MARKET SNAPSHOT
U.S. stocks were mixed. Demand for Treasurys held up, sending yields down for the third consecutive session, as hopes of a diplomatic solution for the U.S.-Iran conflict pushed oil prices lower. The dollar fell as gold and silver also settled lower.
MARKET WRAPS
EQUITIES
U.S. stocks finished mixed as a rout in chip stocks continued while falling oil prices boosted consumer stocks.
The Dow Jones Industrial Average rose 1.03%. The broad S&P 500 added 0.21% while the tech-heavy Nasdaq Composite slipped 0.22%.
Investors had piled into memory chip makers such as Samsung Electronics and U.S. peer Micron for much of the first half of this year, inspired by what appeared to be boundless demand for their products from data centers.
Recent developments have revealed the potential bounds for that demand. First, there is the fear of new competition, brought into focus by the initial public offering of a Chinese memory-chip maker, ChangXin Memory Technologies, in Shanghai this week. The second fear revolves around data-center financing. Formerly, data centers were financed by the tech companies' cash on hand. In recent weeks, Alphabet, Meta and other "hyperscalers" have turned to stock-and-bond offerings to keep the arms race going. On Monday, investors balked at Nvidia's plan to act as a backstop in OpenAI's financing of an Ohio data center. Skeptics viewed the maneuver as an attempt by the chipmaker to stoke demand for its own products.
Asian stocks fell earlier Tuesday, with South Korean markets leading the losses amid growing concerns over spending linked to the AI boom.
The Kospi, heavily exposed to memory chip makers, ended 11% lower as SK Hynix dived 15% and Samsung declined 13%.
Japan's Nikkei Stock Average ended nearly 4% lower and Taiwan's Taiex shed 4.7%.
Chinese stocks also ended the day lower. The Shanghai Composite Index declined 1.2% and the Shenzhen Composite Index fell 3.2%. The tech-heavy ChiNext Price Index plunged 7.35%, marking its largest daily percentage loss since April 2025.
Stocks in Australia rose, as the S&P/ASX 200 Benchmark Index gained 0.6%. In New Zealand, the S&P/NZX 50 Index increased 0.1%.
COMMODITIES
Oil futures extended their slide to three sessions as the pause in U.S. strikes on Iranian targets kept alive expectations for a return to negotiations and a reopening of the Strait of Hormuz.
Disputes over control of the strait have been at the center of the recent flare-up. "For now the market is pricing a temporary calm," Phil Flynn of the Price Futures Group said in a note. "Any credible path toward de-escalation and freer flows through Hormuz would ease one of the biggest risk premiums hanging over crude."
WTI settles down 4.1% at $79.26 a barrel, and Brent falls 4.8% to $84.09.
Gold and silver prices settled lower as sentiment improved thanks to a lull in fighting between the U.S. and Iran.
Petros Pantzari of Monaxa said easing tension is "draining the geopolitical risk premium from markets, helping push Brent and gold lower as traders unwind both supply-disruption fears and defensive safe-haven positions."
Front-month gold settled off 0.9% to $4,036.30 a troy ounce, while silver finished 2% lower at $57.296/oz.
TODAY'S TOP HEADLINES
U.S. Consumer Sentiment Edged Down in July, Conference Board Says
Consumer confidence declined in July as consumers' assessment of current business and labor-market conditions softened for a third straight month, a monthly survey from The Conference Board said.
The research group said Tuesday its consumer confidence index fell to 90.8 in July from an upwardly revised 92.2 in June. Economists polled by The Wall Street Journal had expected a higher reading of 92.0.
Consumers' assessment of current business and labor-market conditions fell by 3.6 points to 114.9. Meanwhile, the expectations index, based on short-term outlook for income, business and labor market conditions, remained unchanged at 74.7.
Home Prices Show No Sign of Retreating-but Not Everywhere
Home prices show no sign of scaling back, but some cities are taking harder hits than others. It's all about listings.
The S&P Cotality Case-Shiller home price index measuring changes in 20 large metropolitan areas rose 1.6% year-over-year in May, higher than the estimated 1.2% increase.
May's increase outpaced the revised 1.2% gain in April. Nationally, home prices rose 1.1% year-over-year, compared with 0.8% in April.
Iran and Oman Seek Agreement on Hormuz in Bid to Jumpstart Peace Talks
A lull in fighting between the U.S. and Iran has accelerated diplomacy aimed at a short-term fix for the most contentious issue of the war-restarting shipping through the Strait of Hormuz.
