Market Monitor News August 07 BMO - Apple Ignites Wall Street Rally With $100B Bet on America

Tech Leads the Charge as Apple Goes All-In on America

Let’s start with what really moved markets yesterday, Apple (AAPL | +5.09%).

After a rather dull Tuesday, Wall Street woke up to a tech-led rally, spearheaded by the Cupertino giant’s jaw-dropping announcement: an additional $100 billion in U.S.-based investments over the next four years.

This isn’t just PR spin. According to Bloomberg and later confirmed by the White House, the capital injection includes reshoring key parts of Apple’s supply chain and expanding domestic production. That’s music to the ears of an administration eager to reduce reliance on China and to investors who see domestic expansion as a strategic hedge.

With this announcement, Apple closed the day at $213.28, up a hefty 5.1%. The Nasdaq (COMPX | +1.2%) soared alongside it, while the Dow Jones (DJI | +0.2%) took a more leisurely stroll higher.

It’s a clear sign that when Big Tech flexes, markets follow.

Winners in Apple’s Wake: A Tech Mini-Rally

Apple wasn’t the only one enjoying the spotlight. Amazon (AMZN | +4%) and Meta Platforms (META | +1.12%) all rode the momentum, giving the Nasdaq its strongest daily gain this week.

But not every chip in the AI bowl tasted sweet.

AMD: Strong Quarter, Soft Guidance, Big Drop

Advanced Micro Devices (AMD | -6.42%) was the odd one out in the tech rally.

On paper, the quarter looked solid: revenue up 32%, a beat on earnings, and a Q3 revenue forecast of $8.7B (vs. $8.3B expected). So why the selloff?

The answer lies in China or rather, the uncertainty surrounding it. AMD admitted it still doesn’t know when shipments of its high-end Instinct MI308 chips to China will resume. Given the strict U.S. export controls, investors were spooked.

Morgan Stanley noted that management sounded “more conservative than expected,” and JPMorgan chimed in, highlighting the unpredictable licensing process with the U.S. Department of Commerce.

Even though JPMorgan upped its price target from $120 to $180, the tone wasn’t enough to stop the bleeding. AMD closed at $163.12, down sharply on the day.

Disney: Mixed Signals From the House of Mouse

The story at Disney (DIS | -2.66%) was a tale of two divisions. Headline numbers disappointed, revenue and operating income missed expectations, largely due to weakness in the traditional media and content licensing segments.

But there were bright spots: Disney+ performed better than expected, the theme parks division remained resilient, and ESPN’s operating income pleasantly surprised. Evercore tried to soothe nerves by emphasizing that “the key components of the Disney investment case remain intact.”

Snap, Super Micro, and EVs Take a Beating

Snap (SNAP | -17.15%) and Super Micro Computer (SMCI | -18.29%) both cratered.

Snap reported a loss wider than Wall Street expected, while SMCI’s full-year earnings came in light. That’s a brutal combo, especially in a market that’s rewarding clarity and punishing ambiguity.

Lucid Group (LCID | -9.71%) also disappointed, posting yet another quarterly loss and lowering its production forecast for 2025. Rivian (RIVN | -4.2%) followed suit, widening its expected EBITDA loss for the year to between $2B and $2.25B—more than previous guidance.

Arista and Astera: Bright Spots Amid the Noise

Thankfully, not every earnings report was a gut punch.

Arista Networks (ANET | +17.49%) beat both top- and bottom-line expectations and issued bullish guidance on the back of higher spending on cloud networking solutions.

Astera Labs (ALAB | +28.66%) crushed it with record quarterly revenue of $191.9 million, up 150% year-over-year, thanks to soaring demand for AI-related products. Apparently, there’s still room at the AI table for the right kind of chips.

Macro & Geopolitics: Sanctions, Tariffs, and Tensions

Outside the earnings parade, geopolitics once again crept into the market narrative. President Trump touted “great progress” after talks between his envoy and Russian President Putin, but simultaneously threatened new sanctions on Russian oil revenues.

Meanwhile, the U.S. doubled tariffs on Indian goods to 50% as punishment for India’s continued imports of Russian oil, no real surprise, but a clear sign that trade tensions remain a key variable.

Switzerland also left the negotiating table empty-handed, shocked by a proposed 39% U.S. import tariff across the board, pharma included. Bloomberg Economics warned this could cost the Swiss economy up to 1% of its GDP if enacted.

Oil prices fell for the fifth day in a row despite early-session gains. Energy traders are clearly trying to decipher where sanctions and supply will go from here.

Final Thought

Markets seem to be caught in a balancing act: strong corporate earnings on one side, persistent geopolitical risks and macro uncertainty on the other. For now, Big Tech is the anchor, but as AMD reminded us, even the darlings aren’t immune to policy risk.

Investors should stay nimble. There's strength in this market, but it’s highly selective and increasingly dependent on which headlines are leading the day.

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Kristoff - ChartMill

Next to read: Market Monitor Trends & Breadth Analysis, August 7