S&P 500 earnings are growing at some of the fastest rates of the last 30 years.

With results from about 62% of S&P 500 companies in hand, earnings per share for the index is roughly 47% higher than last year, according to FactSet data. The only time we typically see growth like that is in the aftermath of severe recessions.

However, the top contributors to the S&P 500's massive quarter are hyperscalers Amazon and Alphabet. Amazon's second-quarter earnings grew 242%, and Alphabet's grew by almost 300%. But those gains were largely the result of large, non-operating, unrealized gains on equity stakes these companies hold in other tech companies:

• Amazon earnings were flattered by one such gain, largely related to its ownership stake in AI lab Anthropic, which it penciled in at $53.4 billion.
• Alphabet reported a gain of some $99 billion primarily related to its equity stake in Elon Musk's SpaceX.

Excluding Alphabet and Amazon, the blended earnings growth rate for the S&P 500 for Q2 2026 would fall to 28.8% from 47.4%. However, this would still mark the second consecutive quarter of earnings growth above 20% and the seventh consecutive quarter of double-digit earnings growth for the index.

Another element to keep in mind: the accounting conventions of the current boom in investment spending on AI data centers should almost automatically boost aggregate profits. Capital expenditures are treated differently than operating expenses. Capital expenditures are recognized as property on the company's balance sheet, with costs only recognized over time in the declining value of that property. By contrast, the companies selling stuff to hyperscalers collecting their money and count those sales and profits right away. In the aggregate, this dynamic can temporarily overstate how profitable the system is, because the bill for all that spending isn't being tallied up as quickly as the profits that spending is generating for vendors.

Federal Reserve chairman Kevin Warsh wants to reveal less about the Fed's "reaction function" — how the central bank connects economic data and news to its policy decisions. He wants financial markets to evaluate the economy directly — rather than through the lens of "what will the Fed do."

Goldman Sachs chief economist Jan Hatzius wrote that less information from the Federal Reserve would likely make the markets more volatile and market pricing more "error-prone." Markets won't stop trying to predict the Fed's actions in the face of less information — investors will likely make the same guesses, only with less evidence and a greater chance of getting it wrong.

Hatzius says participants in short-term interest rate markets price what they think the Fed will do, not what it should do. Without more information, markets will "have less information and potentially more inaccurate beliefs on which to base their thinking."

Hatzius sees two risks. Markets could underreact to a piece of data that matters to the Federal Reserve, delaying the effect of monetary policy on the economy. Or markets could overreact to information that the Fed doesn't actually think is important — pushing interest rates sharply in one direction before reversing when policymakers fail to deliver the expected move.

LPL announced it's developing Cyan, an AI agent that can take in client data and financial planning documents to produce digestible summaries and insights for clients. CEO Rich Steinmeier said in an earnings call that AI is quickly becoming a key differentiator. Fintechs and wealth platforms like FP Alpha, Zocks and RightCapital have deployed similar AI agents.

It marks a fundamental shift for financial advisors: AI is moving out of the back office, beyond meeting transcribers and email drafters, and into the core tools that are shaping client relationships.

"Nobody got into this business to assemble documents," said Jordan Hutchison, VP of technology and operations at RFG Advisory. "We're not trying to take the advisor out of the work. We're trying to take out the parts of the work they never wanted."

Even though a financial plan is the foundation of the advisor-client relationship, esoteric materials often intimidate clients. Advisors should aim to distill information into visuals and clear language. "Once you start going into jargon-land, you tend to lose people," said Toby Wade, CEO of AI-powered investment platform DeepVest.

Kevin Feig, founder of Walk You To Wealth, uses Altruist's AI agent, Hazel, for his solo RIA practice to analyze client accounts and draft simplified client-facing documents. "It's quickly becoming indispensable," he said, noting that he feels comfortable with the tool since Altruist is also his custodian. "AI started out as a notetaker … it's quickly evolving into something much broader and more beneficial for clients."

