Closing Recap

Thursday, July 16, 2026

U.S. stocks were lower on Thursday, with the S&P 500 and the Nasdaq Composite giving back gains from the earlier session amid weakness in global technology stocks as the AI/Data center/Semi trade further unwinds in July after massive runs the first half of the year. While tech tumbled (XLK -2.2%), the rest of the S&P 500 sectors put in solid showings with strong gains for defensives Consumer Staples (XLP +2.7%), REITS (XLRE +2%), and Healthcare (XLV +2%) behind better earnings results from UNH which kept major averages from unraveling. Attention turns to Netflix (NFLX) earnings tonight, once a Wall Street darling is down 29% this year. The US dollar edged higher along with Treasury yields after solid economic data as the Philly Fed Business Outlook and Jobless Claims beat estimates solidly, Retail Sales and Business Inventories were in-line, and Homebuilder Sentiment and Pending Home Sales missed. Stocks held strong this morning but gave way around noon as stock markets faded all afternoon heading into monthly option expiration on Friday. Stocks surged in the final minutes of trading to bounce well off the lows.

While broader markets held up well, with modest losses for the Russell 2000 Smallcaps, the AI trade has lost its momentum in July with steep drops in neoclouds NBIS, CRWV along with Ai/high-performance Computing (HPC) data centers WULF, HUT, CIFR, IREN, RIOT; Nuclear power names NNE, OKLO, TLN, SMR, NRG, CEG; opticals LITE, AAOI, GLW, CIEN, COHR tumbling; industrial power names CAT, BE, ETN and of course memory SNDK, WDC, STX, MU and semis NVDA, AMD, ARM, INTC among many others that have rallied in 1H’26. Mag 7 names have helped the Nasdaq with AAPL, AMZN, MSFT GOOGL rising lately though GOOGL shares tumbled on reports of Gemini delay. After hitting record highs this week post earnings, large cap banks turned notably lower with big declines in GS, JPM, MS and others. REITs strong as @MikeZaccardi notes “Real Estate $XLRE $VNQ $IYR 4yr highs… close to the best day since April 2025”.

Dallas Federal Reserve President Lorie Logan became the first of Fed Chairman Kevin Warsh’s new colleagues to call publicly for an interest-rate hike, laying the groundwork for a possible dissent at the central bank’s next rate-setting meeting in just under two weeks. “Inflation has been too high, for too long, and does not appear to be on track all the way back to 2%,” Logan said in remarks prepared for delivery in Houston. “I currently believe modestly higher interest rates would better balance the outlook and risks for the FOMC’s maximum employment and price stability goals.” Also, Kansas City Fed President Jeff Schmid said that inflation is proving persistent across a broad range of goods and services and remains the focus of monetary policy given a stable labor market. But he called current inflation running roughly double the Fed’s 2% target “concerning”, and said he disagreed with those who feel it is the result of one-time factors like high oil prices and is thus likely to dissipate on its own.

Investor sentiment data for the week: 1) This week’s NAAIM Exposure Index jumped to 95.64 from 82.95 last week and just below the 98.59 on 6/24 – which was the highest since the 100.7 on 12-17-25 – the 10-29-25 Reading of 100.83 is the 52 week hi – 2025 trough from 4-16-25 of 35.16 – Last Quarter Average (Q2) was 87.19 (down from 82.0 in Q1 and 92.26 in Q4). 2) The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 12% vs -0.9% last week. Bulls rise to 44.9% from 36.3%, Neutrals fall to 22.2% from 26.5%, Bears fall to 32.9% from 37.2%.

• Philadelphia Fed business conditions July surges to 41.4 (above consensus 13.0) and vs June 10.3; prices paid index July steady at 53.9 vs June 53.2; new orders index July 37.0 vs June 27.3; the employment index July 10.0 vs June 7.9; six-month business conditions July 34.4 vs June 50.2
• June Retail Sales rose +0.2% vs. est. +0.3% and up +1% prior in May while core retails sales, ex autos, fell (-0.2%) vs est. (0.1%) and vs May +1.0%. Retail sales, excluding gas and autos: +0.4% vs. +0.3% consensus and +0.8% prior (revised from +0.5%).
• Business inventories for May rose +0.3%, in line with consensus and vs. prior +0.6%; Business sales rose +2.1%, prior +1.4% and inventory/sales ratio:1.28 months, prior 1.30.
• Pending home sales: -5.4% vs -0.5% est, prior +3.5%; -0.3% YoY. NAHB homebuilder sentiment: 34 vs 35 est, prior 36. Homebuilder sentiment stayed below 40 for a 15th straight month, the longest stretch since 2012, with 37% of builders cutting prices. The NAHB cited high mortgage rates and economic uncertainty, noting rates are likely to stay elevated amid the renewed US-Iran conflict.

• U.S. WTI crude oil futures slipped -$0.65 or 0.82% to settle at $78.95 per barrel while Brent crude fell -$0.72 or 0.85% to settle at $84.23 per barrel, still on track for weekly gains as the US entered its 5^th day of attacks on Iran. Front-month gas futures for August delivery on NYMEX fell 6.6c, or 2.3%, to settle at $2.888 per million British thermal units (mmBtu), their lowest close since May 12.

