In this July 10, 2026 morning market commentary, Kenny Polcari delivers a comprehensive update on U.S. equity performance, sector rotations, and macro‑economic developments, followed by a culinary interlude. He notes that the Dow, S&P 500, and Nasdaq all closed higher, with the Nasdaq gaining 1.3% driven by a tech rally—particularly memory‑chip stocks after SK Hynix’s $25.6 billion ADR offering (the largest ever) and Micron’s $250 billion U.S. manufacturing investment to meet AI‑driven demand. He contrasts earnings outcomes: Pepsi missed expectations, blaming higher gasoline prices and reduced consumer willingness to pay premiums, while Delta Airlines beat on all metrics, suggesting consumers are reallocating spending toward experiences rather than products. Polcari observes a broader sector rotation: technology and communication services have underperformed since June, while financials, healthcare, industrials, and utilities have outperformed, indicating investors are seeking better valuations and cash‑flow stability. He highlights the Federal Reserve’s new five independent task forces, created by Jevy Warsh, aimed at overhauling Fed communication, balance‑sheet management, inflation measurement, data usage, and AI’s impact on productivity—potentially reshaping monetary policy. Fixed‑income markets saw modest bond‑price gains with yields retreating slightly; oil fell to $71.55 amid mixed geopolitical and supply narratives; gold hovered around $4,100. European markets were mixed, with Italy and Spain modestly higher. Polcari points to S&P resistance at 7,560 and a near‑term target of 7,620, while noting the SK Hynix listing may boost memory stocks without lifting the entire tech sector. He offers a brief risk‑assessment pitch, encouraging listeners to contact him for portfolio review. The segment concludes with a detailed Sicilian‑style grilled swordfish recipe, emphasizing proper grilling technique and flavor pairing with Pinot Grigio.
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Well, good morning. It's me, Kenny Polcari, coming to you live from Cape Cod. And today looks like a little bit of an interesting overcast day. So we're going to see what's happening. The sun is trying to come through, but there are clouds behind me, as you can see. Anyway, today is July 10th, 2026, and I'll be joining David Asman on Varney Co. on Fox Business at 10:00. So be sure to join us. Anyway, here are the things you need to know to get your day started. Well, tech lifted its head again yesterday. Apparently it's all good. SK Hynix, well, they raised $25.6 billion in an ADR pricing at $149 a share on the Nasdaq this morning. Pepsi disappointed yesterday while Delta Airlines crushes it. So is the consumer exhausted or not? Kevin Walsh names 5 new committees to examine the Fed structure. And what do we have at dinner tonight? We're going to have the Sicilian swordfish. Well, stocks came roaring back on Thursday after Wednesday's mess as investors decided, at least for now, that the latest round of the US-Iran strikes is not going to be the beginning of a broader regional war, and that the Fed minutes didn't honestly reflect anything that we didn't already know. At the closing bell, this is what it looked like. The Dow gained 139 points. The S&P added 61. The Nasdaq jumped 336 points, or 1.3%. The Russell rose by 36. The transports gained 450 points, or 2%. While the Equal Weight S&P added 53 points and the Mag 7 gained 450 points or 1.3% as buyers stepped right back into the risk trade. So here's what we saw. Tech stole the show, rising 2.1%. Software joined the party. Semiconductors bounced hard. Memory stocks came back to life. Cybersecurity caught a bid, and even the beaten-up quantum names found some love. In other words, investors weren't buying just one one stock. They're buying the names that they've taken a hit and now look more reasonable. Then came the latest Micron news, right, causing that stock to advance by 4.5% after they announced plans to increase their US manufacturing investment to an eye-popping $250 billion to meet what it believes will be years— not months, years— of AI-driven demand. And if you think it can't get any better than that, you better think again, because today brings what could become another one of the biggest market events of the year as SK Hynix begins trading on the NASDAQ. The South Korean memory chip, uh, leader raised $25.6 billion, making it the largest ADR offering ever and one of the largest equity offerings in history. And what's more impressive is that the deal is 7 times oversubscribed. So expect a big party at the NASDAQ today in Times Square. Now, to be clear, in South Korea, it trades at 2.18 million won, which is essentially $1,446 a share. The ADR is priced at $149. That's equal to a tenth one South Korean share. That tells you all you need to know about institutional appetite for AI, right? Why does it matter? Because SK Hynix isn't just another semiconductor company. It is the global leader in high-bandwidth memory, otherwise known as HBM. The advanced memory chips that sit alongside NVIDIA's GPUs empower today's most, most sophisticated AI models. If there's no HBM, there's no AI. It's really that simple. And that's where Micron comes in as well, right? They're in the same