Closing Look - 7/21/26
Stocks rallied Tuesday as a rebound in chip names and a strong start to earnings...
Summary
Stocks rallied Tuesday as a rebound in chip names and a strong start to earnings season overpowered another round of US-Iran headlines.
The S&P 500, Dow, and Nasdaq all snapped Monday’s losing streak, with the Nasdaq leading on a semiconductor bounce.
General Motors (GM), 3M (MMM), and Halliburton (HAL) all beat estimates before the bell, while Danaher (DHR) tumbled despite a beat after trimming its growth outlook.
After the close, Capital One (COF) and Interactive Brokers (IBKR) both topped estimates, with more regional banks and insurers still to report tonight.
Nvidia (NVDA) disclosed a 9.3% stake in Nebius (NBIS), sending that stock soaring and reviving the AI-infrastructure trade a day ahead of Alphabet (GOOGL) and Tesla (TSLA) earnings.
Major Indices & Breadth
🟢 S&P 500 closed at 7,509.20, +0.89%, snapping Monday’s decline as chip stocks led a broad rebound.
🟢 Nasdaq Composite jumped 1.29% to 25,837.21, the best-performing major index on the day.
🟢 Dow Jones Industrial Average added 385.38 points (+0.74%) to 52,224.64, helped by MMM’s and GM’s earnings beats.
🟢 Russell 2000 climbed 1.53% to 2,987.40, outperforming the large-cap benchmarks as small caps joined the risk-on move.
🟢 All four major indices closed higher, a clean reversal from Monday’s broad-based decline.
🟢 Leaders
NBIS +18.78%
AMC +26.80%
ACHR +19.59%
IREN +19.57%
🔴 Laggards
DHR -10.99%
HAL -6.3%
Earnings
🟢 GM reported Q2 adjusted EPS of $3.57 (beat $3.20 est.) on revenue of $48.03B (beat $47.01B est.), and raised full-year adjusted EPS guidance to $12–$14 from $11.50–$13.50. Shares rose more than 5%.
🟢 MMM posted Q2 adjusted EPS of $2.40 (beat $2.25 est.) on revenue of $6.5B (beat $6.4B est.), with adjusted operating margins improving to 24.9%. MMM raised its full-year adjusted EPS view to $8.80–$8.95 from $8.50–$8.70. Shares jumped roughly 10%.
🔴 HAL beat on both lines — adjusted EPS of $0.55 (vs. $0.54 est.) and revenue of $5.71B (vs. $5.51B est.) — but shares fell roughly 6% after management warned the oilfield-services market is softening faster than expected, with Middle East revenue down nearly 11% on reduced regional activity.
🔴 DHR beat with adjusted EPS of $1.94 (vs. $1.84 est.) on revenue of $6.27B (vs. $6.1B est.) and raised full-year EPS guidance to $8.45–$8.60. Shares still fell nearly 11% after the company trimmed its full-year core-revenue growth range to 3%–4% and guided Q3 core growth to just 2%–3%, with bioprocessing order timing clouding the outlook.
🟡 Charles Schwab (SCHW) beat with adjusted EPS of $1.62 (vs. $1.55 est.) on record revenue of $7.07B, up 21% YoY, and record client assets of $13.08 trillion, but shares were roughly flat to slightly lower on higher-than-expected expenses.
🟢 COF, reporting after the close, posted adjusted EPS of $5.81, well above the $4.69 estimate, on improved credit performance and a lower net charge-off rate of 3.23%.
🟢 IBKR, also after the close, posted EPS of $0.69 (adjusted and reported), above the roughly $0.63–$0.64 estimate, on net revenues of $1.90B versus $1.48B a year ago.
🟡 Still to come tonight: Chubb (CB), Western Alliance (WAL), EQT (EQT), Range Resources (RRC), Alaska Air (ALK), and Annaly Capital (NLY).
AI
🟢 NVDA disclosed a 9.3% passive stake in Nebius (NBIS) — roughly 22.3 million Class A shares worth about $5 billion — largely tied to the $2B warrant investment it announced earlier this year. NVDA rose about 2% on the day.
🟢 NBIS itself surged 18.78%, its best session in months, as the disclosure underscored NVDA’s deepening commitment to the neocloud provider.
🟢 Peers rallied in sympathy: CoreWeave (CRWV) jumped 8%, and Oracle (ORCL) added 5%.
🟡 The move comes a day ahead of GOOGL and TSLA earnings (see Tomorrow’s Calendar), which markets are treating as the next major test of AI capex sustainability after last week’s chip-stock selloff.
Corporate
🟡 Novo Nordisk (NVO) sued Eli Lilly (LLY) in US federal court, accusing the drugmaker of false advertising over claims that its weight-loss drugs outperform Novo’s treatments.
🟢 Taiwan Semiconductor Manufacturing (TSM) shares popped more than 3% after a report that the foundry will raise chipmaking-service prices by up to 10% next year.
🟡 GM repurchased $2 billion of stock during the quarter, retiring roughly 24.9 million shares (see Earnings).
🟡 Cracker Barrel (CBRL) completed a sale-leaseback of 26 company-owned locations, netting roughly $77 million, and updated its fiscal 2026 outlook.
Market Structure
🟡 No major S&P 500, Dow, or Nasdaq-100 membership changes took effect today. SpaceX’s (SPCX) path toward eventual S&P 500 inclusion remains on hold pending profitability and seasoning requirements, with the near-term structural story still centered on its Nasdaq-100 and Russell index weightings.
