Stock Market Recap: August 4, 2026 — Dow Closes at Record High as Iran De-Escalation Crashes Oil and Reignites AI Trade

Wall Street kicked off August on a powerful note Monday, with all three major indexes surging after President Donald Trump announced he was calling off planned military strikes against Iran. The diplomatic breakthrough sent crude oil prices tumbling more than 5%, relieving inflation fears and boosting investor confidence across every corner of the market. The Dow Jones Industrial Average finished at a new all-time closing high, while the tech-heavy Nasdaq Composite jumped more than 2% as AI-related stocks roared back from a volatile July. Strong manufacturing data further supported the bullish tone, capping a remarkable start to the new month.

Market Performance

Major Indices

• S&P 500 (^GSPC): +1.48%, closing at 7,600.50
• Nasdaq Composite (^COMP): +2.10%, closing at 25,913.90 — a gain of 540.04 points
• Dow Jones Industrial Average (^DJI): +1.32%, or +693.38 points, closing at 53,178.41 — a new all-time closing high
• Russell 2000 (^RUT): Finished higher in sympathy with the broader rally, though small-caps lagged large-cap growth

Market breadth was positive, with advancers outnumbering decliners on the NYSE by a 2.62-to-1 ratio and on the Nasdaq by 3.01-to-1. Total trading volume reached approximately 19.36 billion shares, above the recent 20-session average of 17.66 billion. The CBOE Volatility Index (VIX) fell 0.8% to 15.86, signaling reduced fear among investors.

Commodities and Other Assets

• WTI Crude Oil: Fell ~5.1% to settle near $80.34 per barrel
• Brent Crude: Dropped ~4.7% to approximately $83.77 per barrel
• Gold: Trading near $4,070 per ounce, modestly higher on the day
• 10-Year Treasury Yield: Declined to approximately 4.639%, falling alongside oil prices as inflation fears eased

Top Stories of the Day

Trump Calls Off Iran Strike — Oil Plunges, Stocks Soar

The single biggest catalyst for Monday's rally was geopolitical. President Donald Trump announced he was calling off planned U.S. military strikes against Iran, opening the door for renewed diplomacy and a potential reopening of the Strait of Hormuz — one of the world's most critical oil shipping lanes. The Strait had been disrupted since the outbreak of U.S.-Iran hostilities in late February 2026, which sent Brent crude surging to over $100 per barrel at various points through July.

With the de-escalation announcement, crude oil fell sharply. Lower oil prices have wide-reaching implications: they reduce inflationary pressures, increase consumer spending power, and lower the probability that the Federal Reserve will need to hike interest rates further. Treasury yields fell alongside oil, with the 10-year yield returning to its pre-Warsh-press-conference level near 4.639%, according to Tradeweb data.

While energy stocks lagged — with the Energy Select Sector SPDR (XLE) gaining only modestly despite the overall market rally — virtually every other sector benefited from the reduced geopolitical risk premium baked into markets over the past five months.

ISM Manufacturing PMI Surges to 4-Year High

Economic data released Monday morning added fuel to the bullish fire. The Institute for Supply Management (ISM) Manufacturing PMI for July 2026 came in at 55.6%, a 2.3 percentage point jump from June's reading of 53.3% and well above the consensus estimate of 54.0%. This was the highest ISM Manufacturing PMI reading since May 2022 and marked the seventh consecutive month of expansion for the sector.

Key sub-components of the report were equally strong: the Production Index surged to 58.5% (from 52.2%), its best reading since November 2021; New Orders remained in expansion at 56.7%; and Employment returned to expansion territory for the first time since January 2025, reaching 52.8%. The Prices Paid Index eased slightly to 71.1% (from 73.0%), suggesting that input cost inflation is moderating, though it remains elevated. Respondents cited continued AI-related capital investment, reshoring of production, and increased defense procurement as key drivers.

Magnificent Seven and AI Stocks Rebound Strongly

Following a volatile July characterized by concerns about AI capital spending and mixed mega-cap earnings, the Magnificent Seven staged a broad comeback on Monday. Microsoft (MSFT) and Alphabet (GOOGL) led the charge among mega-cap tech names, with the Roundhill Magnificent Seven ETF posting a strong session. The Communication Services Select Sector SPDR (XLC) gained 1.6% and the Consumer Discretionary Select Sector SPDR (XLY) surged 3.3%, reflecting the risk-on sentiment. The broader rally was notable because most sectors participated, with only a handful of sector ETFs posting declines — and most of those were marginal.