Still, some advisors remain skeptical about delegating core planning or even office jobs to AI. Communicating plans and working through dense documents should be a training ground for junior advisors, argues Trey Prescott, head of business development at Advisory Services Network. "Let the younger generations do the dirty work to develop and hone in their skills, rather than rely on a piece of AI that may or may not work," he said.

Inflation has driven up the cost of essentials like food, housing and energy, but clothing prices are climbing too. Personal finance platform WalletHub compared the cost of a men's dress shirt, boys' jeans and women's slacks to median household income across 100 of the nation's largest cities.

Gilbert, Arizona, and Fremont and San Jose, California, were the least burdensome relative to earnings, where the median resident spends less than 1% of household income on clothes each year. At the top end, Cleveland, Birmingham, Alabama and Detroit ranked as the most burdensome, with residents spending about 3% of household income on clothing.

FinCEN announced it fined a UBS wealth management subsidiary $125 million for breaking money laundering rules from 2019 to 2023. It's the highest penalty ever imposed on a US broker-dealer and follows a case in 2018 when UBS was fined $14.5 million.

FinCEN said the company never honored a pledge to fix its anti-money laundering protocols and failed to monitor some 50,000 foreign currency wires worth over $10 billion combined. In resolving the latest case, UBS admitted it "willfully violated" the Bank Secrecy Act, America's primary anti-money laundering law.

One client, FinCEN said, was linked to a Kremlin-affiliated oligarch suspected of embezzling money for politicians. UBS agreed to appoint an independent consultant to review its anti-money laundering practices and identify deficiencies, especially regarding cartels, possible narcotics trafficking, Iran, Russia and Venezuela.

The bitcoin market has plenty of reasons to freak out — the Coldcard hack, anemic institutional demand, rising real Treasury yields, and a still-unresolved regulatory environment — yet panic is nowhere to be found. Bitcoin's 30-day implied volatility index, BVIV, has dropped to 36%, its lowest level since May 31 and down sharply from highs near 60% in early June.

A market that shrugs off bad news is often considered a bullish signal, poised for a notable upswing. Still, the data is not uniformly encouraging. U.S. spot bitcoin ETFs posted $61.53 million in outflows last week, snapping a three-week streak of tepid inflows. USDT's market cap has fallen to its lowest level since October and USDC is also in a downtrend — both classical signals of tightening liquidity and subdued risk appetite. Real yields on longer-duration Treasuries have risen to their highest since 2008, denting the case for risk assets.

Against that, Bitfinex analysts note that approximately 155,000 BTC moved into the $62,000–$65,000 cost-basis range, suggesting sellers at those levels are being absorbed — a development that could keep BTC range-bound until a stronger catalyst emerges. BTC is trading back near $64,000 today.

Crypto asset manager Hashdex is set to close and liquidate its $14.7 million spot bitcoin ETF (DEFI), in what appears to be the first liquidation of a U.S. spot bitcoin offering. Hashdex cited an evaluation of assets under management, liquidity, operating costs, and investor interest.

The closure reflects a broader trend: U.S. spot bitcoin ETF inflows have dwindled as investors chased better returns from AI-related investments, with the funds posting net outflows in each of the past three months. BlackRock's iShares Future AI & Tech ETF gained 39% through July while the crypto market fell roughly 36%.

DEFI's final day of trading will be Aug. 17, after which it will liquidate and distribute cash proceeds to shareholders. The closure does not signal the end of the broader market: BlackRock's IBIT holds $47.08 billion, Fidelity's FBTC another $9.95 billion in cumulative inflows, and the total U.S. spot bitcoin ETF market holds $77.6 billion in net assets. Hashdex itself remains in the U.S. ETF market with more than $200 million across its remaining products.

Key sectors of the economy that spent years squeezed by high interest rates are gaining momentum. For years, manufacturing and construction were among the clearest signs that the Federal Reserve's tightening campaign was weighing on the economy.

