In this July 31 2026 market‑commentary video, Kenny Polcari opens with a sunny Cape Cod backdrop and delivers a rapid‑fire recap of the previous trading day and the outlook for today. He explains that the dramatic 8.5 % rally in semiconductors and Microsoft’s record‑breaking $450 billion one‑day market‑cap gain were not a sudden AI revival but a correction‑driven value reset after a 30 % sector sell‑off. Technicals, especially oversold RSI readings on the broader market and the semiconductor sector, signaled the bounce. He reviews macro data – June PCE in line, upcoming Employment Cost Index and University of Michigan consumer sentiment – and notes oil’s volatile price range amid Middle‑East tensions, while bond yields remain elevated. Earnings highlights include Apple’s supply‑constraint warning that triggered a 7 % sell‑off despite solid results, versus Amazon’s 37 % AWS revenue surge and $220 billion AI capex increase that lifted the stock 12 %. Meta remains in a “wait‑and‑see” mode. He previews today’s earnings calendar (ExxonMobil, Chevron, AbbVie, Moderna, Colgate‑Palm‑olive) and surveys global markets: Asian indices (KOSPI +17 %, Taiwan +8 %, Japan +4 %) rebounding on chip gains, European indices up ~1 %, and US futures pointing higher. Technical focus turns to the S&P 7,300 support level and the 7,468 resistance trendline, questioning whether the rally can hold. Polcari closes with a personal call‑to‑action for complimentary portfolio reviews and a culinary metaphor – a risotto al salto recipe – likening the transformation of leftover risotto into a crisp, superior dish to the market’s rebound of undervalued tech and semiconductor stocks.
Chapters
Well, good morning, it's Kenny Polcari, your host of the party, and today is Friday, July 31st, 2026. Another month has gone by and it is the end of my time here on beautiful Cape Cod. And what a glorious day it is. The sun is out, the sky is blue, and the water is calm. And maybe that's going to speak a lot to what happens in the markets today. In any event, here are the things that you need to know to get your day started. Well, wait, what happened yesterday? The semi-surge. Microsoft adds $450 billion in value. The RSIs, well, they really told the story. Oil, bonds, and gold are all churning kind of in line. Apple, well, they run into a supply issue and the stock gets sold. Amazon, they monetize AI and the stock gets bought. What do we have for dinner tonight? We're gonna have the risotto al salto. We'll get to that in a minute. What a difference a day makes. Just 24 little hours. Stocks exploded higher yesterday. If you listen to the media, You'd think that investors suddenly decided that AI was alive again. Well, it's not really what happened. The semis, which had been crushed down nearly 30% off their highs, simply became too cheap to ignore, and buyers stepped in and took the sector up 8.5%. Oh, and Microsoft, you know, the one that they tossed out the window over the last couple of months? Yeah, well, that gapped up by 47 points and by the end of the day surged by 15.5% or $60 a share, adding $450 billion in market value in one day, the largest one-day surge in any stock's capitalization in history. So at the end of the day, the Dow gained 614 points, 1.2%. The S&P up 121 points, 1.7%. The Nasdaq up 680 points, or nearly 3%. The Russell added 40 points, or 1.5%, while the Mag 7 added 640 440 points, or 2%. Now the other two, the Transports and Equal Weight, well, they lost ground. The Transports fell 377 points while the Equal Weight lost 18 points respectively. Of the 11 sectors, it was a mixed performance. Industrials, financials, tech, consumer discretionary, energy all ended the day a little bit higher, while utilities, consumer staples, communications, healthcare, basic materials, and real estate ended the day lower. And let's be clear about what happened, no matter how the media frames it. Demand for AI did not ever disappear. The AI story hasn't been falling apart at all. What happened was exactly what we've been talking about now for weeks. Expectations had just gotten way ahead of themselves and valuations became stretched and investors demanded a reset. In the end, it was the recognition that the selling had simply gone too far, creating opportunities almost everywhere you looked. Now, the technicals told the story. The Relative Strength Index, right, had fallen to oversold levels on the index and, uh, and across the semiconductor sector, while many individual names had put— been pushed deeper even into the oversold territory. And that's often when buyers emerge, because markets, like pendulums, have a habit of swinging too far to the left, and then they swing— come back and they swing too far to the right. And the semis, well, they had swung way