SpaceX (SPCX) Reports First-Ever Earnings After Market Close

One of the most anticipated events of the day came after the closing bell: Space Exploration Technologies Corp. (NASDAQ: SPCX) delivered its inaugural quarterly earnings report as a publicly traded company. SpaceX IPO'd on June 12, 2026 — the largest IPO in history by share volume — and investors had been waiting months for its first fundamental look at the books.

The August 4 report also served as the trigger for SpaceX's staggered insider lock-up release. Beginning two trading days after the report (August 6), insiders can sell up to 20% of their restricted holdings — representing as many as 911.5 million shares. A further 10% unlock could be triggered if the stock closes more than 30% above its $135 IPO price for at least five of the ten trading sessions prior to the report. SPCX shares had declined significantly from their June 16 intraday high of $225.64 heading into the print, trading near the $114-$116 range. Deutsche Bank maintained a Buy rating and $255 price target on the stock, implying over 100% upside from near-term levels.

Biggest Movers

Amazon (AMZN) — +15.32%

Amazon (NASDAQ: AMZN) was the standout winner among large-cap stocks on Monday, surging more than 15% as investors continued to reward the company's blockbuster third-quarter 2025 earnings — which included stellar AWS cloud revenue growth — with renewed confidence heading into Q2 2026 results. Amazon's gains helped lift the broader Nasdaq and the consumer discretionary sector.

Alphabet (GOOGL) — +4.88% to +6.88%

Alphabet (NASDAQ: GOOGL) shares climbed as the Magnificent Seven rebound broadened out. Strong AI cloud commentary from recent earnings reports and the declining interest rate environment (driven by falling oil) bolstered investor enthusiasm for growth stocks. Google's advertising business benefits from a healthier consumer spending backdrop, and lower oil-driven inflation reinforces that narrative.

Pfizer (PFE) — Earnings Beat

Pfizer (NYSE: PFE) reported Q2 2026 earnings before the market opened Monday, posting adjusted EPS of $0.77, beating the consensus estimate of $0.68. Revenue of $15.03 billion also surpassed analyst expectations of $14.40 billion, representing 2.6% year-over-year growth. The pharmaceutical giant has now beaten EPS estimates for five consecutive quarters. Investors are watching closely for signs of pipeline progress as the company navigates the fading of pandemic-era revenue and a looming patent cliff.

GoDaddy (GDDY) — Down ~16.70%

GoDaddy (NYSE: GDDY) was among the worst performers in the S&P 500, plunging approximately 16.70% after reporting Q2 2026 earnings that beat estimates on the top and bottom lines but disappointed on forward guidance. Adjusted EPS of $1.83 beat the consensus of approximately $1.69-$1.70, and revenue of $1.30 billion edged past the $1.29 billion estimate (up 6.6% year-over-year). However, the company narrowed its full-year 2026 revenue guidance range to $5.215B–$5.255B from $5.195B–$5.275B, and Q3 guidance of $1.315B–$1.335B landed roughly in line rather than above Street expectations. Analysts at William Blair downgraded the stock and multiple firms cut price targets, citing decelerating Applications and Commerce bookings growth.

Corteva (CTVA) — Down ~11.90%

Corteva (NYSE: CTVA), the agricultural sciences company, fell nearly 12% despite posting a beat on earnings. The company reported Q2 2026 adjusted EPS of $2.30, above the $2.22 estimate, but revenue of $6.38 billion missed the $6.57 billion forecast. Corteva raised its full-year 2026 operating EBITDA guidance to $4.1B–$4.3B and operating EPS to $3.60–$3.80 per share. The stock sold off as investors focused on the revenue miss and concerns about global agricultural market dynamics, particularly pressure on crop protection volumes in Latin America.

Reddit (RDDT) — Rebounded +10.34%

Reddit (NYSE: RDDT) bounced back sharply Monday, rising more than 10% and closing at approximately $154.71 after plunging nearly 21% in the previous session following its Q2 2026 earnings report. While the social media platform beat on revenue, profit, and guidance — with ad revenue climbing 64% year-over-year — investors had punished the stock for a decline in U.S. Daily Active Users. Monday's rebound reflected bargain hunting, with some analysts noting Reddit trades at a modest 15x forward 2027 P/E estimates.

