Nasdaq leads a broad rebound as megacaps take back control

Wall Street started the week with a sharp reversal. The Dow Jones Industrial Average rose 693.38 points, or 1.32%, to 53,178.41. The S&P 500 gained 1.48% to 7,600.50, leaving it about 0.3% below its early,June record. The Nasdaq Composite did the heavy lifting, jumping 2.13% to 25,913.90 as investors rotated back into growth after last week's rate,driven wobble, according to CNBC.

The notable change in Monday's tape was leadership. This wasn't another oil story or another bond tantrum. It was a clean risk,on move centered on communications services and technology, with traders rewarding cloud and AI winners after a bruising July. MarketWatch said the Dow finished at a record close while the S&P 500 and Nasdaq posted a third straight day of gains.

Amazon, Meta and Microsoft power the move higher

The biggest individual,stock story was the return of megacap momentum. Amazon rose more than 4% and hit a new closing high, pushing its market value above $3 trillion for the first time, helped by fresh optimism that AI demand is feeding directly into AWS growth, according to Reuters. Meta Platforms surged 6%, while Microsoft and Alphabet each climbed close to 5%, extending the post,earnings re,rating in large,cap AI names, CNBC reported.

Nvidia also added almost 3%, a sign that investors were willing to look through July's unwind in semis and rebuild positions around the same capex narrative that drove the first,half rally. The action matters because it suggests the market is again rewarding companies with visible cloud, advertising and AI revenue payoffs, rather than just punishing spending plans.

After the bell, Palantir became another focal point. The company raised its 2026 outlook after reporting another burst of US commercial growth, with management now expecting US commercial revenue in excess of $3.42 billion this year, up from prior guidance of $3.22 billion, according to CNBC. That keeps software and AI infrastructure on the watchlist again today.

Yields ease, but the Fed story hasn't gone away

Falling yields gave equities room to run, though the broader rates backdrop is still restrictive. The Fed's daily H.15 data showed the 10,year Treasury yield at 4.75% on July 31, up from 4.68% on July 30, while the 2,year stood at 4.28% and the 30,year at 5.27%, underscoring how elevated long,end borrowing costs remain even after Monday's intraday pullback in the cash market, according to the Federal Reserve.

That's the tension traders are still dealing with. The Fed held rates last week at 3.50% to 3.75%, but the policy message was hawkish enough to keep hike risk alive. Reuters, in a commodity report carried by Kitco, noted that three Fed officials who dissented in favor of a hike repeated concerns that inflation could stay stuck above target without tighter policy. In other words, Monday's equity bounce was helped by lower yields, but it did not settle the rate debate.

Oil's drop helps the bull case, but Iran risk isn't finished

The most market,friendly macro move was in crude. Brent futures fell 4.73% to $83.77 a barrel on Monday, according to CNBC, as traders pulled out part of the geopolitical risk premium after signs of US,Iran de,escalation. Reuters, via Kitco, said oil had slumped by more than $4 a barrel as President Donald Trump held off on a fresh attack on Iran while seeking a deal over Tehran's nuclear program and the reopening of the Strait of Hormuz.

But this is not a clean all,clear. Reuters reported on Tuesday that conflicting US and Iranian signals over the status of talks, along with another attack on shipping in the Strait of Hormuz, were reviving uncertainty about energy flows and regional stability, according to Reuters. For traders, that means the oil move remains headline,sensitive. Monday's drop eased inflation pressure and supported equities. A reversal would quickly tighten financial conditions again.

Gold firms, crypto softens as traders trim inflation hedges

Gold was steady to firmer as oil fell and the dollar softened. Spot gold was up 0.2% at $4,048.84 an ounce and US gold futures also added 0.2%, according to Reuters. The logic is straightforward: cheaper oil lowers near,term inflation anxiety, while a softer dollar and lower yields improve bullion's relative appeal.

Crypto was less central to Monday's market narrative, but prices were softer. Fortune's price pages showed Ethereum at $1,844.64 early on August 3, down 1.14% from the prior morning, according to Fortune. Broader crypto reporting pointed to a modest pullback in Bitcoin and Ether as traders took profits and shifted back toward equities. Unless digital assets break out of that range, they're more of a sentiment side show than the main macro driver today.

Strong factory data complicates the soft,landing trade

Monday's economic data cut both ways. The Institute for Supply Management said its manufacturing PMI rose to 55.6 in July from 53.3 in June, the highest reading since May 2022 and the seventh straight month of expansion, according to the official release reported by ISM. New orders improved to 56.7 and production jumped to 58.5.

That's good news for growth,sensitive stocks, industrial demand and cyclicals. But it also argues against an imminent dovish turn from the Fed. Stronger activity data, combined with still,elevated long yields and hawkish dissents, means the payrolls data later this week has become even more important for the next move in rates, the dollar and equity leadership.

What to Watch Today

US June JOLTS job openings data. Labor,market cooling would support the bond rally; another firm print could push yields back up.
Any fresh headlines on US,Iran talks and shipping through the Strait of Hormuz. Oil is still the fastest macro transmission channel into inflation expectations.
Follow,through in AI and cloud winners including Amazon, Microsoft, Meta, Nvidia and Palantir after Monday's sharp rotation back into growth.
Treasury yields, especially the 10,year around the mid,4.7% area and the 30,year above 5.2%. Equities can live with high yields, but not an accelerating move higher.
This week's labor data pipeline, with ADP private payrolls and ISM services on Wednesday and US nonfarm payrolls on Friday, which remains the main macro event of the week.