NEW YORK, August 5, 2026, 4:06 p.m. EDT — The Dow advanced on Wednesday, with Wall Street lifting expectations for artificial intelligence spending, supporting gains in U.S. stocks during afternoon trading.
- Early close: Dow up 0.83%, S&P 500 adds 0.07%, Nasdaq slips 0.49%.
- Although new intraday records were set, the number of decliners surpassed advancers on both exchanges.
- The focus for rates and valuation shifts to Friday’s employment report.
Major U.S. stock indexes diverged at Wednesday’s preliminary close. The Dow rose by 448 points, while the Nasdaq recorded a decline. Market participants pulled back from expensive AI-related shares seen as lacking immediate earnings justification. Normal trading had concluded, and after-hours activity was in progress.
The market sent a more selective signal compared to its record-setting headlines. The S&P 500 edged slightly higher, but declining stocks outnumbered advancing ones on both major exchanges. On the NYSE, the ratio of losers to gainers was 1.07-to-1 negative, while on the Nasdaq it stood at 1.29-to-1.
| Index | Preliminary close | Daily change | Since July 31* |
|---|---|---|---|
| Dow Jones Industrial Average | 54,533.87 | up 0.83% | gained 3.90% |
| S&P 500 | 7,742.05 | up 0.07% | increased 3.37% |
| Nasdaq Composite | 26,455.43 | down 0.49% | advanced 4.26% |
Initial figures were provided by Reuters. Week-to-date performance is based on closing prices from July 31. Final values may be adjusted slightly following the closing-auction reconciliation.
Last week, the S&P rose 1.05% and the Nasdaq climbed 1.59%. The current week’s rally has already more than twice exceeded both gains.
The five-session comparison provides the strongest indication for investors. On Friday, AI investments supported by evident cloud expansion were favored. On Wednesday, the market penalized spending linked to unclear returns or increased share issuance.
Edward Jones analyst Brian Therien said the market now seems to be shifting focus from recognizing companies’ AI expenditures to evaluating the resulting revenue and earnings from those investments.
Shares of SpaceX NASDAQ:SPCX declined roughly 12% after the company posted a 92% jump in revenue to $7.8 billion, outpacing the consensus forecast of $6.9 billion, and reported smaller losses. However, beginning Thursday, 911 million locked shares will be eligible to enter the market.
Advanced Micro Devices NASDAQ:AMD dropped roughly 6% even after projecting revenue ahead of market expectations. Nvidia NASDAQ:NVDA gained approximately 4% following SpaceX’s announcement of a new data-centre chip collaboration.
| Company | Session move | Fresh evidence | Investor read |
|---|---|---|---|
| SpaceX NASDAQ:SPCX | Roughly -12% | Revenue up 92%; loss reduced | Spending and unlocked shares weighed on outlook |
| Advanced Micro Devices NASDAQ:AMD | Roughly -6% | Revenue outlook topped forecasts | Forecast failed to meet valuation expectations |
| Nvidia NASDAQ:NVDA | About +4% | Chip partnership with SpaceX | Clarity on direct orders backed stock |
| Amgen NASDAQ:AMGN | +3.5% | Sales for the quarter rose 9% | Dow benefited from resilient earnings |
| Eli Lilly NYSE:LLY | +3.9% | Raised annual revenue projection | Strong drug demand offset rate worries |
| Walt Disney NYSE:DIS | +3.4% | Quarterly profit exceeded forecasts | Dow lifted by entertainment and parks divisions |
The actions and cited drivers are drawn from market updates by Reuters and the Associated Press.
The price-weighted Dow gained atypical support from healthcare and entertainment. Amgen reported a 9% increase in sales. Lilly boosted its yearly revenue outlook, and Disney surpassed expectations for quarterly profits.
Amgen received a number of increased price targets following its earnings. However, analyst opinions continued to differ significantly. Target prices cited varied from $230 to $450.
| Broker or parent company | Recommendation | Previous target | New target |
|---|---|---|---|
| BMO Capital Markets / Bank of Montreal NYSE:BMO | Outperform | $400 | $450 |
| Wells Fargo NYSE:WFC | Equal Weight | $390 | $400 |
| Canaccord Genuity Group (TSE:CF) | Hold | $366 | $384 |
| BofA Securities / Bank of America NYSE:BAC | Underperform | $312 | $317 |
| Robert W. Baird | Underperform | $215 | $230 |
The recommendations were restated on Wednesday, when updated targets were also announced.
Macro data provided little respite. Automated Data Processing NASDAQ:ADP reported a gain of 44,000 private jobs in July, short of economists’ projections of 70,000. The services sector grew, while price pressures mounted.
| Indicator | Latest | Comparison | Market implication |
|---|---|---|---|
| Private payrolls | +44,000 | +70,000 expected | Hiring lost momentum |
| ISM services PMI | 54.1 | 54.0 previously | Services sector continued to grow |
| ISM new orders | 57.2 | 55.1 previously | Order levels stayed robust |
| ISM prices | 70.3 | 67.7 previously | Cost pressures intensified |
| ISM employment | 47.4 | 51.2 previously | Services sector job numbers fell |
| 10-year Treasury yield | 4.627% | Little changed | Bond market saw no significant reprieve |
| September rate-hike probability | 54.9% | 58.3% one week earlier | Chances of tightening stayed high |
The survey data was provided by ISM. CME Group NASDAQ:CME FedWatch supplied rate probability figures, as reported by Reuters.
Bond investors interpreted the data as indicating a slowdown in hiring rather than a reduction in inflation. The yield on the 10-year note stayed close to 4.63%. Priscilla Thiagamoorthy, an economist at BMO, stated that persistent demand and ongoing price pressures supported a “higher-for-longer” approach from the Fed. Reuters
Strong corporate earnings continue to underpin valuations. Among 304 S&P companies that had reported by Friday, 85.2% surpassed expectations. The historical average for beats stands at 67.5%. Despite this, the index was recently valued close to 20 times forward earnings, exceeding its decade-long average of 19 times.
With cash trade finished for the day, market focus turns to upcoming data. The July employment report, due Friday, is projected to reveal 80,000 jobs added. Economists anticipate the unemployment rate will stay at 4.2%.
| Date and time, EDT | Scheduled release | Main market question |
|---|---|---|
| August 6, 8:30 a.m. | Preliminary second-quarter productivity and costs | Is productivity enough to balance rising wages? |
| August 7, 8:30 a.m. | July employment situation | Is a slower pace of hiring signaling a wider slowdown? |
| August 12, 8:30 a.m. | July consumer-price index | Are energy and services driving inflation higher? |
| August 13, 8:30 a.m. | July producer-price index | Are higher input costs for businesses being passed on to consumers? |
The U.S. Bureau of Labor Statistics provided the release schedule.
Risks: If the Iran-Oman accord collapses, oil prices and Treasury yields may rise. Strong payroll or CPI data could renew expectations of a rate increase. The expiration of SpaceX’s lockup period poses a short-term risk of increased share supply.
On Wednesday, the market did not turn away from AI, but instead increased the level of scrutiny. Demonstrating revenue growth was not enough if issues like high spending, dilution, or execution risk persisted.
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