By Fatima Drake
August 3, 2026
U.S. stock futures rose before the opening bell as investors began August with an upbeat note, but one of July's most painful trends carried into the new month: anxiety about artificial intelligence's valuations and spending patterns.
Market Opens Strong on Tech Rally
The Dow Jones Industrial Average surged nearly 700 points to a record close of 53,178.41, while the S&P 500 gained 1.48% to end at 7,600.50 and the Nasdaq Composite advanced 2.13% to 25,913.90. The broad-market index sits about 0.3% away from the all-time high it reached in early June.
Communications services and tech sectors drove the market's advance. Meta Platforms surged 6%, Amazon rose more than 4%—hitting a record $3 trillion market capitalization—and posted a new closing high. Nvidia popped almost 3%, while Alphabet and Microsoft climbed close to 5% each.
Monday's action marked a sharp about-face from tech's rocky July performance, in which the State Street Technology Select Sector SPDR ETF tanked nearly 8% as investors grew nervous over companies' spending around AI.
AI Anxiety Persists Despite Rally
Jed Ellerbroek, a portfolio manager at Argent Capital Management, told CNBC that stronger-than-expected earnings are helping turn sentiment bullish on technology stocks again. "The market is pricing in that big tech capex spending is earnings an attractive return on investment," Ellerbroek said. "Semiconductors and data center capex beneficiaries doubled or more in 2Q, then had a huge decline in July, but the fundamental truth was unchanged that whole time: demand for accelerated computing is well above supply, and the gap isn't closing."
He added that cloud computing giants are very well positioned and semiconductors remain in rapid growth mode.
However, investors are keeping their enthusiasm in check as "we've been here before," with many anticipating that geopolitical tensions may have further to go before reaching resolution if ever.
Oil Prices Ease, Iran Tensions Cool
The fall in oil prices added to the market's momentum. International Brent crude futures fell 4.73% to end at $83.77 a barrel, while West Texas Intermediate futures settled down 5.11% at $80.34 per barrel.
President Donald Trump said he canceled planned attacks on Iran, adding that talks between the two countries would resume Monday. This news was likely pushing stocks higher, with pressure on artificial intelligence-related stocks showing signs of easing up.
"Signals that the U.S. has backed off from its earlier threats against Iran were also likely pushing stocks higher, with pressure on artificial intelligence-related stocks showing signs of easing up," Michael Monaghan, partner and portfolio manager at Founder ETFs, told CNBC. "The weight of the AI sell-off is gone right as Situational Awareness got liquidated last week."
SpaceX IPO: Wall Street Stays Bullish
SpaceX added 2% on Monday after its first trade on June 12. The company's IPO has lost over $500 billion in market cap since then, but analysts remain broadly bullish on SpaceX's long-term prospects as it prepares to report its first quarterly results as a public company on Tuesday.
Deutsche Bank maintained its buy rating and $255 price target, implying 135% upside from Friday's close of $108.37. "Following the progress made on Starship Flight 13, we anticipate focus will be on timing of the next few launches given intention to attempt a second stage (Ship) tower catch," according to the bank's analyst Edison Yu.
Read more about Starship Flight 13 clearance and SpaceX's next-generation payload tests
RBC maintained its outperform rating but warned that "the lock-up expiration is a material overhang." Despite the stock lagging since its IPO, analysts expect lingering technical factors and macro sentiment to remain headwinds.
Space Exploration: Boeing Gets Green Light
Boeing shares jumped 7% after its 737 Max 7, the smallest model in the bestselling family of aircraft, received approval to fly from the Federal Aviation Administration after nearly a decade of delays. The agency said the approval "reflects years of sustained work to resolve complex technical issues and complete a thorough review of the airplane's design and supporting safety analyses."
This marks an important milestone for the aerospace sector as carriers including Southwest Airlines expected to fly the plane before the pandemic, though increased regulatory scrutiny following fatal crashes in 2018 and 2019 delayed certification.
Apple Underperforms on Weak Guidance
Apple bucked the market rally and fell 0.8% in midday trading, making it the only Magnificent Seven member on track to end in the red. The iPhone maker dropped more than 7% last week after reporting weak guidance due to supply challenges. Shares are still up nearly 13% in 2026, but the underperformance stands out against megacap tech peers.
Travel and Healthcare Sectors Move
Travel stocks rose as oil prices dropped. Cruise operators Norwegian and Carnival rose 4% and almost 2%, respectively, while American Airlines and United Airlines gained about 5% each.
In healthcare, Bristol Myers Squibb shares were more than 4% higher in premarket trading Monday while AstraZeneca American depositary receipts were down almost 6%. Talks to create a $400 billion pharmaceutical behemoth have been underway for the past several months between the two companies.
Economic Data Shows Expansion
The ISM Manufacturing PMI posted a 55.6 reading, up 2.3 points from June and the best since May 2022. Economists surveyed by Dow Jones had been expecting a 54.0 level. New export orders and backlog orders both rose 4.5 points to respective readings of 53.0 and 55.0, while production jumped to 58.5. Employment climbed to 52.8, up 3.1 points to hit the highest since August 2022 and in expansion for the first time in 33 months.
What to Watch This Week
SpaceX reports earnings on Tuesday with Wall Street focused on Starship's progress. The lock-up provision expires Thursday, which could bring volatility. Meanwhile, traders will be watching for continued stability after a volatile July as investors navigate the delicate balance between AI optimism and lingering concerns about valuations and spending patterns.
