Gold Star. The Dow Jones Industrial Average had a stellar Tuesday, while the Nasdaq Composite sat in the timeout chair throughout the trading session.
The Dow rose 537 points, or 1%. The Nasdaq fell 0.2%. The S&P 500 rose 0.2%.
The S&P and the Nasdaq both opened much lower, with the Nasdaq shedding as much as 1.4% at its intraday low.
My colleague Connor Smith notes that the Dow's rally was "led by a wave of strong earnings performances including Sherwin-Williams, but a majority of S&P 500 stocks were up all day. Health care and consumer staples led, while energy and tech struggled again."
The Mag Seven and software stocks were rallying too, nearly lifting the Nasdaq back into positive territory. Indeed, about 71% of S&P 500 stocks gained on the day.
But it wasn't enough to offset the chip pessimism sparked by another heavy selloff in Asia. The South Korean KOSPI Index fell about 11% on Tuesday. Samsung Electronics and SK Hynix, the Kospi's largest holdings, shed 13.4% and 14.7%, respectively. SK Hynix's American depository shares fell 9% on Tuesday.
And it wasn't just South Korea -- the Taiwan Stock Exchange Capitalization Weighted Stock Index, or TAIEX, fell by about 4.7%, while Japanese chip makers Kioxia and Tokyo Electron fell 18% and 11%.
"This is all one big global trade," writes Peter Boockvar, chief investment officer of One Point BFG Wealth Partner.
In a sign of the times, Apple on Tuesday dethroned Nvidia as the world's most valuable company. Apple reached a market capitalization of about $5 trillion, making it the largest company by total valuation for the first time since May 2025. It's unclear how long that will last, but while it does, I'm sure Apple investors will make the most of it.
The Hot Stock: IQVIA Holdings +13.9% The Biggest Loser: Sandisk -14.3%
Best Sector: Health Care +2.3% Worst Sector: Energy -1.4%
That's Gotta Hurt
The past few weeks haven't been great for Elon Musk. Shares of Tesla and SpaceX, the two biggest sources of his wealth, have been on a steady decline. Tesla stock shed 17% since its second-quarter earnings report on July 22, and SpaceX is off 45% since its record closing high reached after its June IPO.
My colleague, Al Root, calculates that Musk has lost about $660 billion combined since SpaceX hit its June high -- roughly as much wealth as Larry Page, Sergey Brin, and Jeff Bezos combined.
Don't feel too bad for him, though. Musk is still worth more than $700 billion. Plus, as Al notes:
Musk is also used to wealth volatility. It's inevitable with a fortune that is founded on promises of future earnings. Tesla stock trades for 175 times estimated 2026 earnings. The rest of the so-called Magnificent Seven megacap stocks trade for about 24 times. SpaceX, despite its recent declines, still trades for just under 40 times estimated 2026 sales.
Higher-valued stocks are always more subject to the "whims of investor sentiment," Al adds, which means there's going to be big ups and downs. Musks' ability to weather the loss of his trillionaire status serves as a reminder to us all: "Stocks are inherently long-duration investments, but growth stocks are longer-duration than most."
The Calendar
American Water Works, Amphenol, Arm Holdings, Automatic Data Processing, Biogen, Boston Scientific, Bunge, Carvana, CBRE Group, C.H. Robinson Worldwide, Chipotle Mexican Grill, Entergy, Equinix, Fair Isaac, Fortinet, Fortive, GE HealthCare Technologies, Generac Holdings, General Dynamics, Humana, Invitations Homes, Johnson Controls International, L3Harris Technologies, Lam Research, Lennox International, Meta Platforms, MGM Resorts International, Microsoft, Old Dominion Freight Line, O'Reilly Automotive, Procter & Gamble, $Public Storage(PSA-N)$, Robinhood Markets, Qualcomm, SK Hynix, Stanley Black & Decker, Starbucks, Tyler Technologies, Vertiv Holdings, and Vulcan Materials release earnings tomorrow.
The Federal Open Market Committee announces its monetary-policy decision. There is a little under a one-in-three chance that the FOMC raises the federal-funds rate by a quarter of a percentage point to 3.75% -- 4%, according to the CME FedWatch Tool. Softer-than-expected inflation readings for June have given the central bank some breathing room, but Wall Street sees it only as temporary, with the consensus view for an interest-rate hike by September.
-- Dan Lam
What We're Reading Today
-- Three Prices Where SpaceX Stock Is a Buy
-- Why Corning Stock Is Having Its Worst Day in 6 Years After Earnings
-- Berkshire Stock Rally Has Room to Run. Apple and Coke Are Driving
Portfolio Gains.
-- Can Stock Trading and Prediction Markets Offset Robinhood's Crypto Slump?
-- Coca-Cola Stock Pops After Earnings Shine a Light on Consumer Spending
Barron's Live returns on Monday. Barron's Live features timely and actionable insights for investors. We give you behind-the-scenes conversations with the newsroom, connecting you with our editors and reporters covering the markets, the economy, and more.
Sign up here
Comments