; the coherent-optics and packet-networking gear story sits directly in the same hyperscaler capex conversation.
Memory and accelerators followed.
MARVELL TECHNOLOGY INC (MRVL | ???12.81%) led the group, MICRON TECHNOLOGY INC (MU | ???7.62%) picked up on the same thread, and ADVANCED MICRO DEVICES (AMD | ???7.00%) rallied into its own after-close print.
Whether or not the actual ban lands in the form the Reuters piece described, the message the tape delivered is that any policy that pulls Chinese-made hardware out of the US datacenter supply chain is a straight transfer of demand to the domestic names and the market is not waiting for the final rulemaking to price that in.
Hormuz Talks Cracked The Crude Trade And The Inflation Backdrop With It
WTI dropped 6.3% to $75.30 and Brent gave up 5.9% to $78.83 after Treasury Secretary Scott Bessent told CNBC an agreement to reopen the Strait of Hormuz could land "today or tomorrow," with Iran reportedly considering letting European countries clear the mines. Crude is now down roughly 16% over four sessions. That is the kind of move that resets the second-half inflation setup, a normalised energy tape pulls headline CPI expectations lower, which is exactly what the long end of the curve keyed off of.
For anyone building a soft-landing picture into September, this is the swing input. The Fed does not need a lot more good inflation data to stay patient at the September meeting; a sustained oil unwind gives them exactly that.
Palantir Gapped Up 29% On Its "Alien" Quarter
PALANTIR TECHNOLOGIES INC-A (PLTR | ???29.45%) opened sharply higher and never gave much back after Monday night's print. I covered the details of the quarter in yesterday's note, the 149% US commercial growth, the roughly billion-dollar guide raise, Alex Karp's "alien quarter" phrasing that is on-brand to the point of parody.
The important thing on Tuesday is that the tape kept the gap open through the session. When a name this size holds a 29% one-day move without fading into the close, it tells you the sell-side had underwritten conservative and the funds that missed it are chasing.
The overhang I flagged Monday hasn't changed. The market cap is unforgiving on any traditional metric, and the political entanglement is a real drag on the international book. But the commercial acceleration is not a story anymore, it is the number.
Caterpillar's Energy Division Is The New Story
CATERPILLAR INC (CAT | ???5.60%) beat and took the tape's attention on the strength of its energy division. The generators-for-datacenters line is what drove the print, which is the second-order AI capex trade, Caterpillar sells the picks and shovels to the picks and shovels.
Every hyperscaler that commits another twelve figures of AI capex has to power that hardware, and the standby generator market is not something you scale overnight. This is a slower-moving read on the same theme, and it puts a specific number on the industrial pull-through.
McDonald's Pushed Out Its US Chief, Same-Store Comps Told The Story
MCDONALD'S CORP (MCD | ???1.17%) tacked on 1% but the news was Joe Erlinger being pushed out of the US leadership seat, with COO Skye Anderson taking over.
US same-store sales grew 0.8%, the weakest print since early 2025, and CEO Chris Kempczinski framed it as an execution problem, not a strategy one. Too many product launches slowed service, marketing tied to the World Cup underperformed, and the 50,000-restaurant global target got pushed to 2028 on higher build costs.
I would take Kempczinski's framing at face value. The strategy is not broken; the operational discipline is. Executive changes at this level of a franchise system take two to four quarters to show up in comps. The stock is down 13% year-to-date, and that is not a setup that turns on one leadership swap. It is a setup that turns on two consecutive quarters of comp reacceleration.
After The Bell: AMD Beat And Lost 6%, SpaceX Doubled Revenue And Lost Ground Too
Here is where the day got interesting.
ADVANCED MICRO DEVICES (AMD | ???7.00%) reported Q2 revenue of $11.54 billion (consensus $11.31 billion) and adjusted EPS of $1.66 (consensus $1.62). Datacenter revenue doubled to $6.7 billion. The Q3 revenue guide came in at roughly $13 billion versus a $12.6 billion consensus.
Every headline number cleared the bar. The stock still dropped 6.6% in the after-hours session, giving back Tuesday's regular-session gain.
The read: expectations for the AI accelerator names have run so far ahead of consensus that clearing the sell-side print is not enough anymore. The market wanted a blowout, and a beat-and-slightly-raise doesn't qualify. AMD is up more than double year-to-date, and that is the frame you have to price this against, not the analyst tape.
SPACE EXPLORATION TECHN-CL A (SPCX | ???9.43%) filed its first quarterly report since June's IPO.
Musk said on the call to expect the rest of the year to run at that same rate, which implies roughly $65 billion in 2026 capex against $95 billion in end-of-June cash. That is a burn rate that eats the war chest inside two years unless the AI capacity monetises fast. Musk's claim was that AI investment recovers "inside a year" via server capacity rentals to third parties like Anthropic and Google. The stock traded down about 6.5% in the after-hours window.
Macro: Factory Orders Missed, Trade Deficit Narrowed, JOLTS Softened
Three data points landed and none of them changed the read materially. June factory orders fell 0.3% against a consensus of +0.2%, though May was revised up (from +1.1% to a firmer read). The June trade deficit narrowed by nearly 6% on imports falling faster than exports, which is a Q2 GDP tailwind mechanically, but not a great signal on end demand. JOLTS ticked lower on job openings.
None of this reshapes the setup into Friday's payroll print, which remains the number that shapes the September FOMC. The macro tape is soft-enough-but-not-cracking, which is exactly what the equity market has been trading on for six weeks.
Pharma And Consumer: Merck Beat, Pfizer Lifted The Floor, Kimberly-Clark Cut Guidance
MERCK & CO. INC. (MRK | ???0.18%) beat on both lines on continued Keytruda strength, even absorbing the cost of a recent acquisition. The stock finished slightly higher. PFIZER INC (PFE | ???1.52%) raised the low end of its full-year revenue outlook on non-Covid pharma growth and beat Q2 estimates but still finished down 1.3%, the tape wanted the top end raised too, not just the floor.
KIMBERLY-CLARK CORP (KMB | ???3.73%) cut its 2026 profit outlook after quality allegations around its diapers dented China sales, and the stock rallied 3.7% anyway.
Conclusion
Tuesday closed a session where the direction was clean and the internals were mostly cleaner.
A record close on the S&P 500, an optical-and-memory rally driven by policy tailwinds rather than earnings, a Palantir gap-up that held through the bell, oil breaking hard on Hormuz progress, and industrial capex getting a specific number attached to it via Caterpillar.
The after-hours setup then delivered the other side, two beats that got sold, because at these expectations, in-line-with-hype is a disappointment. Friday's payrolls print remains the setup input that matters. Until then, the tape has enough tailwinds to stay bid and enough after-hours weakness to keep anyone from getting complacent.
ChartMill Market Desk - Kristoff
This daily update is prepared by ChartMill for informational purposes only and does not constitute investment advice. Always do your own due diligence before making investment decisions.
Read full article here »