Now, manufacturing and construction are early sources of job growth, helped by an AI investment boom that has so far been unconstrained by still-high borrowing costs. "The private labor market has rebounded in 2026 due to a resurgence of the highly cyclical manufacturing sector ... while a robust buildout of data centers has propelled construction employment," Troy Ludtka, senior economist at SMBC, wrote in a note.

The manufacturing sector has expanded for seven straight months after contracting for much of the past two years, according to the Institute for Supply Management's monthly factory survey. The group said its employment gauge climbed into expansion territory for the first time in nearly three years. The report also showed manufacturing output growing at the fastest rate since late 2021.

Nonresidential construction employment has climbed to a record high this year, adding about 15,000 jobs in the first six months of 2026. The commercial side of the industry accounted for virtually all of construction's net employment growth, as residential building construction shed about 10,000 jobs over the same period. That hiring surge has coincided with the historic buildout of AI infrastructure. Private data center construction spending reached an annualized $68 billion in June — a record rate of spending, the Census Bureau said.

The U.S. labor market remained on a solid trajectory in June, as employers cut back on the number of job postings but increased their rate of hiring.

The number of job openings fell 178,000 in June, to 7.36 million. The rate of job openings edged down as well, to 4.4% from 4.5%. But that's better than what the indicator was showing as recently as March.

Employers hired 96,000 more people in June than in May, pushing the hiring rate up a tick. The rate of people losing their jobs — both from voluntary quits and involuntary layoffs and separations — was unchanged at low levels.

The sharpest increases in the hiring rate were in construction (from 3.4% to 3.9%) and durable goods manufacturing (2.2% to 2.7%), consistent with the evident strength in the data center boom and other momentum in the industrial economy generating more job opportunities.

The headline allocation posture of the Milk Road Macro Index is at -0.16, CAUTION, 75% exposure. The indicator has been holding at CAUTION a lot lately despite the strongest cross-pillar growth alignment in weeks.

July ISM Manufacturing printed 55.6%, best since May 2022, and answered last week's central question in the clearest possible way. GDPNow's Q3 estimate extended from 5.0% to 6.2% rather than retracing, the real economy score moved from -0.08 to +0.07, and the stress score dropped to its floor at +0.00 with the macro buffer at full strength at +0.50.

The market side tells the same story: growth impulses moved up +0.27 on the week. Oil held below $80, copper rose, freight costs fell, and the yield curve steepened. All of this happened while financial conditions at +0.31 absorbed the Fed's divided hold and the July jobs miss without flinching.

The two pillars, the economy and the market, now seem to agree on growth. The divergence that has kept the Milk Road Macro Index in CAUTION is resolved. However, the indicator remains cautious despite the strong data, with breadth concerns and other market signals keeping the allocation posture defensive.

SpaceX posted its first earnings as a public company Tuesday — Q2 revenue of $7.8 billion beating the $6.9 billion consensus, adjusted EBITDA nearly tripling to $3.5 billion, and net loss narrowing to $541 million from $1 billion a year earlier.

The bitcoin footnote is notable: SpaceX held onto its 18,712 BTC through the quarter but the value of those holdings fell from $1.64 billion to $1.10 billion as bitcoin dropped 33%. SPCX fell 6% after-hours despite closing the regular session up nearly 10%, with the stock's first major insider unlock — 912 million shares — arriving August 6.

The Senate has yet to take up the CLARITY Act as negotiators wait for the White House to respond to a toughened ethics provision — a rewrite sent over a week ago that still hasn't received an answer.

Simultaneously, Senators Warren and Blumenthal asked SEC Chair Atkins to investigate Trump's $TRUMP memecoin, citing $3.8 billion in investor losses against Trump's own $636 million gain. The SEC has already declared memecoins outside its jurisdiction. Thune is pushing to begin the Senate floor vote this week, but without 60 yes votes in hand, the bill risks a fatal defeat heading into summer recess.

Samsung is set to put stablecoins on 800 million phones, significantly expanding the accessibility of cryptocurrency payment infrastructure to mainstream consumers through its mobile devices.

