Stock Market Update Today: Palantir Surges, Amazon Rallies & S&P Near Record Highs | Kenny Polcari

Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And today is Tuesday, August 4th, 2026. And here are the things you need to know to get your day started. Well, the geopolitical issues took center stage yesterday. Iran apparently is ready to play nice in the sandbox, or so they say. Oil declines, bond yields rise, yields come down just a little bit. Earnings, well, they suggest there's no recession in sight. And after the bell, Palantir crushed it. The stock is up 16% in the pre-market. Now, what do we have at dinner tonight? We're gonna have the lemon herb thighs with white wine, capers, and roasted potatoes. Okay, so stocks came roaring back yesterday. In fact, they exploded higher as investors finally got what they had been waiting for, a break in the geopolitical tensions. The Strait is supposedly open today and there are no conditions. There's lower oil prices and higher bond prices, which means lower yields. Inflation, the market's biggest worry, was apparently not a worry at all yesterday. And that's exactly the combination that the bulls needed, or they wanted to see, and allowed a lot of those investors that had panicked and sold mega-cap tech a couple of weeks ago to go plowing right back into those same names. And so I asked, what did you really do other than create noise in your portfolio? By the time the closing bell rang yesterday, the Dow gained 695 points, the S&P up 110, the NASDAQ up 540, the Russell gained 50 points, the transports gained 190, the equal-weight S&P added 80 points, while the Mag 7 added another 1,212 points on top of the 1,060 points on Friday. For a total of a 7% move in just 2 days. And what is amazing is Apple did not participate in the party. It lost another full point yesterday, 1.3%, while Amazon gapped open by another $5 only to push up another 10, putting it into the $3 trillion club before settling in up 13 points or 5%. Of the 11 sectors, consumer discretionary, communications both ended up higher than 2%. While industrials, tech, basic materials were all up more than 1%, and financials gained 7/10, and real estate ended the day up 2/10. Utilities, consumer staples, and energy and healthcare all ended the day just a bit lower. If you go further down the chain, you saw homebuilders up 2.5%, retail up 2%, airlines up 4.2%, disruptive tech up 3%, the value trade up 6/10, the growth trade up 2%, Metals and miners up 2%, software up 3%, semis up 0.5%, aerospace and defense up 2.8%, midcaps are up 1.8%, and small caps are up 1.1%. And the list goes on. But to be really clear, this rally wasn't about tech, although that was the big beneficiary. It was all about oil and the geopolitical atmosphere. And we talked about that yesterday morning. After spending weeks worrying that the conflict in the Middle East would choke off energy supplies or the Houthis would join in the fight, or the Iranians would drag the Saudis into it, the fight, or that Trump would say something inflammatory only to retract it the next day, investors suddenly had something new to chew on. Reports suggesting negotiations aimed at bringing the conflict to an end were making real progress after Trump called off what he described as a major military strike. Against Iran that was supposed to happen over the weekend. Now here's the deal, whether you like politics or not doesn't matter. Markets trade on expectations, not on opinions, and not on politics in the long term. They don't care if you're red, blue, or purple. And yesterday's expectation was simple: the risk of another major spike in oil prices had just been taken off the table once again. That sent WTI tumbling by $4.50 to settle at $80.20. Easing fears that another surge in energy prices would reignite inflation and force the Fed to rethink its outlook. Because that's certainly how the algos and many traders interpreted that move. But remember what I— what we discussed yesterday. The bond market has already been, been doing the heavy lifting for the Fed long before oil even sold off. Treasury yields had been, uh, treasury prices have been falling and yields have been climbing. The 10-year was pushing above 4.7%. The 30-year was hugging 5.27%. Evidence that financial conditions were tightening all by themselves. And what did the Fed do? Absolutely nothing. That's exactly the point that I made yesterday, and one that Kevin Warsh has been kind of whispering as well. Financial conditions tightened not because the bond market demands higher yields, it's It tightens because investors demand higher yields. And that's the market doing the Fed's work. Remember, the Fed once again only controls, uh, the overnight lending rate, the short end of the curve. It doesn't control 10-year Treasury yields. It doesn't control 30-year Treasury yields. Those rates are determined every day by millions of buyers and sellers around the world. And those, uh, and those are the rates that matter most to consumers and to businesses. Fed funds may sit— may currently sit at 3.5%, 3.75%, which I argue is not restrictive. Dare I say it's somewhat accommodative. But the 10-year Treasury yielding more than 4.7% and the 30-year above 5.25%, those are more restrictive borrowing costs. So the next time someone says the Fed has to do something, remember this. Sometimes it can do something by not doing anything. It's like investing. Choosing to sit tight and do nothing is an investment decision. Point in fact, I did nothing when tech was getting wrecked a couple of weeks ago. I rode that wave. Was it uncomfortable? Yes. Unbearable? No. And as of last night, because I did nothing and the market recovered, that portfolio value is now at a new high, proving that patience is a virtue. As long as you stay calm during a sell-off. And the ECO data was pretty, it was pretty much a balanced report. Manufacturing is accelerating, employment is improving, new orders remain strong, and prices paid is still hot, but it's moving in the right direction. Here's how to read it. The ISM report reinforced the idea that the economy remains on solid footing. Manufacturing activity surged to its strongest level in more than 4 