Wall Street wrapped up Wednesday with broad gains as investors digested a wave of blowout bank earnings, a surprisingly cool wholesale inflation report, and a bombshell acquisition bid for PayPal. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average each advanced roughly 0.2% to 0.3%, building on Tuesday's inflation-fueled rally. The gains came despite fresh U.S. military strikes against Iran and a sharp reversal in memory chip stocks, which gave back a portion of their prior session's dramatic surge.
The S&P 500 advanced approximately 0.3% on the day, extending its run above the 7,500 level. The Nasdaq Composite gained around 0.3% as well, aided by strength in communication services stocks. The Dow Jones Industrial Average rose about 0.2%, trading in the mid-52,000 range. The Russell 2000 index of small-cap stocks lagged the large-cap benchmarks. The Communication Services sector led S&P 500 gains, up 2.8%, paced by Alphabet (NASDAQ: GOOGL) and Take-Two Interactive (NASDAQ: TTWO). Energy was the session's worst performer, down 1.5%.
Treasury yields declined after the PPI report. The 10-year Treasury yield fell to 4.55%, down from 4.59% at Tuesday's close. West Texas Intermediate crude oil futures edged up 0.5% to approximately $79.70 per barrel even as U.S. Central Command announced a fresh wave of strikes against Iranian military targets. Gold futures dipped to around $4,065 per ounce. Bitcoin traded near $64,800. The U.S. dollar index fell 0.5% to 100.44.
Goldman Sachs (NYSE: GS) reported record second-quarter 2026 results, crushing Wall Street expectations. The firm posted diluted EPS of $20.98, a 44.3% beat versus the $14.48 analyst consensus and nearly double the $10.91 earned in Q2 2025. Total net revenue reached $20.34 billion, up 39% year-over-year and 23.7% above estimates. Net earnings came in at $6.63 billion, up 84% from a year earlier. The Global Banking & Markets segment generated record net revenues of $15.52 billion, up 53% year-over-year, driven by a record equities desk that pulled in $7.42 billion — up 72%. Investment banking fees rose 55% to $3.40 billion. Goldman also increased its quarterly dividend to $5.00 per share for Q3. GS shares traded up roughly 9%.
BlackRock (NYSE: BLK) reported adjusted earnings of $13.91 per share for Q2 2026, topping the $12.59 consensus estimate by 10.5% and representing a 15% increase year-over-year. Revenue reached $7.08 billion. Total assets under management climbed to a record $15.34 trillion as of June 30, up 22% year-over-year. Long-term net inflows for the quarter totaled $192 billion, a sharp acceleration from $68 billion in the prior-year quarter, led by $92 billion into fixed income and $71.6 billion into equity products. CEO Larry Fink stated: "Market fundamentals are strong and well supported, with higher margins and earnings momentum catalyzed by new technology." BLK shares surged roughly 6.5%.
Morgan Stanley (NYSE: MS) posted second-quarter 2026 revenues of $21.35 billion, beating the $19.67 billion consensus estimate by 8.9% and up from $16.79 billion a year earlier. The firm's EPS surprised by 19.72% versus expectations. Morgan Stanley has now surpassed consensus EPS estimates in each of the last four quarters. Shares edged up less than 1%.
Dutch semiconductor equipment maker ASML (NASDAQ: ASML) delivered a strong Q2 beat and raised its full-year sales forecast for the second time this year. Q2 revenue came in at €9.33 billion, topping the €8.80 billion estimate, while EPS of €7.58 beat the €6.88 consensus. ASML raised its full-year 2026 sales outlook to €43 billion–€45 billion, up dramatically from the prior €36 billion–€40 billion range. CEO Christophe Fouquet said AI demand is leading customers to accelerate capacity expansion: "Demand for chips is outpacing supply."
PayPal Holdings (NASDAQ: PYPL) was the session's biggest single-stock story, surging 17% after Reuters reported that Stripe and private equity firm Advent International have made an offer to acquire PayPal at more than $53 billion, or $60.50 per share — a premium of nearly 30% to the prior close. The two firms reportedly seek to jointly own PayPal with equal stakes. PayPal and Advent declined to comment; Stripe did not respond. PayPal shares had been down nearly 20% year-to-date entering the session.
Memory semiconductor stocks reversed sharply after explosive gains Tuesday. SK Hynix U.S.-listed shares (SKHY) fell 10% after soaring 27% the prior session. Micron Technology (NASDAQ: MU), SanDisk (NASDAQ: SNDK), and Seagate Technology (NASDAQ: STX) each dropped 6.5% to 9%. The Roundhill Memory ETF (DRAM) pulled back roughly 6.5% as traders locked in profits from the CPI-driven surge.
Elevance Health (NYSE: ELV) sank 9% after its earnings report. Johnson & Johnson (NYSE: JNJ) slipped approximately 2%. Apple (NASDAQ: AAPL) led the Magnificent Seven with a roughly 4% gain. Pentair (NYSE: PNR) plunged 15% after cutting its full-year guidance, reporting weak preliminary Q2 results, and disclosing the resignation of CFO Nicholas Brazis. SpaceX (NASDAQ: SPCX) hit a new post-IPO low near $135.40, approaching its $135 IPO price from June 12.
The Bureau of Labor Statistics reported Wednesday that the June Producer Price Index declined 0.3% month-over-month, well below the consensus expectation for no change, as energy prices pulled back. The reading followed Tuesday's softer-than-expected CPI showing June inflation at 3.5% annually — down from 4.2% in May and below the 3.8% forecast. Shelter costs rose just 0.1% in June, the smallest monthly increase in five years.
The back-to-back inflation data sharply reduced Federal Reserve rate-hike expectations. CME FedWatch data showed only a roughly 10% probability of a 25 basis point increase at the Fed's July 28–29 FOMC meeting, down from 35% before Tuesday's CPI report. Traders now assign approximately 60% odds of a hike at the September meeting, down from over 90%. "The Fed will likely see June's cool inflation as a justification for holding interest rates steady," said Bill Adams, Chief U.S. Economist at Fifth Third Commercial Bank.
In housing, Redfin reported that U.S. home prices climbed to a record $409,000 in June, up 2.2% year-over-year. San Francisco led metropolitan gains at +9.2%, followed by Pittsburgh (+9.1%) and West Palm Beach (+8.6%).
Wednesday delivered a clear signal: cooling inflation and a record-breaking financial sector earnings season are powerful enough to keep the bull market intact even as geopolitical tensions simmer. Goldman Sachs, Morgan Stanley, and BlackRock each reported results that showed capital markets activity remains exceptionally strong, fueled by AI-related dealmaking, record equity trading, and surging investor inflows. The Federal Reserve rate-hike threat has moved to the background for now. Investors should watch Thursday's UnitedHealth and Netflix reports closely, as healthcare and streaming sentiment could drive sector rotation. Any update on the reported PayPal acquisition will also command attention as a potential defining deal of 2026.
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