US S&P 500 Index

The S&P 500 ended marginally higher overnight despite a positive open. The session was defined by two competing forces: a geopolitical relief rally in the morning, driven by a pause in US-Iran hostilities that sent Brent crude tumbling over 9% and lifted the likes of airlines and cruise lines, and a sharp intraday reversal in semiconductor stocks that capped broader index gains, e.g. AMD (-5.2%) and Nvidia (-5%).

ASML ADRs fell as much as 8.2% after reports that a Chinese state-backed company had begun mass-producing certain chipmaking machines, dragging the broader chip complex lower and reversing what had been a strong premarket move for AI infrastructure names. Earnings were a key driver of individual stock moves, with several notable after-the-bell beats. Salesforce (+8%), Autodesk (+7.1%) and Expedia (+7.8%) led gains, while Baker Hughes surged as much as +9.5%, its biggest intraday rise in over a year,after Q2 earnings beat expectations on strong industrial and energy technology orders.

After the close, Cadence Design Systems rose +4.8% in extended trading after beating Q2 estimates and raising its full-year forecast, while Welltower gained +3.9% post-market after boosting earnings guidance.  On the miss side, Amkor Technology still rose modestly after-hours despite a weaker-than-expected Q3 sales outlook of $1.95–$2.05bn versus the $2.11bn consensus estimate.

• The S&P 500 is looking a touch tired short term, being unable to rally when oil falls ~9%, and earnings continue to surprise on the upside, but this is because tech has been soft and tech now makes up ~50% of the benchmark. More economically exposed sectors within the S&P 500 did better, which are the areas we are positioned towards in the International Equities Portfolio.