Stocks closed the session mixed on Monday, with the Nasdaq Composite edging lower by 0.12% to 26,370.89, as rising Treasury yields and higher crude prices pressured risk appetite. The tech-heavy index outperformed the Dow Jones Industrial Average by 58 basis points, underscoring the relative strength of growth names despite a challenging macro backdrop.
The 10-year Treasury yield climbed to 4.75%, while Brent crude settled 2.7% higher at $90.49 per barrel following renewed tensions near the Strait of Hormuz. The Dow fell 0.70%, while the S&P 500 slipped 0.33% and the Russell 2000 dropped 0.54%. Despite the day's losses, the Nasdaq managed to post a weekly gain of 0.83%, supported by strong earnings from Nvidia and Salesforce, which highlighted sustained demand for AI hardware and enterprise software.
Macro Data and Earnings on Deck
Investors now face a busy week of economic data and corporate results that could test the market's resilience. On Tuesday, the ISM manufacturing index and JOLTS job openings are due, followed by ADP private employment on Wednesday. Thursday brings initial jobless claims and the ISM services index, with the August employment report scheduled for Friday.
These releases will provide crucial signals on growth and wage pressures, which could influence the Federal Reserve's policy path. Fed funds futures currently imply a 66% probability of a rate hike in September, according to Edward Jones strategists.
Tech Earnings in Focus
In the corporate sphere, Dell Technologies and Palo Alto Networks are set to report after the close on Tuesday, with Broadcom following on Wednesday. Analysts expect Broadcom to post revenue of $29.4 billion and adjusted earnings of $3.24 per share. The company holds a Strong Buy consensus from 49 analysts, with a price target of $525.97, implying more than 40% upside.
Dell carries a Positive rating with a median price target of $500, suggesting 9.6% upside. Palo Alto Networks, despite a Strong Buy consensus, has an average price target of $366.38, which sits roughly 5% below its current share price, indicating limited near-term upside.
Christopher Rolland, an analyst at Susquehanna, expects Broadcom to deliver "slightly better" results and guidance, citing robust performance in AI networking and software. However, he cautioned that advanced-node supply constraints could limit near-term processor gains.
Valuation Support
Valuation metrics offer some reassurance. As of August 10, the Nasdaq-100's forward price-to-earnings multiple was in the 11th percentile of its prior 12-month range and below its 10-year average, according to Citadel Securities. This suggests that recent gains have been driven primarily by earnings estimate revisions rather than multiple expansion, providing a cushion if sentiment sours.
Still, the combination of elevated yields, geopolitical risks, and a packed economic calendar could heighten volatility. The performance gap between the Nasdaq and the Dow highlights the market's reliance on mega-cap tech earnings to sustain the rally. As the week unfolds, investors will gauge whether corporate results can continue to offset macro headwinds.
With the Fed's September meeting approaching, Friday's jobs report will be particularly critical. A strong print could reinforce expectations for further tightening, while a weak one might revive hopes for a pause. Either way, markets are likely to remain sensitive to data surprises in the sessions ahead.
