US stocks edged lower on August 6 as rising oil prices, higher Treasury yields and mixed corporate earnings pressured risk sentiment. Technology shares were comparatively resilient, limiting the Nasdaq Composite's decline.
US equity futures were broadly flat during the August 7 Asian session as investors waited for the July employment report and its implications for Federal Reserve policy.
Data note: The US cash market had not opened during the August 7 Asian session. Index figures therefore represent the August 6 New York close, while futures are August 7 intraday indications. The jobs report is scheduled for 8:30 a.m. US Eastern Time.
Market Overview
| Index | August 6 Close | Daily Change |
|---|---|---|
| S&P 500 | 7,709.96 | -0.18% |
| Dow Jones Industrial Average | 53,885.10 | -0.85% |
| Nasdaq Composite | 26,348.35 | -0.06% |
| Russell 2000 | 3,001.55 | -0.58% |
| VIX Index | 15.15 | -4.17% |
| US 10-Year Treasury Yield | Around 4.68% | Slightly higher |
Through Thursday, the S&P 500 was up 2.9% for the week, the Dow had gained 2.7%, the Nasdaq was up 3.8%, and the Russell 2000 had advanced 2.4%.
The S&P 500 remained just below its record closing level of 7,736.52 reached on August 4.
August 7 Equity Futures
| Futures Contract | Intraday Level | Change |
|---|---|---|
| September Dow Futures | Around 53,937 | -0.14% |
| September S&P 500 Futures | Around 7,729.50 | -0.07% |
| September Nasdaq 100 Futures | Around 29,490 | +0.01% |
| September Russell 2000 Futures | Around 3,003.60 | -0.18% |
The narrow moves indicated limited positioning before the employment report.
Global and Macroeconomic Context
1. US Employment Report in Focus
US nonfarm payrolls increased by only 57,000 in June, while the unemployment rate remained at 4.2%. Economists expected approximately 85,000 new jobs in July, with unemployment unchanged at 4.2%.
A stronger report could lift Treasury yields and pressure high-valuation growth stocks. A weaker result could increase concerns about slowing economic activity.
2. Federal Reserve Watches Inflation Risks
The Federal Reserve maintained the federal funds target range at 3.50% to 3.75% at its July meeting.
Markets are monitoring employment, wage growth and inflation to determine whether the Fed will keep rates unchanged or consider further tightening.
3. Oil Prices and Middle East Risks
Brent crude rose nearly 4% on August 6, reviving concerns about energy costs and inflation. Middle East developments remain capable of affecting equities through oil prices, bond yields and corporate operating costs.
Sector and Stock Highlights
Technology and AI
Technology performance was mixed:
- Microsoft gained approximately 2.54%
- AMD rose 1.50%
- Apple added 0.45%
- Meta gained 0.19%
- Nvidia slipped 0.10%
- Alphabet declined 1.29%
Investors are increasingly shifting their focus from the size of AI capital expenditure toward measurable revenue, earnings and cash-flow returns.
Earnings Divergence
Warner Bros. Discovery rose 1.7% following better-than-expected earnings, while Molson Coors gained 1.3%.
Honeywell Aerospace dropped 23.2% after disappointing results, and AppLovin fell 19.7% following a mixed quarterly report. SpaceX gained approximately 6.1%, although its first public-company earnings and the expiration of a share lockup continued to produce elevated volatility.
Approximately 85% of S&P 500 companies had reported results, with overall earnings growth on track to be the strongest since 2021.
Stocks to Watch
| Company | Ticker | Reason |
|---|---|---|
| Microsoft | MSFT | Cloud and AI profitability |
| Nvidia | NVDA | Key indicator of AI and semiconductor sentiment |
| AMD | AMD | AI-chip and data-centre competition |
| SpaceX | SPCX | Post-IPO earnings and lockup volatility |
| Warner Bros. Discovery | WBD | Sustainability of its earnings improvement |
| AppLovin | APP | Repricing after its post-earnings decline |
| Honeywell Aerospace | HONA | Valuation adjustment following weak results |
Market Drivers
- July nonfarm payrolls and wage growth
- US Treasury yields
- Corporate earnings and guidance
- Returns from AI-related investment
- Oil prices and Middle East developments
- The large weighting of major technology companies
Short-Term Outlook
| Index | Reference Support | Reference Resistance |
|---|---|---|
| S&P 500 | 7,700 / 7,600 | 7,737 / 7,800 |
| Dow Jones | 53,500 / 53,000 | 54,086 / 54,500 |
| Nasdaq Composite | 26,000 / 25,500 | 26,585 / 27,000 |
| Russell 2000 | 2,950 / 2,900 | 3,020 / 3,100 |
For market observation only; not investment advice.