Economic Data Released Today

ISM Manufacturing PMI: 55.6% (July 2026)

• Actual: 55.6% vs. Estimate: 54.0% vs. Prior: 53.3%
• This was the highest reading since May 2022 and the seventh consecutive month of expansion
• Production Index: 58.5% (highest since November 2021)
• New Orders: 56.7% (seventh consecutive month of expansion)
• Employment: 52.8% (returned to expansion for first time since January 2025)
• Prices Paid: 71.1% (slightly lower than June's 73.0%)
• New Export Orders: 53.0% (returned to expansion after June's 48.5%)

The ISM report was broadly interpreted as a sign that U.S. manufacturing remains in solid expansion mode, buoyed by AI-related capital investment, defense procurement, and reshoring activity. The return of manufacturing employment to expansion territory for the first time in 19 months was particularly welcome. Easing input cost inflation, as reflected in the lower Prices Paid Index, further reduced concerns about stagflation.

S&P Global Manufacturing PMI (July Final): 53.8

The S&P Global Manufacturing PMI for July edged down slightly to 53.8 from June's 53.9, marginally below expectations for 54.3. Despite the small dip, the reading remained near four-year highs and signaled healthy overall factory activity.

Tomorrow's Market Calendar — Tuesday, August 5, 2026

Earnings Reports

• Advanced Micro Devices (AMD) — After market close. Analysts expect revenue of approximately $11.3 billion (consensus) vs. AMD's own guidance of ~$11.2B ±$300M, and non-GAAP EPS of around $1.61. Investors will focus on Data Center revenue (possibly ~$6.5B, or ~100% YoY growth), gross margin (guided at ~56%), and Q3 guidance. AMD's Instinct AI accelerators and EPYC server CPUs have been major growth drivers.
• Space Exploration Technologies (SPCX) — After market close (results released after August 4's close; reaction expected in Tuesday trading). This is SpaceX's inaugural earnings report as a public company. Investors will also note that the first insider lock-up tranche (up to 20% of restricted shares) becomes eligible for sale starting August 6.
• Shopify (SHOP) — Reports Q2 2026 results. Wall Street will scrutinize Shopify's performance following commentary about competition from Meta's rapidly expanding commerce ecosystem.
• Circle (CRCL) — Reports earnings, with cryptocurrency and stablecoin dynamics in focus.

Economic Releases

• U.S. Trade Balance (June): Estimate -$76.50B vs. prior -$77.59B (8:30 AM ET)
• U.S. Exports & Imports Data (June): Estimate $318.5B (8:30 AM ET)
• Factory Orders MoM (June): Estimate -0.8% vs. prior -1.3% (10:00 AM ET)
• Job Openings (JOLTS) data — any significant deviation from estimates could move the market as the Fed monitors labor market tightness

Other Market Events

• AMD earnings call at 5:00 PM ET — Lisa Su's commentary on AI chip demand, Helios rack deployments, and FY2026 guidance will be widely watched
• Oil markets will continue monitoring U.S.-Iran diplomatic developments following Monday's de-escalation announcement
• Friday, August 7: July Non-Farm Payrolls report — the single most important data release of the week for Fed policy expectations

Conclusion

Monday's session offered investors an encouraging reset heading into August. The combination of geopolitical relief — with President Trump halting the Iran military strike — and a blow-out ISM Manufacturing PMI proved to be a powerful one-two punch that lifted all three major indices and drove the Dow to its first new all-time closing high in weeks. The 5%+ crash in crude oil prices was the most consequential single-day market driver, with knock-on effects ranging from falling Treasury yields to a revival in AI and growth stocks that had been weighed down by inflation and rate concerns.

Looking ahead, investors face a packed calendar. AMD's after-hours results on Tuesday could set the tone for semiconductor stocks heading into August. The SpaceX results — the most highly anticipated debut earnings report in recent memory — will be digested by markets on Tuesday as well, with the added complexity of the insider lock-up release beginning Thursday. And Friday's non-farm payrolls report will be critical for determining whether the Federal Reserve has any room to alter its rate stance. For now, the bulls are firmly in control, but as the Iran situation remains fluid and earnings season continues, volatility could return quickly.