Amazon (-2.3%) slipped after founder and former CEO Jeff Bezos disclosed he is preparing to sell 15 million shares valued at just over $4 billion.

SpaceX beat revenue expectations and reduced its losses in its first quarter as a publicly traded company, delivering sharp increases in all three of its divisions: space, connectivity and AI.

SpaceX's revenue soared 92%, to $7.81 billion, in the period ended June 30, compared with a year earlier, topping S&P Visible Alpha expectations of $6.9 billion. That included:

• $4.29 billion in its connectivity division, which includes the Starlink satellite internet service, up 66% from a year earlier.
• $2.56 billion in AI revenue, which includes xAI and Grok subscriptions, up 247%.
• $962 million in space revenue, up 29%.

💸 Follow the money: SpaceX spent $15.8 billion building AI infrastructure in the quarter, helping expand its AI compute capacity to 1.4 gigawatts — more than triple where it was last year.

And that spending spree isn't just benefiting chipmakers — it's also flowing to the literal picks and shovels building the physical backbone of AI.

🚜 One beneficiary is Caterpillar, which reported 72% growth in its power generation business this morning, driven by "very strong demand" for generators and turbines used in data centers.

• Its construction segment benefited too from data center construction.
• It all helped Caterpillar top $20 billion in quarterly revenue for the first time in its history.

McDonald's CEO Chris Kempczinski told analysts on the company's earnings call this morning that about a third of its franchisee system didn't follow the recommended pricing guidance for the chain's "$3 everyday affordable price" menu launched in April.

He said the program gives franchisees wide latitude to set prices on individual items, and some restaurants saw that as an opportunity to charge more — choosing immediate margins over the long-term traffic benefits that lower prices may have delivered.

Zoom out: Comparable U.S. sales rose 0.8% thanks to higher average checks, yet that was still a sharp slowdown from the pace in recent quarters.

McDonald's blamed several factors, including a popular Minecraft campaign last year that set a high bar for comparisons and a World Cup campaign this year that failed to deliver. But it also blamed "inconsistent restaurant level execution" of one of its key value menus.

🛌 Wayfair reported its strongest U.S. growth since the pandemic in Q2, as the online furniture company continues to take market share from legacy brick-and-mortar retailers.

💰 Polymarket is in early talks with prospective investors to raise about $1 billion, with the prediction markets platform seeking a valuation north of $20 billion.

How will history remember the internet? Probably not the way we do. The history of the early 21st century seems certain to be the history of artificial intelligence — and the chapter on the internet will be about the data we created to train it.

Consider that Reddit makes about $150 million a year selling our posts to AI labs. Stack Overflow tells the same story. The question and answer site for programmers makes more money now — with no one asking any questions — than it did pre-ChatGPT when people were asking hundreds of thousands of them. The site, launched as a way for humans to teach humans how to code, has had its biggest impact teaching AIs how to code instead. Even Wikipedia — which makes money selling its publicly available data to AI labs — will likely be remembered more for educating language models than for educating humans.

If artificial intelligence defines this century, history may remember us less for building the internet than for filling it with words.

Built by Bitcoin

If the purpose of the internet turns out to be training AI, the purpose of Bitcoin may turn out to be accelerating it.

Most visibly, Bitcoin has donated much of its most valuable infrastructure to the cause. Today, for example, Bitdeer announced a deal to provide Anthropic with 121 megawatts of computing power from a data center previously used for bitcoin mining. Dozens of others have done the same. AI has been moving into emptied bitcoin mining data centers like a growing hermit crab moves into an abandoned shell.

Measured as a percentage of AI's total data center capacity, the contribution has been small. Measured by time, however, it looks substantial. A data center can be repurposed from mining bitcoin to training AIs in about a year. To build one from scratch, it might take that long just to get planning permission.

It's not just the infrastructure, though. Bitcoin has also contributed an unmeasurable amount of know-how to the effort. When hyperscalers suddenly needed gigawatts of power to train and run LLMs, they inherited an industry of utilities, engineers, and developers that already knew how to make it happen.

