MPC Markets Morning Call — 6th August 2026: Momentum Fizzles, Gold Sizzles

The S&P 500 slipped 0.2% to close at 7,719.19 on Wednesday, giving up an intraday advance of as much as 0.7%, as signs of exhaustion emerged after four days of blistering gains. The tech-heavy Nasdaq Composite shed 0.8% to 26,363.44, weighed by declines in communication services and semiconductors. The blue-chip Dow Jones Industrial Average bucked the trend, adding 0.5% to notch a record close at 54,349.00, lifted by strong earnings from Amgen (+4.6%) and Walt Disney (+3.6%).

The sector picture was mixed: materials and healthcare both gained around 1.5%, while communication services and energy fell roughly 2%. On the stock level, Alphabet plunged 4% after announcing a seismic AI leadership overhaul that saw longtime veteran Jeff Dean depart to launch startup Discovery Loop, taking three other prominent DeepMind colleagues with him. Demis Hassabis moved into a chairman role at Google DeepMind, handing day-to-day operations to deputy Koray Kavukcuoglu. Meanwhile, AMD shed 7% despite a quarterly beat — SpaceX CEO Elon Musk’s declaration that the rocket company would “build exclusively” on Nvidia’s architecture further pressured the stock, while Nvidia itself climbed 3.4%.

The broader market narrative remains constructive. With more than 75% of S&P 500 companies having reported, Q2 earnings are on track to climb 31.1% year-on-year — the highest growth since 2021. Tech sector earnings are pacing at 72% growth. The S&P 500’s forward P/E has moderated to 20.4x from 22.2x at the end of 2025, and the tech sector’s multiple has compressed to 22.1x from 26.5x. As Peter Tuz at Chase Investment Counsel noted: “Markets are reacting very rationally to the strong earnings numbers — the P/E is 22.8x, exactly where we were at year-end.”

Global Stock Indices — Daily & 5-Day Performance. Nikkei +3.86% on the day, S&P 500 –0.17%, Dow +0.39%. All major indices positive on a 5-day basis.

S&P 500 earnings growth has soared in 2026, with Q2 on track for 31.1% YoY growth. Source: LSEG IBES.

Risk appetite was supported by several U.S. officials, including President Donald Trump, asserting that a deal to reopen the Strait of Hormuz was close. “We’re moving along very nicely. We’ll find out. We’ll know in 48 hours, I would say,” Trump told reporters on Tuesday evening. He added: “A lot of progress has been made. They called me and they said, ‘Please, let’s talk.’ They want to talk.”

Iran’s foreign ministry confirmed that talks between Tehran and Oman over the Strait were ongoing, with spokesperson Esmaeil Baqaei saying a joint statement was in a “final review and drafting stage” provided “some third parties” did not “obstruct work.” Iran’s state media added that the U.S. would have to return to commitments made under an interim peace deal signed in June as a necessary condition for reopening the strait. Oil seesawed during the session amid reports of Houthi attacks on Saudi ships, but crude has fallen sharply this week on the prospect of a deal.

Separate from the Middle East, the cybersecurity landscape drew attention after hackers launched a wave of sophisticated vishing attacks on major Wall Street hedge funds. Point72, Millennium Management, Two Sigma and Citadel were all targeted, with Two Sigma confirming it thwarted the attempt. The incidents underscore growing AI-enabled security risks — as Align Managed Services president Vinod Paul noted: “Before they could attack 50 entities in a targeted attack, now they can do 1,000.”

Gold had its best single-day performance in six months on Wednesday, surging 4.2% to $4,248.08/oz as falling Treasury yields, a weaker dollar and Hormuz peace deal hopes combined to fuel a powerful bid. Spot gold hit its highest level since 17 June, while futures climbed 4% to $4,317.07/oz. The move was one of bullion’s biggest one-day rises since the GFC, though no single fundamental catalyst was obvious — strong demand from China and a definitive bounce off the $4,000/oz psychological level likely played a role.

WTI crude fell 1.1% to $74.90/bbl in a volatile session, with Brent nursing deep weekly losses. The prospect of lower oil prices has prompted markets to dial back expectations for Fed tightening: traders are now pricing in just one U.S. rate increase by year-end, down from two hikes as recently as last week. As José Torres at Interactive Brokers noted: “A terrific development from an inflationary perspective would be a decline to below $70, as it would widen the path to a 2-handle CPI by year-end.”

The U.S. dollar index hit a seven-week low, boosting dollar-denominated commodities. In FX markets, the euro rose 0.2% to $1.1552 and sterling gained 0.1% to $1.3466, while the yen was little changed at ¥157.71 after stabilising following recent U.S.–Japan intervention. Emerging-market carry trades continued to power on, with the Bloomberg EM FX Carry Risk Premia Index falling just 1% since intervention — far less than the 4% drop seen in August 2024. Bitcoin rose 0.7% to $64,772.62 and Ether gained 2.2% to $1,916.32.

Commodities, Energy & FX — Daily & 5-Day Performance. Gold +4.19% on day, crude –0.34%, AUD +0.13%, BTC –0.04%. Lithium (+8.69% 5-day) and uranium (+7.95% 5-day) standout performers.

SpaceX shares tumbled 13.6% after reporting its first-ever quarterly earnings as a listed entity. While revenue beat expectations and the quarterly loss narrowed, analysts flagged elevated AI infrastructure spending weighing on free cash flow. CEO Elon Musk touted ambitious plans including $1 trillion revenue by 2030 and orbital data centres as soon as next year. But the bigger overhang is Thursday’s lockup expiry, which will make $101 billion worth of stock available for trading — insiders who acquired stakes before the $135/share IPO stand to crystallise large gains, potentially adding significant selling pressure.

Hyperscaler capital spending is expected to reach nearly $800 billion this year across Alphabet, Microsoft, Amazon, Meta and Oracle, according to Goldman Sachs. Critically, their latest results showed returns on AI investment, alleviating fears of spending cutbacks. As Eric Johnston at Cantor noted: “The hyperscalers can work because they’re getting an ROI on their cloud business. But so can semis because the capex can continue. It’s that combination which is super powerful right now.”

Elsewhere, Trump is preparing to impose tariffs and minimum prices on imported polysilicon under Section 232, with analysts at Roth Capital anticipating duties of 25–35%. Domestic solar makers fell on the news — First Solar sank 7.3% and T1 Energy dropped 13%. The action targets China’s dominance of the solar supply chain but raises questions about cascading effects across the semiconductor industry, where tracing polysilicon origins through processed wafers is commercially infeasible.

S&P 500 forward P/E has moderated to 20.4x (from 22.2x at end-2025). Tech sector P/E compressed to 22.1x from 26.5x. Source: LSEG Datastream.

Australian shares are set to slip at the open, reflecting the pause in Wall Street’s rally after Fed official Kashkari called for incremental rate increases. ASX 200 futures were down 9 points or 0.1% to 9,143, reversing an earlier modest gain. Communication services is likely to weigh after the 4% drop in Alphabet, though the broader earnings backdrop remains supportive of risk appetite.

AMP delivered first-half results broadly in line with expectations overnight, with underlying after-tax profits jumping a third to $174 million. The wealth manager announced a fresh $150 million buyback and lifted its interim dividend from 2¢ to 3¢ per share — a response to shareholder pressure over its unused surplus capital pile. CEO Blair Vernon flagged growing demand for retirement solutions and positive superannuation cashflow for the first time since 2017. REA Group posted a 22% decline in full-year profit to $519.3 million, though adjusted profit (excluding discontinued REA India) rose 14% to $682 million on revenue growth of 12% to $1.7 billion.