• Beverage sector: in energy drinks, Stifel lowers its estimates on CELH reflecting weaker Celsius brand sales trends driven by SKU rationalization and a softer but improving performance in the core flavors. Stifel anticipate negative but improving performance in Celsius with Alani continuing to deliver solid growth. Stifel maintains its Buy rating for MNST raise its target price to $105.

• Home Furnishing: Wayfair Inc. (W) said it will hold a summer sales event next week that rivals Black Friday deals. The online retailer said the five-day sale (July 23-27) brings holiday-level savings across every home category, including early deals on home favorites like sofas, area rugs, and dining tables. Wayfair (W) also plans to unveil surprise flash deals that will drop throughout the event
• Mortgage Services; RKT was upgraded from Equal Weight to Overweight at Morgan Stanley noting with the stock off ~25% YTD and nearly 40% (as of July 14 close) since a peak earlier this year, the stock is trading more than a standard deviation below its historical average since the beginning of 2023 (~13.5x vs ~17.5x). In Mortgage finance, Deutsche Bank said they remain cautious on Q2 mortgage volumes despite strong results from banks. The firm believes current expectations for Q2 originations are inconsistent with the latest application data and ~20% too high, so it lowered its estimates for the non-bank originators it covers (RKT, PFSI and UWMC).

• Movie theatres: Wells Fargo downgraded both CNK and IMAX to Equal Weight from Overweight in reaction to the updated box office outlook and other factors. Wells now expects box office forecast $9.9B vs. the prior forecast of over $10B to reflect weaker Supergirl flow-through and softer Minions & Monsters and Moana results. It was noted that post Spider-Man, no +$100M domestic box office is expected to land at theaters until October.

• Pipelines & MLPs: Goldman Sachs initiated EE at Buy ($49 tgt) and NEXT at Neutral. Initiate EE – the largest global, public operator of floating regasification and storage infrastructure – at Buy, as expect it to benefit from structurally lower LNG prices later this decade, and as vertical integration could drive underappreciated margin expansion and cash flow. Also, initiate NEXT ($8.5 tgt) – a US LNG operator constructing at Neutral as its cash flow outlook appears less compelling.
• Power sector: Oaktree said they will invest $1.7B in deploying BE’s fuel-cell technology to help power AI cloud infrastructure, including dedicated electricity supply for NBIS AI computing operations. The investment will fund behind-the-meter power generation using Bloom’s fuel cells, allowing Nebius to meet growing demand for AI compute capacity, the companies said. Overall power/nuclear stocks were broadly lower with the Ai trade amid declines in VST, CEG, NRG, OKLO, SMR, TLN and others. Rough day for Early-stage nuclear fuel company STDN in its NYSE debut as shares opened at 413.50 after its 10M share IPO priced at $15 after slashing deal size by more than half.

• Crypto sector: stablecoin company CRCL, COIN shares fell after Visa (V) announced the Visa Stablecoin Platform, which it calls a new enterprise platform designed to help financial institutions, fintechs, and crypto natives access stablecoin capabilities through a Visa-managed environment
• In Banks: CFG Q2 EPS $1.30 vs. est. $1.25; Q2 revs $2.28B vs. est. $2.25B; Q2 PPNR of $889M, up 13% QoQ, up 24% y/y and average deposits up $2.3B, or 1% q/q; Net income climbed 35% y/y, company saw 4% sequential net interest income growth and 8% fee growth; sees Q3 NII up 2.5%-3.5% sequentially; HOMB Q2 adj EPS $0.64 vs. est. $0.61; and posts record $295.1M in revs vs. est. $289.22M rising 7% y/y; Q2 Total assets stood at $24.71 billion for the second quarter, up 8% from $22.90B y/y. USB posted a top and bottom line beat for Q2.
• Self-storage REIT sector: Raymond James resumed coverage of the self-storage sector with a positive outlook. While self-storage REITs have outperformed the broader REIT sector by 500bp YTD (the sector is up 21% YTD), all the outperformance has been driven by PSA (on an M&A spree) and NSA (takeout). EXR, CUBE, and SMA have all underperformed the broader REITs, which is where they see the opportunity. Valuations for those three (EXR, CUBE, SMA) remain at (or near) historical lows, which we believe is unwarranted given 1) stabilization in demand, 2) a moderating negative impact from new supply, and 3) meaningful dislocation in public vs. private market pricing.