In addition to the miners that brought their talents to AI, Haseeb Qureshi notes that "the biggest neoclouds are almost all ex-crypto talent." His conclusion that "without crypto, the current AI boom would not have been possible," is almost certainly an overstatement. AI was an inevitability nearly a century in the making. But crypto miners are part of the story of why it's happening now — which might be what they're ultimately remembered for.

SpaceX's first-ever earnings report showed better-than-expected revenue results. The scale of Elon Musk's capital spending plans seemed to unnerve investors, with SpaceX down in the pre-market session despite the strong results.

McDonald's is working to address challenges in its U.S. operations, with focus on execution of its value menu strategy and marketing effectiveness.

S&P 500 futures are in the green this morning after the index closed at a new all-time high yesterday at 7736.52, up 1.8%.

Situational (A)wareness: The AI stocks of the highly leveraged hedge fund Situational Awareness that were scooped up at a discount by Citadel proved to be a boon for Ken Griffin's firm. Its flagship fund surged nearly 6% in July.

Tech shares led the way, as retail favorite Palantir Technologies soared 29.5% after its second-quarter results showed strong sales of its AI software platform to corporate clients. Palantir's ability to profitably sell AI services appeared to help reinvigorate the AI trade, with semiconductor stocks and makers of other IT hardware that data centers need jumping.

American producers of components called transceivers — used to connect fiber optic cables that carry data — also rose after reports that the Trump administration was considering banning similar products from Chinese competitors on security grounds.

Industrial stocks have risen amid growing proof that cash from the AI boom — driven by an expectation of almost $800 billion of capital expenditures by hyperscalers this year, according to FactSet data — is working its way deep into the industrial tissue of the U.S. economy. The S&P 500 industrials are up 20% year to date.

The $120 million hardware wallet hack that began July 30 and is still ongoing has produced an unexpected side effect: a sharp spike in bitcoin network activity. The number of unconfirmed transactions waiting in bitcoin's mempool hit 89,031 on Tuesday — the highest since February 2025 — as holders rattled by the Coldcard exploit rushed to shuffle their coins to exchanges and fresh wallets. Santiment data shows active addresses climbed to a three-month high of 712,000 and whale transactions reached a five-month high of 61,800. Higher network activity is generally constructive for valuations, but so far bitcoin has neither rallied nor dropped materially and remains boxed in the $62,000–$65,000 range it has held since May.

The Clarity Act remains the most immediate policy binary: the Senate has a three-day window before its August 10 recess, with passage-by-year-end odds now at just 23% on Polymarket — down from roughly 75% in mid-May — and a proposal to attach prediction-market restrictions adding further process risk.

The longer-duration macro headwind identified by Bitfinex is the 10-year real yield, now at 2.41% — nine basis points below the 2.5% threshold above which the exchange says bitcoin has never traded, meaning there is no price history above that line. If the real yield clears 2.5% and holds, Bitfinex says the macro tailwind for bitcoin is gone.

Arthur Hayes thinks most investors have the AI trade misfiled. In a new essay, the Maelstrom co-founder and BitMEX founder argues the ongoing data-center buildout is a credit story like 2008 — not an earnings story like a typical tech boom.

SpaceX reported better than expected revenue of $7.8 billion, up 92% year over year, in its first post-IPO earnings Tuesday. But shares fell 6.6% in after-hours trading when investors saw how much the company led by Elon Musk is spending on AI capabilities. While SpaceX's net loss narrowed to $541 million from $1 billion a year ago, AI spending more than doubled to $15.8 billion from $7.7 billion in the first quarter.

The immediate path to profitability doesn't go through the moon or Mars. It starts with AT&T, Verizon and T-Mobile. Executives said SpaceX's connectivity unit, home to its highly profitable Starlink satellite internet service, will poach customers from the major wireless operators. In what could make it a full-fledged competing carrier, President Gwynne Shotwell added the company "definitely intend[s] to build out terrestrial components" to its network, noting that spectrum purchased from EchoStar last year already has some.

