Mid-Morning Look

Friday, July 31, 2026

It looked like it was going to be a strong day for US equities, with Nasdaq futures up over 1% in the overnight session thanks to positive earnings/cloud numbers from Amazon (AMZN +13%) and most sectors opening strongly, but as Treasury yields spiked back to 18 month highs, inflation fears renewed and erased all of the overnight gains. The 10-yr yield rose over 6bps to 4.738%, its highest since January 2025 while the long dated 30-yr yield rose 5.5bps to 5.26%, its highest since 2007. Several drivers of higher rates on the long end include: 1) Persistent inflationary pressures continue to keep real rates elevated, 2) expanding fiscal deficits and the associated rise in gov’t borrowing needs have increased the supply of longer-dated debt and 3) heavy bond issuance by major technology hyperscalers for data centers/AI infrastructure has added further competition for capital. The rising inflation/rate fears are having a broad impact thus far. Weaker Apple (AAPL) service and China numbers dragged the Dow component lower. Early on, nine of eleven S&P sectors are in negative territory led by biggest declines in materials (XLB -2%) while consumer discretionary (XLY +2.6%) the notable standout thanks in part to Amazon impact. Tech and Energy also early decliners. Oil prices rise, gold/silver fall with Bitcoin.

• Chicago PMI rose to 57.6 in July from 56.7 in June, beating the 55.0 consensus, while the Chicago Business Barometer, remained in expansionary territory for the third straight month but has cooled from its level of 62.7 in May.
• University of Michigan surveys of consumers 1-year inflation outlook final July 4.2% vs prelim 4.2% and final June 4.6% and 5-year inflation outlook final July 3.3% vs prelim 3.3% and final June 3.3%
• University of Michigan surveys of consumers sentiment final July 55.2 (consensus 54.0) vs preliminary July 54.4 and final June 49.5; current conditions index final July 54.8 vs prelim July 54.9 and final June 47.7 and expectations index final July 55.4 vs prelim July 54.0 and final June 50.7.

• E&C sector: after the sector surged Thursday behind better results from PWR and EME the group pressured early as MTZ shares slide after reported in-line Q2, rev. & EBITDA were in line (Comms margins were lower, offset by Pipelines) and provided 26E revised revenue, +$700M for ’26 (lower than $800M-$900M contribution from Superior) while lowered Comms by $375M (~20% for 2H) on timing delays. MYRG reported a strong quarter on revenue and C&I margins. Backlog growth was led by two large transmission project bookings (total in excess of $200M), which should start burring in 2H27. PWR was upgraded to Outperform with $800 tgt at Guggenheim after results this week.
• Chemicals: CTVA reported slightly softer than expected sales but a solid bottom line, coming in above our estimate. The company raised guidance by 2.5% at the midpoint, showing strength in the space vs peers; EMN Q2 adj EPS $1.97 vs. est. $1.82; Q2 revs $2.51B vs. est. $2.4B; Sales revenue increased 15 percent sequentially driven by strong volume growth across the company and disciplined price-cost management in our specialty businesses; expect Q3 EBIT to be higher; HUN Q2 EPS miss but revs beat while Q2 adjusted net income was flat vs. year ago loss citing higher volumes and pricing, but notes energy cost headwinds, especially in Europe; LYB Q2 adj EPS $4.3 vs. est. $3.41; Q2 sales and other operating revs $9.177B; says outlook could temporarily impact normal buying patterns; OLN reports miss and lower Ebitda guide as Q2 EPS loss ($0.12) vs est ($0.10), revenue $1.742B vs est $1.807B, adj EBITDA $191.3Mm vs est $184.8Mm, Q3 adj EBITDA guide $160Mm to $200Mm vs est $226.19Mm.

