Tensions in the Middle East escalated Tuesday as US forces struck Iranian targets near the Strait of Hormuz, prompting Tehran to vow retaliation against American interests in the region. Separately, Dell Technologies reported stronger-than-expected quarterly results and raised its full-year outlook.
Tuesday's market-moving headlines include fresh US-Iranian hostilities, a potential shift in US support for a stronger yen, Dell's AI-driven earnings beat, SpaceX internal restructuring, and slowing US factory growth.
US-Iran Conflict Intensifies: US Strikes Iran, Tehran Vows Missile and Drone Retaliation
In their latest exchange, US forces struck Iranian Islamic Revolutionary Guard Corps targets around the Strait of Hormuz, while Tehran claimed to have launched retaliatory strikes on American military interests in the region. Reports noted explosions over the southern Jordanian city of Aqaba, which Iran described as retribution for the US assault. The cause of the blasts and whether Iranian missiles or drones struck their intended targets remains unclear.
The US Central Command said American forces began hitting Iranian targets at midday Eastern Time, following recent attacks on commercial shipping in the strategic waterway and on US personnel in the area. The command did not immediately disclose the number or locations of the targets, nor the American assets involved.
President Trump described the action in a Truth Social post as "large and powerful," characterizing it as payback for Iran's attempts to lay mines in the Strait of Hormuz and its missile strike on a US base in Jordan.
US Signals Support for BOJ Intervention to Bolster Yen
Treasury Secretary Scott Bessent has repeatedly indicated that Japan needs higher interest rates to support its currency. Following his meeting with Bank of Japan Governor Kazuo Ueda, he reinforced that stance. Minutes released Tuesday show Bessent "strongly supports Japan's decisive market and monetary policy measures to address the yen's clearly undervalued exchange rate," also noting that yen weakness is intensifying domestic inflationary pressures in Japan.
The meeting took place Sunday in Asheville, North Carolina, on the sidelines of the Group of 20 finance ministers and central bank governors' gathering.
Dell Q2 Revenue Beats at $47B, AI Server Outlook Triples, Shares Surge 10%
Dell Technologies shares jumped 10% in after-hours trading Tuesday after the computer maker's results and guidance easily surpassed Wall Street expectations. Revenue came in at $46.97 billion, topping the forecast of $44.92 billion, while adjusted earnings per share of $7.04 beat the anticipated $4.92. Net income was $4.13 billion, or $6.34 per share, up from $1.16 billion, or $1.70 per share, a year earlier.
For the fiscal second quarter ended July 31, revenue grew roughly 58% year over year, exceeding all analyst projections. Adjusted EPS excludes stock-based compensation. For the third quarter, Dell expects adjusted EPS of $6.50 on revenue of $49 billion, implying 81% growth. Analysts had projected EPS of $4.49 and revenue of $41.42 billion. The company also sharply raised its full-year guidance, now forecasting adjusted EPS of $25.50 on revenue of $192 billion.
Musk Restructures SpaceX Data Center Leadership
Elon Musk has reorganized the team overseeing data center construction at SpaceX in recent weeks, replacing some key leaders with several executives from the company's rocket and satellite internet divisions. The move comes amid civil engineering concerns and ongoing reliability issues at SpaceX's existing AI data center facilities in Tennessee and Mississippi.
Executives joining the AI infrastructure team include Wesley Salandro, former vice president of production for SpaceX's Falcon and Dragon rockets, and Logan McConnell, head of product support operations at the company's Starbase launch site.
US Manufacturing Growth Slows But Remains Near Four-Year High
US factory activity expanded for an eighth straight month in August, though slower growth in new orders and employment pointed to cooling demand. The Institute for Supply Management (ISM) said its manufacturing index fell 1 point to 54.6 last month, still the second-highest reading since 2022. A reading above 50 indicates expansion. The production gauge hit its second-highest level since late 2021, while the new orders index slipped to its lowest since March but remained in expansionary territory. Factory employment rose for a second consecutive month, though at a more modest pace.
Wells Fargo Joins JPMorgan in Cautious Stance on US Stocks
Wells Fargo became the second major bank this week to turn more cautious on US equities, warning about September's outlook as markets enter one of the seasonally weakest months and midterm elections inject uncertainty into the AI trade. Analysts led by chief equity strategist Ohsung Kwon said investors are increasingly worried about the durability of the AI investment boom, with a "broadly cautious" tone expected to prevail through September. The team anticipates concerns over capital spending on AI infrastructure will peak in the coming weeks, though sentiment indicators remain more positive than negative after the mid-August selloff.
Kwon's team is not the only one adopting a more guarded stance. JPMorgan also shifted its equity view to "tactically cautious" on Monday, following hawkish comments from Federal Reserve Chair Kevin Warsh that boosted bets on further rate hikes this year.
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