Macro/Policy
🟡 Markets now price roughly a 55% chance of a Fed rate hike in September, up from about 51% a day earlier, as elevated oil prices keep inflation risk in focus even after recent soft CPI and PPI prints.
🔴 The White House imposed fresh 50% tariffs on a range of Canadian goods — including autos, dairy, and alcohol — set to take effect in 30 days; Canadian energy imports were exempted.
🟡 ADP data showed private-sector hiring slowing for a fourth straight week, averaging 16,500 jobs per week over the four weeks through July 4, down from 24,250 three weeks earlier.
Treasury Bonds
🔴 The 10-year Treasury yield rose to about 4.59%, holding near its highest levels of the year as energy-driven inflation concerns persist.
🔴 The 30-year yield pushed above 5.1%, also elevated versus its decade average near 3.2%.
🔴 The 2-year yield held around 4.18%–4.2%, keeping the curve broadly flat-to-modestly-steep as rate-hike odds firmed.
Geopolitics
🔴 The US carried out a 10th consecutive night of strikes on Iran, with President Trump vowing Tehran “will pay” for attacks that killed American service members.
🔴 A tanker carrying oil products was reportedly struck near the Strait of Hormuz, adding to shipping-risk concerns.
🔴 Yemen’s Houthi militants threatened a naval blockade against Saudi Arabia, raising fears over Red Sea shipping routes.
🟡 Despite the escalation, reports of mediators pushing for a possible 10-day ceasefire helped cap oil’s gains and supported the broader risk-on tone in equities.
Foreign Markets
🟢 Japan’s Nikkei 225 jumped 3.26% to 66,232.19 as trading resumed after a holiday, led by chipmakers.
🟢 South Korea’s Kospi surged 3.56% to 6,747.95 on chip-sector strength.
🟢 Mainland China’s CSI 300 rose more than 3% to 4,739.23.
🟡 Hong Kong’s Hang Seng added 0.25%.
🟡 Europe was mixed: Germany’s DAX and France’s CAC 40 posted modest gains while the UK’s FTSE 100 slipped.
Currencies
🟡 The US Dollar Index (DXY) was roughly flat, hovering near 101.1, as safe-haven demand and firm Treasury yields offset diminished rate-hike urgency.
🔴 EUR/USD slipped toward the 1.14 area, extending its bearish bias against the firmer dollar.
🟡 USD/JPY and GBP/USD were little changed on the session, with broader FX flows dominated by dollar and yield dynamics.
Commodities
🟢 WTI crude jumped 2.47% to $84.52, extending gains for a third straight session on Strait of Hormuz supply concerns (see Geopolitics).
🟡 Brent crude eased slightly to about $88.87, down 0.4% but still near its highest level in more than a month.
🟢 Gold rose 1.77% to $4,087.10 as safe-haven demand returned alongside the dollar’s modest firmness.
🟢 Silver surged 4.93% to about $59.17, outpacing gold on renewed industrial and investment demand.
Crypto
🟢 Bitcoin (BTC) rose 1.68% to $66,426.76 as risk appetite broadly returned across markets.
🟢 Ethereum (ETH) climbed roughly 4% to the $1,930–$1,940 range, its best levels of the week.
Prediction Markets
🟡 Polymarket traders put the odds of a Fed rate hike in September at roughly 55%, up from about 51% the prior day (see Macro/Policy).
🟡 A separate Polymarket contract pricing whether the US will invade Iran before 2027 sits at about 31%, reflecting continued but contained escalation risk (see Geopolitics).
Volatility
🟢 The VIX tumbled 8.58% to 17.05, reflecting today’s broad risk-on tone even as Middle East tensions persist.
🟡 With GOOGL and TSLA reporting tomorrow night, front-end volatility is likely to stay bid into Wednesday’s close.
Tomorrow’s Calendar
Earnings after the close: GOOGL, TSLA, Texas Instruments (TXN), and ServiceNow (NOW) all report — the single biggest earnings night of the week.
Economic data: weekly EIA crude oil inventories, June existing home sales, and MBA mortgage applications.
Fed speakers are in blackout ahead of next week’s FOMC meeting (July 28–29).
3 Scenarios
🟢 Bullish: GOOGL’s cloud growth and capex guidance reassure investors that AI infrastructure spending is translating into revenue; TSLA delivers on margins; chip stocks extend today’s rally into Wednesday’s close.
🟡 Neutral: GOOGL and TSLA deliver mixed results — solid headline numbers but cautious forward guidance — leaving indices to digest earnings without a clear follow-through in either direction.
🔴 Bearish: GOOGL’s cloud capex guidance disappoints and reignites the AI-spending-sustainability concerns that drove last week’s chip selloff; a fresh Iran escalation sends oil and yields higher simultaneously.
Final Take
Tuesday looked like the mirror image of Monday — chip stocks led instead of lagged, and earnings beats from GM, MMM, and COF gave the tape a reason to grind higher even with the Iran conflict still running hot.
NVDA’s disclosed stake in NBIS did double duty, both confirming the depth of NVDA’s AI-infrastructure bets and giving the whole neocloud complex a lift into a week that’s about to be defined by GOOGL’s and TSLA’s numbers.
Not every beat was rewarded — DHR and HAL both topped estimates and still sold off hard, a reminder that guidance, not the quarter just finished, is what’s moving stocks in this market.
Bottom line: today’s rally bought the market a day of breathing room, but Wednesday’s after-the-bell reports from GOOGL and TSLA will do more to set the tone for the rest of the week than anything that happened in this session.
Source: CNBC, Yahoo Finance, TheStreet, Reuters, Trading Economics, GuruFocus, Benzinga, Seeking Alpha, Polymarket.
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