S&P500 and Dow Jones: Earnings and Oil Relief Push Stocks to Records

Earnings and Lower Oil Push S&P 500 Past 7,700

The S&P 500 and Dow opened at fresh records Wednesday and the rally is getting broader than it was a week ago.

The ADP employment report missed badly against the estimate, which takes pressure off the September hike case heading into Friday’s payrolls. Kashkari wants higher rates but the hiring data is not backing him up today. Lower crude near $75 on WTI is doing the rest. The Iran deal has not been signed but the market is trading as if the oil relief is enough for now.

The five-day run is the strongest since April 2025. The breadth is what separates it from July’s rallies when technology was doing all the lifting alone.

At 14:55 GMT, the S&P 500 is up 0.23%. The Nasdaq Composite added 0.01%. The Dow is higher by 538.66, or 1.00%.

Daily S&P 500 Index (SPX) Technical Analysis

The S&P 500 Index is sharply higher shortly after the opening on Wednesday. Since the benchmark index is in uncharted territory, there is no resistance. My only concern is that the vertical rally has put it well above the 50-day moving average after breaking out above it just four days ago. The nearest support is the former record high at 7620.90.

The best short-term top indication will be a daily closing price reversal top. This won’t change the trend, but it could alleviate some of the upside pressure if there is a minor pullback.

Daily Nasdaq Composite Index (IXIC) Technical Analysis

 

The Nasdaq Composite Index is edging higher on Wednesday. The market is in a strong position after crossing to the bullish side of the 50-day moving average at 25954.20, which is new support.

The shift in momentum from the move has put the index in a position to challenge the main top at 26788.62 and the record high at 27190.21.

Daily Dow Jones Industrial Average (DJI) Technical Analysis

The Dow Jones Industrial Average is sharply higher for a second session since crossing to the bullish side of its former record high at 53289.30. This level is new support.

The major support and trend indicator is the 50-day moving average at 51924.09. The Dow is currently about 2820.02 points above this indicator. To give this some perspective, the spread between the previous record high and the 50-day MA was at 2593.06 when the Dow topped at 53289.30. This indicates we may already be in overbought territory.

AI Stocks Split Between Revenue and Spending

The AI trade is still working but the market is getting selective about who deserves the bid. Nvidia rose 4% after Elon Musk said SpaceX would use Nvidia processors exclusively. Nvidia is selling the equipment. That is the cleaner side of the AI trade right now.

AMD fell 4% even after earnings came in slightly above estimates. The report avoided a disaster but it did not give buyers a reason to chase a stock carrying high expectations. SpaceX dropped 12% after its first public earnings report showed second-quarter capital expenditures surged sixfold to $18.4 billion, most of it going into AI infrastructure. Revenue growth does not matter as much when the spending required to produce it keeps accelerating.

More than 84% of S&P 500 companies have beaten estimates this quarter, and the market is still punishing the ones that cannot show earnings catching up to the investment.

Weak ADP Takes the Edge Off the Hike Trade

Private payrolls came in at 44,000 against a 75,000 estimate and down from 95,000 in June. Kashkari went out Wednesday and said rates need to go higher. The ADP number says otherwise.

The miss does not settle anything. Kashkari still has the inflation argument, corporate earnings are backing him up and the committee was one vote away from acting last week. But this is not the kind of hiring data that gets the rest of the committee to move with him. If Friday’s payrolls look anything like the ADP number, the September case gets harder to make. If payrolls come in firm, nobody is going to remember Wednesday’s miss.

What to Watch

The rally has earnings, lower oil and a weak ADP print working together. The risk is that the Iran story has not produced a deal and crude can reverse on one headline from Tehran. The S&P 500 is in uncharted territory above 7,700 and the Dow is already stretched above its 50-day moving average. A rally this steep invites a pullback even when the fundamentals support it.

Friday’s payrolls is the test. Soft hiring and weaker wages keep the bid alive. Strong wages hand the hawks the data they need and this rally has to prove it can hold above its breakout levels with the rate trade pushing back.

The market is finding reasons to buy outside of AI and that changes the character of the move. That kind of participation across healthcare, consumer and industrials gives the indexes a wider base than anything the market built in July.

The message from this week is direct. Companies showing AI revenue and margins are getting bought. Companies showing AI spending without a clear return are getting sold.

More Information in our Economic Calendar.