Market Summary - August 4, 2026
US500 Reaches New Record High
The US500 index has set a new record high at 7654.7, reflecting a 0.31% increase. This surge is attributed to renewed buying interest in US equities, driven by a strong earnings season and geopolitical developments.
Geopolitical Context
Investors are reacting positively to President Donald Trump's comments regarding ongoing negotiations with Iran, which suggest a potential de-escalation of tensions in the Middle East. This sentiment is further supported by lower oil prices and declining bond yields, which are providing additional momentum for equity indices.
US Earnings Season Performance
The current US earnings season is exceeding expectations, with S&P 500 companies projected to achieve a remarkable 47.4% year-over-year earnings growth for Q2 2026. This figure has risen from an initial estimate of 23% at the end of June, marking the strongest quarterly growth since Q4 2021.
Excluding major players like Alphabet and Amazon, the expected earnings growth for the S&P 500 stands at 28.8%, the highest in five years. Notably, 86% of S&P 500 companies have reported earnings per share (EPS) above expectations, and 77% have exceeded revenue forecasts. Nine out of eleven sectors have seen upward revisions in earnings estimates.
Outlook for Q3 2026
Looking ahead, 34 companies have raised their earnings guidance for Q3, while only 20 have issued negative outlooks. The S&P 500 is currently trading at a forward price-to-earnings (P/E) ratio of 19.6, which is below its five-year average of 19.9 and slightly above its ten-year average of 19.0. Given the improving corporate margins and strong earnings backdrop, current valuations appear reasonable.
Technical Analysis
The US500 index has shown resilience, rebounding twice after dipping below the 50-day EMA, indicating that the 7,200–7,300 point range is a significant support zone. The index is now at an all-time high, with the Relative Strength Index (RSI) just below 60, suggesting potential for further upside. Key support levels are identified at 7,500 and 7,300 points.
Brent Crude Oil Update
Brent crude oil has experienced a sharp pullback from a recent high near $94 per barrel, failing to surpass the 61.8% Fibonacci retracement level. The next major support is around $80 per barrel, as indicated by the 23.6% Fibonacci retracement and previous price reaction levels.