too far to the left. So expect to see a lot of action as it starts to swing back towards the center and then off to the right again. So let's just put the whole AI dead narrative nonsense to bed. AI was never dead, and yesterday wasn't the birth of a new AI boom. It was investors recognizing value after a healthy correction. And the funniest part about all this, the same guys who ran out the doors over the past month are the same guys who ran back in the doors yesterday, right? Think the hedge funds and the Momo guys and the algos, right? The momentum guys and the algos. And remember, a 30% correction in a sector that was up nearly 100% year-to-date, that's not the end of the story at all. It's just the price of admission, right, for the next leg higher. We're taking it too high, I had to come back a little bit, adjust. Shake the branches. Now, the ego data, and there was a lot of it, did not raise any concerns at all. The key data point, which was the June PCE, came in just as expected, and that helped relieve some of the angst, at least for yesterday, because next month's read on CPI, PPI, and the PC, well, that could look very different based on what oil is doing and what the conflict in Iran is all about. Oil was all over the place yesterday, traded as low as $82 and as high as $84.30. It settled at $83.55. This morning it's down a buck at $82.45 as the conflict in the Middle East continues to rage on. Now, at this point, oil could go either way. Just depends on the headline of the day. And while the headlines this morning point to no attacks overnight, we know that that can change on a dime. Bonds, they retreated just a tiny bit, but yields remain elevated this morning. The 10-year is at 4.64%. The 30-year is at 5.18%. Still levels that are going to keep a lid on stocks. After the bell, we heard from Apple and Amazon, and it was just like Microsoft and Meta. It was another AI story with two very different messages. So let's start with Apple. On the surface, the quarter was fine. Revenue beat expectations, earnings beat expectations, iPhone sales were solid, Mac sales are strong, and the stock got sold. Why? Well, because the market wasn't focused on what Apple just said. It focused on what Apple said Next, Timmy warned that the supply constraints, particularly around advanced chips and memory that they need for AI-enabled devices, could limit growth in the coming quarter. And that's kind of a story that we've heard, right? Think about MU. In other words, demand is there. They're just not able to build enough products to satisfy their demand. That's not a demand problem. That's a supply problem. But Wall Street doesn't like uncertainty. And when management starts talking about constraints, The Momo guys and the algos hit the pause button and then they hit the sell button. This morning the stock is quoted down 7% at $309. Now let's talk about Amazon. That report was completely different. Revenues beat, uh, Amazon Web Services revenue surged by 37%, the fastest growth in years. Advertising remains strong, and perhaps more importantly, management raised its capital spending plans yet again taking the AI investment to roughly $220 billion. Now, if this had been 6 months ago, investors might have panicked over another massive increase in spending. Not anymore. Why? Because just like Microsoft, Amazon showed that the money is already generating results, generating revenue. AWS is accelerating, not slowing down. Demand for AI infrastructure continues to to exceed available capacity, and businesses are not pulling back. They're asking for more, and that's the difference. This morning, the stock is quoted up 12% at $263.50. Remember, we've been saying this all season. These companies have to prove that spending is translating into revenue growth, customer demand, and future earnings. Microsoft proved it. Now Amazon proved it. Guess what? Both got rewarded. Meta, well, that's still asking questions. It's still asking investors to believe that the payoff is coming. Apple is now dealing with supply constraints, and that may delay part of its opportunity. And so some investors chose to sell. I did not, nor am I going to. And the economic calendar, well, we got the— we're going to get the Employment Cost Index today, one of the Fed's favorite inflation gauges because it measures wage growth across the whole economy.. It's expected to come in at up 0.8%, which is down from 0.9%. And that matters because wages are one of the stickiest components of inflation. If wage pressures continue to moderate, it reinforces the idea that inflation is cooling without the economy rolling over. And while that sounds good, the inflation— this inflation story is really all about oil. If oil drops in price, the inflation narrative cools completely. If not, well, then hold on to your hats. Now we're also going to get the final read on the University of Michigan consumer sentiment, right? Giving us yet another look at how confident— how confident Americans are feeling about their jobs, about their finances, and about the economy. Here's how it works. 