New Highs Hit Early Despite SpaceX, AMD Weakness

Published as of: August 5, 2026, 9:13 a.m. ET

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(Wednesday market open) The earnings-driven boom that lifted stocks to record highs Tuesday took another step forward early today, side-stepping investor disappointment with results from SpaceX (SPCX) and Advanced Micro Devices (AMD) after both fell sharply despite beating analyst estimates. Away from home, crude oil ticked up following fresh attacks on Middle East shipping by Iran's allies while President Trump said a short-term deal to open the strait may be near.

The earnings parade continued early today, led by Walt Disney (DIS) and Eli Lilly (LLY). Both impressed, judging from early stock moves. Memory chip firms Western Digital (WDC) and Sandisk (SNDK) report later. In data, private sector July jobs growth tracked by ADP fell short of expectations at 44,000, dominated by service sector positions. Analysts had expected 75,000. This precedes Friday's July nonfarm payrolls report that's expected to show 86,000 jobs added, up from 57,000 in June. The government report doesn't often correlate with the ADP data, so today's shortfall doesn't necessarily indicate another one Friday.

Tuesday was among the year's strongest days. Major indexes hit new record highs on hopes of Middle East progress and another round of powerful earnings reports. In a healthy sign that the move might have legs, about 71% of S&P 500 stocks trade above their 200-day moving averages, up from 55% in June when indexes last peaked. This suggests a broader slice of names attracting interest, not just the chip stocks that propelled things last spring. That said, info tech's 4% gain Tuesday provided most of the torque.

1. Slowing U.S. sales growth shakes McDonald's: In a sign of how tough the fast-food business is amid high gas prices and appetite-curbing obesity drugs, McDonald's (MCD) announced yesterday it's replacing its U.S. president after slower quarterly sales growth last quarter. Sales at established U.S. McDonald's restaurants rose just 0.8%, the worst in over a year. Joe Erlinger, who was U.S. president for about seven years, got replaced by Skye Anderson after the news, Bloomberg reported. However, under Erlinger, things seemed to be improving before the latest quarter. U.S. comparable first quarter annual sales growth of 3.9% slipped from 5.7% in the fourth quarter but were among the best recent showings in the category. Still, the company cited failed marketing programs and slower service that hurt customer satisfaction in U.S. restaurants. McDonald's has emphasized value items to drive customer traffic, Bloomberg reported, but not enough U.S. restaurants executed on the pricing. Erlinger's departure from McDonaldland comes with shares down 13% so far this year.
    
2. Valuations fall, but how long can earnings soar? The meteoric 47% year-over-year anticipated S&P 500 second quarter earnings growth reinforces ideas that current market valuations may be justified. In fact, earnings are growing so quickly that valuations have fallen. The S&P 500's forward price-to-earnings (P/E) ratio is below 20, FactSet said, down from 22 at times over the last year. While the market seldom moves based on P/E, it's worth noting that the SPX now has a forward P/E of 19.6, below the 19.9 five-year average. Looking ahead, it might be tough for companies to maintain this kind of earnings growth pace, meaning challenging comparisons down the road could weigh on stock price growth. Another concern is consumer spending, a huge factor for earnings. The savings rate is down dramatically, leaving some to wonder how much is left in the tank. From a bullish perspective, much of the recent "hard" data, meaning jobs and retail sales numbers, has been solid. The soft data, like confidence, hasn't been, but people appear to be telling the survey takers one thing and then doing another.
    
3. Burden of high expectations strikes again: One theme this earnings season and last is companies losing steam on Wall Street even while reporting strong earnings. That happened again yesterday with Advanced Micro Devices and to some extent SpaceX, both of which beat consensus expectations and saw their shares damaged early today. Investors might have been playing the market equivalent of the telephone game, focusing on "whisper numbers" well above FactSet's consensus that didn't get reached. AMD fell more than 8% and SpaceX lost 10% early. The rub for AMD was guidance that improved but possibly not by as much as the whisper numbers suggested. For SpaceX, with narrower losses and stronger-than-expected revenue, investors appeared to take issue with heavy AI capital spending forecasts, though this could support the AI sector. With valuations set high for both coming in, winning the telephone game likely became more important, and possibly holds true for high-multiple firms like Western Digital and Sandisk when they report later. One question for executives of those two is how long the global memory shortage might last, as it clipped Apple's (AAPL) outlook and hit shares of that giant last week.

