Market Rally, Oil Slips, C-Shaped Economy 8/4/26

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**Kelly Evans** (0:57)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. That music means we're at new highs for the S&P 500 today for the first time since June. I'm Kelly Evans and welcome to The Exchange. The S&P and the Dow hitting new intraday highs today on another batch of strong earnings, and Treasury Secretary Scott Bessent telling CNBC, we may have a deal today or tomorrow on the Strait of Hormuz. Oil is down 5% today. Plus Palantir soaring 30% now after blowout earnings last night. It's flirting with its best day ever. And Caterpillar is up big as well, adding that 350 or so to the Dow. Michael Darda says we are in an industrial revival. He'll join us to explain in just a bit. Plus SpaceX reports its first quarterly results after the bell today. We know that's often a trouble spot for new IPOs, but the shares already corrected more than 50 percent from their highs, and they're rising into the print now. We'll look at the market positioning and what to expect. But let's begin with these new highs for the broader markets. Michael Kantrowitz is the Chief Investment Strategist at Piper Sandler, and he is here for today's opening exchange. And just pointing this out, Kantrow, it's good to see you. Warsh has not interfered with the market's ability to make new highs. Today, bond yields are falling, and I know for you in particular, the Fed underpinning here has been an important part of this rally for the last several years now. So what do you make of this?

**Michael Kantrowitz** (2:28)
Yeah. Well, the market has struggled in the last three years when we've been at these levels of the 10-year yield.
But certainly this year, I would say it seems the impact of higher rates has not been as negative. And I think there's two reasons for that. One, the earnings numbers are just ridiculously strong, for lack of a better term, and they're also quite broad, and the macro data is also quite strong. So that's all number one. And number two is, I think a lot of the recent move in rates is tied to oil prices. And if we look at how the market's been trading with oil prices, it's just not as afraid that we're going to have a long-term negative situation. And certainly today's another good example of that. So if we do indeed open the strait again, we'll likely also see lower rates and importantly, a lower odd of the Fed raising rates in September and likely in the rest of the year as well.

**Kelly Evans** (3:27)
We had a bumpier day for the memory names yesterday, and there's been kind of a bottom being put in last week, maybe with some of the semis, and then you look today at names like Intel and some of the others that are up 10 percent. What do you think is going on here? Is that still a leadership group and is its performance still directive and telling and essential for the rest of the market?

**Michael Kantrowitz** (3:47)
Yeah, I think it is. However, in the wake of the really sharp decline in the NASDAQ and semiconductors, we did see the equal weighted index of the S&P 500 continue to do well. And I think that's because there are other areas of the economy that are doing much better than what we have seen in the prior few years. So there's a lot of other stocks that are seeing upward earnings revisions, aside from just semis. But our view, and about a week ago, we wrote that it was time to look for names within the tech space as earnings season had obviously begun. And we thought earnings was a much needed positive catalyst that I think we're seeing to help support those stocks once again.