WS #13456

Markets are at record highs with Dow and S&P 500 setting new peaks, driven by strong earnings and hopes for a Hormuz reopening. However, a sharp divergence is emerging: SpaceX (SPCX) is down 12% after its first earnings report revealed $18.4B in capex, mostly for AI compute, and widening losses, while AMD is down 5% despite beating estimates due to weak guidance. This is creating a rotation out of high-flying AI/space names into other sectors. Geopolitically, the Hormuz situation is the dominant theme: Iran and Oman are finalizing a draft deal, with US Treasury Secretary Bessent saying a deal is close, and Trump suggesting an announcement could come 'tomorrow or the day after.' This is a counter-signal to the oil spike narrative, as Brent has rebounded above $80 on a Houthi tanker attack claim, but the prospect of a deal is capping gains. Precious metals are surging (gold +2.34% to $4,249.90, silver +3.05% to $62.09) on weak ADP data and a less hawkish Fed outlook. In earnings, Disney beat with EPS $2.06 vs $1.85 est, driving shares up 2.5%, while Chipotle gained 3.5% after being cleared in a salmonella outbreak. Jeff Bezos is selling $4B of AMZN stock, the largest since before the 2024 election, a potential bearish signal for the stock. The US S&P Global Composite PMI for July was revised higher to 54.5 vs 53.6 est, indicating economic strength. Overall, the narrative is one of record highs with a rotation away from AI/space, while Hormuz headlines continue to drive oil and risk sentiment.