August 3, 2026 | US Stock Market Briefing: 67% Odds of a Rate Hike as Nasdaq Surges 2%

The S&P 500 closed at 7,600.50 (+1.48%), while the Nasdaq led with a 2.13% rally to 25,913.90; the Dow added 1.32%. On this rare day where all three major indices finished higher, odds of a September rate hike by 25bps jumped to 67.2%. The market is rallying alongside rising hawkishness—capital is betting that growth can withstand tightening conditions.

Microsoft embodies today’s confidence surge. According to MarketWatch, it has posted its best performance in 26 years, erasing all losses from the full year of 2026. Communication services led with a 2.86% gain, followed by industrials (+1.85%) and non-cyclicals; everything points to pro-cycle plays. Energy fell 1.28%, healthcare slipped 0.19%, and staples lagged—defensive sectors got left behind as VIX dropped to 15.86 with no one hedging anymore.

WTI crude oil plunged 5.17% in a single day to $80.29. Such a drop is rare this year, yet there was no clear single catalyst; signals from both supply and demand sides are at play. Just remember that number for now.

Watch what the Bank of Japan does next: base money fell 13.8% YoY, suggesting their latest forex intervention may have already cost $87 billion. If confirmed, this move mirrors 2022’s tactics but burns through ammo faster.

Three big developments point in one direction: Boeing got FAA airworthiness certification for the 737 MAX-7 (after a审批 process that dragged on far too long); TSMC’s Kumamoto fab is back to full operation, easing supply chain disruptions; and Apple reportedly invited its retired hardware chief to rejoin management. Big companies are systematically clearing out their uncertainties one by one.

After hours, Amazon dipped nearly 2% despite news that Bezos sold $4.07 billion in stock. For a founder of his scale, selling at this level only triggered a modest after-hours drop—market reaction was surprisingly restrained.

On the gainers list: IES Holdings (+30.27%), AXT (+28.74%), and Integer Holdings (+20.18%) showed far more elasticity than large caps. Micron lagged, weighed down by Kioxia’s earnings report from Japan.

The 10-year US Treasury yield retreated to 4.69%, giving valuations some breathing room—but if the September hike actually happens, this level won’t hold.

Markets are currently willing to pay for growth even at the cost of rate hikes. How long this logic lasts depends on two things: first, if earnings reports start missing in the coming weeks, the growth narrative will shatter instantly; second, if today’s oil crash turns out to be demand destruction rather than supply release, then current optimism is misplaced. With a 67.2% probability of hiking still climbing, the ceiling for growth stock valuations keeps getting lower and lower.