Market Overview
Cool Inflation, Narrow Leadership: A Handful of AI Stocks Ran While the Index Drifted
Today's Moves
S&P 500 ▼ 0.17% Dow ▼ 0.20%
Nasdaq ▼ 0.28% Russell ▲ 0.51%
Nasdaq ▼ 0.28% Russell ▲ 0.51%
Weekly Performance
S&P 500 ▼ ~0.1% Nasdaq ▼ ~0.4%
Dow ▼ ~0.2% — stocks are clawing back Monday and Tuesday's dip after a record-setting rally the week before.
Dow ▼ ~0.2% — stocks are clawing back Monday and Tuesday's dip after a record-setting rally the week before.
The Week's Theme
July's CPI report landed exactly in line with forecasts — 3.4% headline, 2.5% core — removing the week's biggest wildcard. But instead of a broad rally, traders tilted toward the Fed holding rates steady in September, and the real fireworks came from a wave of blowout AI-infrastructure earnings that sent Nebius, CoreWeave, Supermicro, and Lumentum soaring even as the major indexes closed slightly lower.
Market Breadth
Utilities were the only sector to close higher, up 1.1%, as investors leaned defensive. Communication services led losses, down 2.1% on AppLovin and Meta weakness, followed by real estate and consumer discretionary. AI-infrastructure and optical names bucked the trend entirely, posting some of their biggest single-day gains of the year.
Brent crude pushed back toward $90 a barrel — up roughly 24% since the U.S.-Israel-Iran conflict began in late February — after U.S. Central Command disabled a Panama-flagged cargo ship attempting to breach the American blockade of Iranian ports. Only about 10 vessels transited the Strait of Hormuz on Monday, versus roughly 130 a day before the war, and talks between Oman and Iran remained stalled despite Qatar's claim they were "at an advanced stage."
Breaking
Cooler CPI Meets a Fed Leaning Toward "Hold" — And Stocks Shrug
- July's Consumer Price Index rose 0.1% for the month and 3.4% from a year earlier, matching Wall Street's forecast exactly; core CPI came in at 2.5% year-over-year, also in line with estimates.
- Despite the in-line print, traders tilted their bets toward the Federal Reserve holding rates steady in September, walking back what had been a near-even split on a possible rate cut heading into the report.
- The 10-year Treasury yield ticked up to roughly 4.69%, and the VIX fell to 14.25 — near a seven-month low — signaling little fear despite the mixed signals.
- The major indexes finished the session little-changed: the S&P 500 slipped ▼ 0.17% and the Nasdaq eased ▼ 0.28%, while the Russell 2000 gained ▲ 0.51%.
Sector Focus
AI-Cloud Earnings Spark a Historic One-Day Rally
- Nebius (NBIS) led the entire market, surging ▲ 34% after posting blockbuster cloud-infrastructure results and raised guidance tied to surging AI compute demand.
- CoreWeave (CRWV) jumped ▲ 19% a day after reporting Tuesday-evening results that showed revenue of $2.58 billion — up 112% year-over-year — a $104 billion backlog, and Q3 guidance of $3.4–$3.6 billion.
- Super Micro Computer (SMCI) soared ▲ 19% after issuing a fiscal 2027 revenue outlook of $65–72 billion, far above the roughly $52.5 billion Wall Street had penciled in.
- Lumentum (LITE) rocketed ▲ 14% and Coherent (COHR) climbed 9% on optics-earnings beats tied to AI datacenter buildouts, while Cisco Systems reports after Wednesday's close with the Street watching for confirmation of its AI order momentum.
Today's Winners
Neoclouds and AI-Power Names Ruled Wednesday
- Nebius (NBIS) led all gainers, surging ▲ 34% on exceptional cloud-infrastructure earnings and raised guidance.
- CoreWeave (CRWV) and Super Micro Computer (SMCI) each jumped ▲ 19% after posting blockbuster results tied to surging AI compute demand.
- Lumentum (LITE) climbed ▲ 14% after a blowout earnings beat in optical networking components used in AI data centers.
- Bloom Energy (BE) rallied ▲ 12.6%, with Ciena, Nokia, and Teradyne also posting double-digit or high-single-digit gains as investors kept betting on the AI-infrastructure buildout.
Macro & Index Change
A Quiet Pullback Despite Cooling Inflation
- The Dow Jones Industrial Average fell ▼ 0.20% to 53,684.27, the S&P 500 slipped ▼ 0.17% to 7,715.06, and the Nasdaq Composite eased ▼ 0.28% to 26,371.40.
- The Russell 2000 bucked the trend, adding ▲ 0.51% to 3,043.82 as small caps found support on the in-line inflation read.
- The 10-year Treasury yield edged up to roughly 4.69%, and gold rose about 0.4% to roughly $4,437 an ounce.
- WTI crude climbed toward $83.80 a barrel and Brent pushed near $90 as the Strait of Hormuz blockade tightened further after the Panama-flagged ship incident.
Looking Ahead
What to Watch Thursday, August 13
- Cisco Systems (CSCO) reports fiscal Q4 results after Wednesday's close, with the Street expecting $1.17 EPS on $16.82–$16.85 billion in revenue after the company raised its full-year AI infrastructure order target to $9 billion from $5 billion.
- July PPI and weekly jobless claims land Thursday morning, the next major test for the Fed's rate-path debate after Wednesday's in-line CPI.
- Several Federal Reserve officials are scheduled to speak Thursday, offering fresh color on September rate odds now tilted toward a hold.
- The Strait of Hormuz remains the key swing factor for oil after the U.S. disabled a Panama-flagged ship attempting to breach the blockade of Iranian ports; talks between Oman and Iran remain stalled.
- Home Depot reports Tuesday, August 18 — its first quarterly update since CEO Ted Decker's temporary medical leave announcement Wednesday.