• Eli Lilly climbed nearly 5% ahead of the open. Earnings per share of $8.38 were $2.37 above the FactSet consensus, and revenue rose 47.7% annually to $22.97 billion. Consensus was $20.69 billion. Sales of Mounjaro rose 91% annually and Zepbound saw U.S. revenue rise 44%. Lilly raised fiscal 2026 revenue guidance to above consensus levels.
   
• Disney added almost 3% in early action after earnings per share topped consensus by $0.20 and revenues came in as expected. The company reaffirmed its fiscal 2026 guidance. The entertainment and theme park divisions performed well.
   
• Nvidia (NVDA) climbed 1.5% early after SpaceX CEO Elon Musk said SpaceX will exclusively use Nvidia's chips for AI services, Yahoo Finance reported.
   
• Arista Networks (ANET) climbed 9% early following earnings that topped consensus and a forecast for above-expected quarterly revenue.
   
• Uber (UBER) dropped more than 3% despite earnings and guidance that generally came in as expected. Gross bookings rose 22% annually, outpacing first quarter growth.
   
• Shopify (SHOP) surged 27% ahead of the open, catapulted by an earnings beat and its forecast for better-than-expected revenue in the current quarter.
   
• Booking Holdings (BKNG) climbed 9% early after an earnings beat. The company reaffirmed guidance.
   
• The Cboe Volatility Index (VIX) rose 2% early and crude also climbed, both factors worth monitoring as they diverge with early strength in stocks.
   
• Novo-Nordisk (NVO) plunged 6% Tuesday after quarterly sales of its Wegovy weight loss drug fell short of expectations.
   
• Chipotle (CMG) slid nearly 10% Tuesday on media reports that the company has removed certain jalapeńos from stores linked to salmonella cases in Minnesota.
   
• From a technical perspective, the S&P 500's drop below its 50-day moving average last week followed by this week's solid breakout above the moving average is likely constructive and could be driving some short covering. The index had hugged the 50-day line  most of June and July and is now farther above it than it had been since early June. Support could be in the 7,595-7,610 range, Briefing.com said.

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Fewer Fed meetings to monitor? One idea of new Fed Chairman Kevin Warsh is to hold fewer interest rate-setting meetings. Market implications of such a move are one topic addressed by Schwab's latest Washington, What to Watch Now article. The analysis by Michael Townsend, managing director of legislative and regulatory affairs at Schwab, also examines the election outlook with three months to go and a new bipartisan Senate deal designed to help Congress avoid a fall shutdown.

The percentage of S&P 500 stocks trading above their 200-day moving averages ($SPXA200R—candlesticks) hit 70.34% on Tuesday, up from a recent low of 40.92% last spring and above the 50-day moving average of 61.97% (blue line). This wider breadth reflects better performance across more sectors of the market, and compares with breadth of below 55% back in early June the last time the market made new highs before Tuesday.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

August 6: Preliminary second-quarter productivity and expected earnings from ConocoPhillips (COP), Cloudflare (NET), and Airbnb (ABNB). 
August 7: June nonfarm payrolls, hourly earnings, and unemployment rate. 
August 10: Expected earnings from Barrick Mining (B), Rocket Lab (RKLB), Hims & Hers Health (HIMS), and Ferguson Enterprises (FERG).
August 11: July existing home sales and expected earnings from Cardinal Health (CAH), Lumentum (LITE), CoreWeave (CRWV), and Super Micro Computer (SMCI).
August 12: July Consumer Price Index (CPI) and core CPI, and expected earnings from Nebius Group (NBIS), Cisco (CSCO), and Cerebras Systems (CBRS).