The S&P 500 just closed at its highest level on record. It added a staggering $1.2 trillion in market cap in a single session. This marks the 27th time in history the Dow surged 1,000 points. Twenty-five of those historical moves happened under President Trump. We are witnessing a historic momentum shift across global equity markets.

Treasury Secretary Scott Bessent noted that small business formations are heavily accelerating. This proves the current expansion is much broader than a crowded tech trade. The macro trading environment has fundamentally shifted in the last forty-eight hours.

Private employment data suggests that the labor market might be tighter than headline hiring numbers alone suggest, with worker pay accelerating alongside lackluster jobs growth.

By the numbers: Private employers added just 44,000 jobs in July, down from 95,000 in June and the weakest monthly gain since January, according to ADP. But annual pay growth for workers who changed jobs accelerated to 7%, the fastest pace since August 2025, while pay for workers who stayed put held steady at 4.4%.

Construction added just 1,000 jobs in July, but pay for construction workers changing jobs is at a record high, reflecting strong demand from AI-related data center construction and a limited supply of experienced workers. Education and health services led all industries with 36,000 new jobs last month.

The Bank of America Institute said its payroll gauge, based on customer deposit account data, accelerated to 2% year-over-year in July from 1.7% in June, with hiring strongest among lower-income workers. After-tax wage growth for lower-income households accelerated to 5.2% last month, surpassing pay growth of higher-income households for the first time since late 2024.

Situational awareness: The U.S. services sector continued to expand in July, with the Institute for Supply Management's Purchasing Managers' Index inching up 0.1 percentage point, to 54.1%.

But companies signaled a pullback in hiring, and price pressures hit their highest level since April 2023.

The sell-off in bonds has made it more expensive to buy a house.

Driving the news: The average rate on a 30-year fixed-rate mortgage rose to 6.81% last week, the Mortgage Bankers Association said this morning, the highest in a year. Mortgage applications fell 2.9%.

It reflects a surge in global bond yields. Longer-term rates moved higher after Federal Reserve chairman Kevin Warsh offered little guidance as to whether or when the Fed may raise rates to combat elevated inflation. That has particularly cut into refinancing activity, with the Refinance Index falling 1.9%.

What they're saying: "Application volume for both refinance and purchase loans declined for the week, and are now running behind last year's pace, indicating that higher mortgage rates have weakened overall demand," Mike Fratantoni, MBA's chief economist, said in the release.

Yes, but: Bond yields and mortgage rates have both eased some this week amid a de-escalation of the Iran war. Mortgage News Daily put the 30-year rate at 6.75% yesterday, down from 6.82% at the start of the week.

Of note: Spreads between longer-term bond yields and retail mortgage rates have fallen significantly in the last few years. The gap between average 30-year mortgage rates and the 10-year Treasury yield has been around 2 percentage points this year. It approached 3 percentage points in 2023.

ISM manufacturing printed 55.6

ISM is one of the cleanest real-time reads on the health of the U.S. economy: Above 50 indicates the economy is expanding, while below 50 indicates contraction.

At 55.6, it's the strongest reading since May 2022 and marks the seventh straight month of expansion. The economy is speeding up and this is often the period where stocks go parabolic.

S&P 500 net profit margins just hit 16.7%

Net profit margin (the percentage of every dollar of revenue a company actually keeps as profit after all expenses) just hit 16.7% across the S&P 500. That's the highest reading FactSet has recorded since they started tracking the number in 2009.

Companies aren't just growing revenue, they're also becoming more profitable at the same time. A booming economy and record profitability at the same time is exactly the setup you want to be owning stocks in.

Inflation is easing

Inflation cooled in the latest reading after several months of increases. One reason is the easing of geopolitical tensions surrounding the U.S.-Iran conflict which had previously pushed energy prices and inflation expectations higher. The economy is accelerating and inflation is coming down.