• MRK’s said that the FDA had approved Lipfendra, the first oral PCSK9 drug for lowering high cholesterol. The medicine is generically known as enlicitide.
• Managed Care: after a brief sell off in the sector yesterday following better results/guidance from ELV as investors took profits post a big run in the space, UNH posted a beat and raise this morning as managed care stocks rebound. UNH Q2 revenue $112.0B vs. est. $110.8B and adj EPS $6.38 vs. est. $4.85; Q2 Medical Care Ratio (MCR) 86.7% vs. est. 88.6% and down -270 bps y/y; raises FY26 adj EPS to $19.50-$20.00 from over $18.25 and vs consensus $18.48; Q2 Optum revs fell -2% y/y to $65.7B.
• Medical Equipment sector: ABT posted a top and bottom line Q2 beat ($1.31/$12.6B vs. est. $1.28/$12.5B) and raised its 2026 adjusted EPS forecast to $5.45-$5.60 from prior view of $5.38-$5.58, above estimate of $5.49 saying demand for its heart devices expected to remain strong.
• MedTech sector: RMD was downgraded to Sector Perform from Outperform at RBC Capital saying the company faces a number of challenges in FY27, including device sales being impacted by replacing its Astral ventilators, higher costs of goods, and supply constraints on some component parts.

• Industrial sector: ABB Ltd. (ABBNY) agreed to acquire Rotork (RTOXF), the provider of mission-critical intelligent flow control solutions for £5.03/share ($6.81) in cash. Separately, ABB reported Q2 net profit rose to $1.23B from $1.15B in the year-earlier quarter, on revenue of $9.475B, up 12% Y/Y.
• Chemical sector: NTR was downgraded to Hold from Buy at Jefferies and lowers price target to $63 from $96 saying 2027-2029 outlook is likely more negative than positive due to weak farmer margins and supply pressure in potash while expects nitrogen prices to drift down by the end of next year, with the U.S.-Iran war likely winding down.
• Transport sector: JBHT shares rose as Q2 results came in ahead of forecast largely on the back of higher-than-forecast Intermodal margin as volumes outpaced forecasts (increased 10% Y/y) and the company continued to execute on cost out and productivity; Q2 EPS $1.91 tops est. $1.73 and revs rose 19% y/y to $3.5B vs. est. $3.241B; Q2 net income $181M vs. est. $163M; Q2 intermodal revs $1.75B. In airlines, UAL shares fell as posted Q2 beat ($1.99/$17.7B vs. est. $1.88/$17.62B), but shares slipped as sees Q3 adj. EPS $2.50-$3.50 vs. est. $3.59, as assumed fuel $3.69/gal, profit sharing accrual $135Mm-$220Mm raises low end of FY26 adj. EPS to $9.00-$11.00 (vs. est. $10.47).

• In Defense/Drone sector: AVAV was upgraded to Outperform at Raymond James with a $210 price target noting the stock is down 55% since March as EBITDA estimates have reset materially lower, while believes consensus expectations for AeroVironment are now significantly de-risked.

• AI sector: GOOGL shares fell late day after headlines that Google Gemini launch delayed as tech falls short of goals. Separately, GOOGL will have to help OpenAI and other AI rivals as well as online search engine competitors access its services to comply with EU rules curbing the power of Big Tech, EU regulators said as they set out the details of the requirements.
• Data Center sector: CSquare (CSQR) raised $1.05B in its U.S. IPO, selling 50 million shares at $21 apiece, below its marketed range of $23 to $27, valuing it at about $3.25B. Growing demand for AI computing infrastructure has boosted investor interest in data center operators, which are expanding capacity to meet demand for AI workloads. Broad weakness in HPC/data center today with IREN, CIFR, HUT, CLSK, WULF, RIOT and others falling.
• Media sector: NFLX is expected to report earnings tonight; shares are down ~20% YTD, amid a combination of concerns related to engagement trends, potential Ai-driven disruption to content creation and heightened competitive concerns post recent Media M&A per Bank America.
• Advertising sector: PUB raised its 2026 organic net revenue growth guidance to between 4.5% and 5%, up from its previous forecast of 4% to 5% and reported organic net revenue growth of 4.8% for the second quarter, beating analyst forecasts of 4.7% (OMC, WPP also higher in reaction).
• Optical sector AAOI, LITE, CIEN, GLW saw broad weakness again today, dropping far below 50 and 100dma moving averages after seeing broad weakness with Ai space, semis, data centers.

• TSM Q2 results beat as Revenue of $40.1B (+33% Y/Y) landed at the top end of guidance, EPS of $4.30 came in well ahead of the $3.81 consensus, and GM/OM of 67.7%/60.3% both exceeded estimates. Management leaned harder into a demand narrative centered on agentic AI, as roughly all x86, ARM, and RISC-V CPU makers are TSMC customers. 2026 revenue growth now seen slightly above 40% Y/Y (up from 30%+) and CapEx lifted to $60B–$64B (from $52B-$56B). Also announced plans to invest an additional $100B in U.S. semiconductor manufacturing, bringing its total U.S. commitment to $265B.
• Japan plans to purchase 27,500 of NVDA next-generation Rubin AI chips to develop a homegrown foundation AI model for robotics. The initiative will be led by newly established Noetra Corp.,
• U.S. trade regulators have launched a probe into Samsung Electronics (SSNLF) memory chips and products sold by Google, Nvidia, Broadcom and Super Micro Computer that use them after a complaint by Netlist alleging infringement of its patents – Reuters