Iran and Oman huddled throughout the weekend and into Monday to hammer out an arrangement for ships to safely pass through a waterway that carried 20% of the world's oil production before the war slowed traffic to a crawl.
The narrowly focused talks aren't meant to end the U.S.-Iran conflict once and for all, but mediators hope even a temporary agreement on an important issue could cool tempers, allow a lifting of maritime blockades and ultimately juice talks on implementing a preliminary peace deal that Washington and Tehran reached in June.
The Price to Finance the AI Data Center Boom Is Rising, Just Ask Meta
Meta Platforms is counting on Wall Street to pick up the tab for a massive artificial-intelligence spending spree. It picked a time when lenders' wallets are starting to feel light.
A borrowing binge this year for big tech companies is giving debt investors fatigue and pushing up the cost of capital across the industry. Lenders on Monday demanded higher yields on bonds from a new data-center project in El Paso, Texas, leased by Meta compared with a similar project last year. Concerns about more AI-adjacent debt coming, especially after an aggressive spending forecast from Alphabet's Google last week sparked a selloff in tech stocks and helped push down prices of bonds from companies like Microsoft and Amazon.com in recent days.
The supply of new bonds this year from AI companies already reached $270 billion in early July, almost double what was raised in all of 2025, according to Bank of America Global Research. Despite the investor indigestion, the data-center boom looks poised to create even more new debt, even if it ends up being more expensive, since no player wants to risk falling behind in the AI arms race.
Ford Posts Earnings Beat. Its Outlook Is Improving.
Ford Motor reported better-than-expected adjusted second-quarter operating profit and raised its full-year financial guidance; both good things for investors.
Shares of the car maker rose 4.1% in after-hours trading to $15.58. They gained 1.9% in regular trading, closing at $14.96, while the S&P 500 rose 0.2% and the Dow Jones Industrial Average gained 1%.
Tuesday evening, the Detroit car maker announced an operating profit of $2.5 billion from sales of $48.3 billion. Wall Street was looking for second-quarter operating profit of $2.1 billion from sales of $47.2 billion. A year ago, Ford reported an operating profit of $2.1 billion from sales of $50.2 billion.
Visa Is Slashing 2,600 Jobs as It Adapts to Changing Payments Industry
Visa is cutting 2,600 jobs, or about 7% of its workforce, as it works to adapt to the rapidly changing payments industry.
Chief Executive Ryan McInerney said in a memo to employees that most of the roles affected would be in technology and product teams, but that there would be cuts across the organization. He said technology trends are creating "a once-in-lifetime inflection point in payments" that is changing how money moves around the world.
"To capture the opportunities ahead and best position Visa to lead this transformation, we must continue evolving how we work," he wrote in a memo viewed by The Wall Street Journal.
Seagate Profit Soars as AI Boom Drives Data Storage Demand
Seagate Technology reported higher fourth-quarter profit on the back of an AI-driven surge in data storage demand.
The mass-capacity data storage company reported net income of $1.29 billion, or $5.58 a share, up from $488 million, or $2.24 a share the year prior.
Adjusted earnings were $5.71 a share. Analysts polled by FactSet expected $5.10 a share.
Apple Launches Product Leasing Program Through Klarna
Apple launched a new product leasing program with Klarna that will allow customers to pay monthly for new devices and then return, upgrade or buy them.
The program, dubbed Apple Upgrade, will offer 12- and 24-month leasing options for iPhone and Apple Watch, and 24- and 36-month terms for Mac and iPad. Klarna, the buy now, pay later company, will provide the leasing options.
The announcement comes a month after Apple raised prices on some of its devices because of soaring memory and chip-storage costs.
Chip-Equipment Supplier ASM International Lifts Sales Outlook as AI Fuels Orders
ASM International said it expected sales next year to grow more than previously thought as the race to build artificial-intelligence infrastructure and new devices coming to market fuel demand for chips and the tools needed to make them.
The Dutch group, which supplies chip makers with wafer processing equipment for the deposition of thin films, in September set a 2027 revenue target between 3.7 billion and 4.6 billion euros, equivalent to $4.21 billion to $5.23 billion. It said Tuesday that it expected revenue next year to exceed the top end of that range.
The company cited strong orders in the first half, expectations for continued robust bookings in the second half, and visibility from customers as they seek to expand capacity to produce more chips so they can satisfy demand from their own customers.
Expected Major Events for Wednesday
01:30/AUS: Jun Consumer Price Index
02:00/SKA: Jun Department store sales
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