100 is essentially the neutral line, like all systems go. The index will either be above or below 100 depending on how consumers feel. Historically, it ranges from 50, which is extreme pessimism, to about 110, which is extreme optimism. Today's report expected to be at 54, suggesting that consumer sentiment remains stuck near recessionary levels despite an economy that continues to expand. We are nowhere near a recession, which is why it doesn't make sense. That's the disconnect. Consumers say that they're worried, yet they keep spending. Now, earnings today are not about AI. It's about energy, healthcare, consumer staples, and biotech. So look for results from ExxonMobil, Chevron, uh, AbbVie, Moderna, and Colgate-Palmolive. And let's hope that they're strong because that would suggest a healthier foundation for the broader market. Overnight, the South Korean KOSPI surged by 17%. Taiwan up 8%. Japan was up 4%, which is not surprising because those markets had corrected by 44% on the KOSPI and 17% both for Taiwan and Japan. Chip stocks around the world are suddenly back in vogue. European markets are all higher, all up about 1% across the board. And to end the week, guess what? US futures are up too. Dow's up 290, the S&P's are up 40, the Nasdaq's up 350, while the Russell is up 17. Now tech is on fire, and more specifically the chip sector, which is already up 4% in the pre-market this morning. This on top of the 8.5% move yesterday. The S&P now closed at 7,437, up 121 points. Now it looks like that 7,300 level that we talked about in fact did hold, and that's causing investors to get more comfortable with dipping their toes back into the tech space. Trendline resistance is right here at 7,468, and it looks like we're going to probably pierce it on the opening. The question is, can we hold it? And that's what today is really about. Yesterday proved that buyers are willing to step back into tech after a vicious reset. Today we'll find out whether they have enough conviction to want to stay there. Now remember, one day doesn't make a trend, but it is how trends begin. Remember, if you'd like to discuss your goals, evaluate the risk in your portfolio, or simply get a second opinion, feel free to give me a call at 561-931-0190. I'm always happy to provide, uh, a complimentary portfolio review and risk assessment for your total portfolio. Okay, so I was thinking, thinking, thinking, how could I come up with a recipe that kind of mimicked or made you feel, uh, uh, in sync with what the markets are doing? And here's a perfect dish. It's called risotto al salto. Now, it's no better metaphor for today's market reaction than this dish. It's a classic dish from Milan. What you do is you take yesterday's leftover risotto and you press it into a pan, and then you you brown it and then you flip it. What comes out on the other side is a crispy golden and honestly better dish than it was the first time around. That's like Microsoft or any one of the semis in a nutshell, right? So here's what you need. You need 2 cups of leftover risotto, cold, right? Day old, right out of the fridge. You need butter, fresh grated Parmigiano cheese, Parmigiano-Reggiano. You need 1 egg, 2 eggs depending on how much you're making. You want to beat them, and then you need finely grated breadcrumbs. You want to mix the cold risotto with the beaten egg and, and add a handful of the Parmigiano until it all holds together. Then you're going to melt the butter in a nonstick skillet over medium heat. Don't turn it way, way up. Now press the risotto into the pan, right? About a half an inch thick. Make it all kind of like a big pancake, right? Let it sit there undisturbed for 4 or 5 minutes on medium because you want the crust to form on the bottom. Don't rush this part because the crust is the whole point. Now slide it back onto the plate, invert it, and then put, put it back into the pan and let it cook for another 3 or 4 minutes on the other side. When serving, you're going to finish it with a little more Parmesan on top. You're just going to put it right on top. It's hot, so the Parmesan will get a little melty into it. It is delicious, and it's a perfect dish. It's a Friday, you're going into the weekend. I'm sure there's rest— leftover risotto in the fridge, um, and if there isn't, make it today and then have it tomorrow. Look, it is a glorious day here. I'm hoping it's going to be a glorious day in the markets as well. Until next time, take good care.