cohort. Now put those pieces together and it's hard to argue that the AI infrastructure buildout is slowing anytime soon. That said, the question remains, will all of the spending produce the earnings growth that investors have already priced into these stocks? And we're about to find out because earnings season is now just one week away officially, because yesterday Pepsi reported earnings and guess what? They missed. Management blaming higher gasoline prices and a more cautious consumer, arguing that elevated fuel costs have squeezed household budgets more than expected. I have a slightly different take on that. I don't think it's that consumers can't I think they're just becoming much more selective about where they spend. Consumers always have a choice, and at today's prices, they may simply be deciding that some of Pepsi's products are just not worth the premium pricing. And that's an important distinction because it speaks less to the strength of the consumer and more to the limits of pricing power. Today, the spotlight shifts to Delta Airlines. So let's see what they have to say about the consumer, because if Delta reports healthy demand for travel while Pepsi struggles to sell snacks and beverages, then that changes the story, right? It only reinforces the idea that the consumers are not pulling back across the board. They're just simply reallocating their spending power towards experiences more than products, and that they value more. And guess what? It came out and Delta crushes it. They beat, beat, beat on every metric. The margins are up, domestic revenue is up, international travel is up, seat revenue is up, and guidance, guess what? That's up too, and it's strong. Delta Airlines trading up 2.3%. So maybe the issue is not the consumer at all. Maybe it's where the consumer is choosing to spend their money. And that reinforces exactly what I've been saying, that is becoming more story about allocation, not exhaustion. Confirming the narrative. So United Airlines and JetBlue are also higher in the pre-market as well. I didn't look at American, but I'm sure that's probably higher up too. Look, the bar has been raised. Analysts have lifted earnings estimates. We talked about this, and management teams already have a very good idea of how their quarter is going to turn out. So if a company knows it's going to disappoint, the smart move is usually to pre-announce weaker guidance ahead of earnings. Why? Because then they get to reset expectations beforehand, and that often softens the market's reaction, right? Waiting until earnings day to deliver bad news is rarely a winning strategy for companies. And so this earnings season is all about justifying the premium valuations that investors have already assigned to these companies. The Street, well, we know that has already priced in an exceptional earnings growth quarter, and now management teams have to prove that those expectations are warranted. So it's really interesting this quarter is that we have not seen the usual wave of warnings. In fact, we've seen more S&P companies have issued positive guidance rather than negative guidance. Right. That's a sharp departure from the historical pattern where negative preannouncements typically outnumber the positive ones. And that tells me that management teams are either genuinely confident or confident enough that they don't have to reset expectations ahead of earnings. So here's what I think happens this earnings season. Investors become much more selective, right? I don't think that the AI story is over by any stretch of the imagination. In fact, I think we're still in the early innings of the, of the infrastructure buildout. But that's different from saying that every AI stock just keeps going straight up in a line. So even companies that beat estimates and raise guidance, like think Samsung, right? They're down 17% since they reported. Micron down 8% since they reported. They reported blowout numbers. I think that they could see some profit taking as investors ask the obvious question: is this as good as it gets? As the debate shifts from will they beat, can they possibly beat by enough? And that's why I expect the rotation that we've been discussing is going to continue. Since June 1st, you've seen technology down 7%, communication services down about 4.3%. Community— consumer discretionary is off about 2.5%. Meanwhile, where's the money gone? Financials have gained 8%. Healthcare is up 12%. Industrials advanced by 5%, and utilities are up nearly 6%. So to me, again, that's not liquidation. It's just investors repositioning toward companies with more reasonable valuations, stronger cash flows, and less demanding expectations. Again, which doesn't mean that you need to blow up your portfolio. It just means that you need to make sure that your allocations are correct for you, and you trim them if they get overweight and you add to them if they're underweight. Now, next, the Fed. Jevy Warsch officially announced that the members of the 5 independent task forces that he created following his first FOMC meeting, right? And so what's their mission? To take a top-to-bottom look at how the Fed operates, from how it communicates with the markets, how it manages its balance sheet, how it measures inflation, how it uses economic