years. New orders expanded for a 7th straight month, and the employment index, it climbed back into expansion territory for the first time in 3 years, while the prices paid index remained elevated at 71.1, confirming inflation pressures haven't disappeared, although it did ease a bit lower from last month's reading. So it's moving in the right direction. Gold continues to stay in place, not much doing, not much of anything happening. This morning is trading at $4,050, still range-bound. Now, what happened with earnings? Because that's also a big deal. We heard from Tyson Foods, they beat and their margins improved. Marriott Hotels, guess what? Leisure travel is strong, business travel is strong, and international travel is strong. I mean, have you even tried to get a hotel room anywhere in a big city? Both of these names suggest that, uh, not only the consumer but the economy remains strong, and there's nothing here that screams recession at all. After the bell, we heard from Palantir, right? PLTR. And they crushed it. Revenue up 93%, earnings per share at 41 cents versus the expectation of 34 cents. Full year guidance stronger than expected. Commercial revenue, which is a subset of total revenue, is expected to grow at 134% this year. And they took it up 16% or $18.50. This morning it's quoted up at, you know, 16%. Just another example of investors rewarding AI monetization. Now today brings us CAT, AMD, Pfizer, Merck, and SpaceX. We discussed that yesterday. I did this whole Elon Odysseus comparison. Here's the deal. CAT is gonna take the temperature on industrial demand and AI infrastructure spend. Pfizer and Merck, they're gonna speak to how big pharma is doing. AMD, it's another look at the chips while SpaceX is going to discuss the commercial space economy and satellite communications industry. It's going to be an exciting afternoon. European markets are mostly higher. Italy's up, uh, by about 1%. Germany and Eurostock up 4/10. UK's up 2/10 while France and Spain are just a tiny bit lower. This morning, US futures are higher, not much, but they're higher. Dow up 22, S&P's up 5, NASDAQ's up 135, and the Russell's up 1. So the markets are taking a breather after yesterday's surge. The S&P 500 closed at 7,600. It was up 110 points, leaving it just a hair below the all-time closing high at 7,609 set on June 2nd. There's no question about it now, we busted up and through the trendline resistance at 7,468, and, and once resistance is broken, it now becomes support on the way down. So now we're sitting just 10 points away from matching the record high. A move of 20 points or more is going to give us a convincing breakout into uncharted territory. And when markets break into new highs, there isn't anything overhead, no resistance left. There's only psychology. Now that opens the door to a run towards the high 7,800s if, if we break out, which suddenly makes the year-end S&P 8,000 targets look a whole lot more realistic. Oh boy. Do I love this. Now, for now though, we're in this 7468-7609 trading range. A decisive move above that upper band changes the conversation completely. Now, if you'd like to discuss your goals, evaluate the risk in your portfolio, simply get a second opinion, you can give me a call at 561-931-0190 or go to, uh, slatestone.com and click on the, uh, Contact Us button. I'm always happy to provide a complimentary portfolio review and risk assessment on your portfolio. Okay, so what do we have in dinner tonight? Well, we're gonna have the lemon herb chicken thighs with white wine, capers, and roasted potatoes. Now, this dish is all about the balance, right? The wine and the lemon cut through, uh, the richness. The capers add a little bit of a bite, and the butter, well, that brings everything together at the end, right? It's what happened in the markets yesterday. Oil prices backed off, inflation fears eased, the economy continued to show signs of strength. And investors finally got a chance to exhale. Sometimes all the ingredients are right there in front of you. You just need one thing, just one thing to settle down before everything comes together. Now, yesterday, that ingredient, it was oil. Now let's get on to the meal. So for this, you need 6 bone-in chicken thighs, skin on, salt and pepper, olive oil, at least 5 garlic cloves that you're gonna smash, 1 large shallot sliced, 1 cup of dry white wine. You know me, I use Pinot Grigio, Santa Margherita. You need the juice of 1 large lemon plus the zest of that same lemon. You need capers, butter, fresh parsley, and thyme. For the potatoes, you need 2 pounds of baby Yukon Gold potatoes cut into bite-sized pieces, olive oil, garlic powder, fresh rosemary, and salt and pepper. You wanna heat your oven to 425. You wanna toss the potatoes with olive oil, rosemary, garlic powder, salt, and pepper. Roast for about 40 minutes, turning once they're crispy and golden. Now pat the chicken dry, season it with the salt and pepper. Heat the oil in a large ovenproof skillet. Now sear the chicken skin side down until it's nice and golden. It's going to take 6 or 7 minutes. Flip it, cook the other side for about 3 minutes, remove it, just set it aside. Now go back to that same pan, you're going to add the shallots and the garlic. Cook it for a couple of minutes. Pour in the white wine and scrape the bottom of the pan. Let it reduce by half. Stir in the lemon juice, the zest, the capers, and the thyme. Now put the chicken back in the pan and place it in the oven for about 20 minutes. Remove it from the oven. Now you're going to swirl in some butter and you're going to finish it with the chopped parsley. When you serve this, you're going to serve this over the— you're going to put the potatoes, your crispy potatoes on the plate, and serve this right on top of the crispy potatoes. And make sure that you spoon that lemon caper wine sauce over everything. It is delicious. And you know, you can make a large mixed green salad on the side if you want. In any event, uh, it is a beautiful morning here in Florida. It's nice and sunny, although it's probably going to rain this afternoon because that's what we are— we're in August in Florida and that's what happened. Now until tomorrow, take good care.