• AXTI +23%; shares surged after reported Q2 results that topped expectations, with revenue soaring 160% y/y and gross margin expanding to 44.9% from 8% y/y as highlighted record indium phosphide revenue, driven by strong demand for data center optical connectivity and AI infrastructure
• COHU +5%; reported a beat and raise quarter amid high performance compute demand; revenue of $149.0M (+19.1% QoQ), driven by Systems (+41% QoQ), with non-GAAP gross margin of 45.5% (ahead of guidance of ~44%, but -100bps QoQ) was lower on higher Systems as a % of sales.
• DXCM +11%; shares jumped after delivered a solid Q2 beat and raise as new patients globally were in line with the Q1 record, with sequential U.S. improvement; raised its 2026 revenue guide (up 11-13% y/y), and its margin outlook by 50bps at the midpoint (Adj. EBITDA 31.5-32.0%).
• ETN +3%; posted record sales, strong organic growth, and raised guidance which highlight robust Q2 performance; raises FY26 adjusted EPS view to $13.40-$13.60 from $13.05-$13.50 (est. $13.35); sees Fy organic growth of 11%-13% while sees Q3 organic rev. +13.5% to +15.5%, vs. est. +10.6%.
• MPWR +9%; Q2 sales of $980.6M (+21.9% q/q) coming in +9.0% higher than consensus $902.0M, driven by sequential growth across all six end markets; Upside was mostly driven by ED, which grew over 160% y/y, while strong growth was also seen in Comms (+78% y/y) and increased its ED growth outlook.
• REPL +74%; after the FDA’s panel of outside advisers voted to back results from a trial studying the company’s drug. REPL seeks accelerated approval for RP1 in combination with BMY’s Opdivo in advanced melanoma in patients whose tumors grew despite prior treatment, with a decision expected by August 2

• ALHC -18%; shares declined as Q2 results were good, with a sizable EBITDA beat (+$10M) driven by upside to membership and a lower MLR (~50 bps better) but raised 2026 EBITDA (+$4M at MP), less than the beat, reflecting clinical and operational investments in 2H.
• COIN -13%; shares fell as Q2 revs decline -14% to $1.22B and reported a Q2 loss of -$359.5M or (-$1.36) vs. a profit of $1.43B or $5.14 y/y marking a third straight quarterly loss, hurt by lower transaction revenue as transaction revenue drops 21% y/y to $599M from $764M a year earlier.
• KPTI -60%; after topline results from phase 3 trial; says plans to file an sNDA with the FDA in August 2026 for selinexor with ruxolitinib in myelofibrosis; application targets accelerated approval using SVR35 as a surrogate endpoint; the company will seek Priority Review.
• MTZ -17%; shares slide after reported in-line Q2, rev. & EBITDA were in line (Comms margins were lower, offset by Pipelines) and provided 26E revised revenue, +$700M for ’26 (lower than $800M-$900M contribution from Superior) while lowered Comms by $375M (~20% for 2H) on timing delays.
• MYGN -38%; shares tumble after Q2 EPS loss (-$0.25) vs. est. loss (-$0.06); Q2 revs fell -11% y/y to $190.7M below consensus $206.03M; Q2 Gross margin dropped 4.6% to 66.6%; operating loss narrowed to $38.9< Q2 test volumes slipped 1% to 379,000; cuts FY26 revs to $770M-$790M from $860M-$880M.
• NVO -10%; shares fell after saying a trial in cardiovascular drug ziltivekimab failed to provide major reduction risks. While ziltivekimab demonstrated target engagement and inhibition of the IL-6 pathway… this did not translate into major adverse cardiovascular events risk reduction versus placebo.
• RBLX -21%; after results and Q3 guidance that was substantially below expectations; management also withdrew annual guidance; was downgraded by several firms on Wall Street as believes the platform may be entering lifecycle decline as weakness broadens from new-user acquisition in Q1 to monetization in Q2; note Q3 guidance was 12.5% below expectations at the midpoint.
• RDDT -17%; shares fall despite beat and raise quarter (EPS $1.25 vs est $0.95/revenue $805Mm vs est $730.4Mm, +38.2% YoY) and Q3 revs better $860Mm-$870Mm vs est $829.1Mm but slight US DAU q/q decline and comments on search referral volatility are likely elevating fears around Google
• SYK -6%; shares fell as reported Q2 results that beat expectations on the top- and bottom lines while mgmt tightened its revenue guidance range for the year vs. raising numbers pressuring shares.