data, and even how AI is changing productivity in the economy. So don't underestimate what Warsh is trying to accomplish. This isn't just about setting interest rates any longer. He's trying to change the way the Fed thinks, the way it communicates, and ultimately the way it makes policy. And to me, that's beginning to look like a new Federal Reserve. Now, whether you agree with every recommendation or not is not the point, right? The institution now is being challenged to rethink decades-old assumptions. That's something that investors ought to be paying attention to because it could change the way the future looks. Now, bonds caught a bid yesterday. The TLT and TLH both up about, about 2%, 0.2% causing yields to retreat just a bit. The 2-year is now yielding 4.17. That's down 2 bps. The 10-year is yielding 4.54, down 4 bps. And the 30-year is at 5.05. That's down about 3 bps. But they are still at elevated levels. And thus that's going to keep a short-term lid on stocks. Oil is lower again this morning, trading at $71.55. That's down from nearly $76 on Monday as the market struggles to reconcile two competing narratives. On the one hand, you got this renewed military strikes involving Iran, which have forced traders to price in the risk of supply disruptions again. On the other hand, you've got increased production coming from— who— the United Arab Emirates, and they continue to add supply to the market, helping to offset much of that geopolitical risk premium. So until we get more clarity I think oil remains in this $70 to $80 trading range with, you know, hopefully the pressure lower, but I think it remains in that range because the market hasn't yet decided whether it's geopolitics or supply that deserves the spotlight. Gold continues to churn this morning. It's down $17. It's right there at $4,105 and it remains in that $4,043.50 trading range. There's no economic data today that's gonna drive the markets. Next one is, uh, more economic data next week. European markets are mostly higher. Germany is flat. The Eurostock is down a tenth of a percent, but Italy and Spain are in the lead, up 6 tenths and 4 tenths respectively. US futures, they're leaning lower. Dow— while Dow futures are up 90 points, the S&P is down 4, the Nasdaq's down 103, and the Russell is down 4 points. The S&P closed at 7,543, up 61 points. Short-term resistance is at 7,560. If we bust up and through that, then you look at the all-time high at 7,620 as the next target. My gut says that the SK Hynix listing is going to create all kinds of excitement in the memory space, but not necessarily the whole tech sector. So support for the S&P remains down at 7,424. You can give me a call at 561-931-0190. Let's discuss your goals, your timeline. Let's assess the risk in your portfolio and your tolerance for volatility. And as usual, I'm always happy to give you a free complimentary kind of risk assessment. Okay, so we have identified thing. We're gonna have the grilled swordfish Sicilian style. Now for this you need the swordfish steaks, like 6 to 8 ounces. You need olive oil, you need the juice of 2 lemons, you need crushed garlic, you need chopped fresh parsley, you need dried oregano, lemon zest, salt and pepper. Uh, you need tomatoes for the topping, so you need cherry tomatoes, olive oil again, and some fresh basil. Now in a bowl you want to make the sauce, so whisk together the olive oil, the lemon juice, the garlic, the parsley, the oregano, the lemon zest, the salt and pepper. Whisk it all together so it emulsifies, set it aside, and let the flavors just kind of marry each other and come together. Now it's time to grill the fish. You want to heat up the grill to medium-high. You want to brush your swordfish lightly with olive oil, and you want to season it with salt and pepper on both sides. Uh, you're going to grill it. Here's the deal: you're going to grill the fish about 4 minutes per side depending on the thickness. Do not overcook it. Now, while the fish cooks, you're going to toss the tomatoes in some olive oil and a little bit of salt. You're going to place them in a grill basket and put them right on the grill for 4 or 5 minutes, and they're going to start to burst, right? Once they do, take them off, add the torn basil. Now, when the fish is done, place the swordfish on the platter, spoon the sauce over the top, scatter then the grilled tomatoes all around the fish, and you can serve it like with baby roasted potatoes if you want, in a big salad. A cold glass of Pinot Grigio is the perfect match. Now, here's a little tip. The biggest mistake that people make with swordfish is they always overcook it. So you want to pull your swordfish off the grill just when it's barely opaque in the center. Take it off, let it rest for 5 minutes, then spoon the sauce over the top, because the hot fish is going to soak up all those bright Sicilian flavors, and you'll think you're sitting on— you know, when you go to eat it, you're going to think you're sitting on a terrace overlooking the Mediterranean rather than in your backyard. Look, like I said, it looks like it's kind of an iffy day, not nearly as bright and sunny as it was for the past 2 days. So maybe this is indicative of what we'll see in the market today. In any event, until Monday, take good care.
