Wall Street Rally Extended Gains Amid Improving Sentiment and Solid Earnings

Barry Adams
05 Aug, 2026
New York City

U.S. stocks advanced on Wednesday and extended gains of the previous three sessions.

The S&P 500 Index increased 0.2%, and the tech-heavy Nasdaq Composite advanced 0.4% as investors reviewed the latest batch of earnings. 

In Tuesday's trading, the S&P500 index increased 1.8%, and the tech-focused Nasdaq Composite advanced 2.6% as global risk sentiment improved. 

The West Texas Intermediate crude oil price increased 0.3% to $76 a barrel, and the Brent crude oil price advanced 0.7% to $79.81 a barrel amid renewed worries of violence in the Red Sea. 

Investor sentiment stayed positive following the release of earnings from Arista Networks, AMD, SpaceX, Eli Lilly, and Merck. 

SpaceX reported better-than-expected revenue in the second quarter, and losses narrowed, but the massive surge in artificial intelligence infrastructure investment rattled investors. 

U.S. private businesses expanded payrolls at a slower pace in July, according to the monthly report released by ADP.

Private businesses added 44,000 net new jobs in July, following a downwardly revised 95,000 increase in June. The service sector added 47,000, the manufacturing sector expanded by 2,000, the construction sector added 1,000, and the mining sector shed 6,000.

 

U.S. Movers 

Arista Networks increased 12.6% to $214.52 after the data networking equipment company reported better-than-expected second quarter results. 

Total revenue increased 38% to $3.3 billion from $2.0 billion, net income advanced to $1.2 billion from $888 million, and diluted earnings per share rose to 95 cents from 70 cents a year ago. 

The company guided third quarter revenue of $3.3 billion, adjusted operating margin between 48% and 49%, and adjusted diluted earnings per share to range between $1.06 and $1.08. 

AMD declined 8.5% to $474.45 after the advanced semiconductor company's second quarter results fell short of market expectations. 

Revenue soared 50% to $11.5 billion from $7.7 billion, net income surged 163% to $2.3 billion from $872 million, and diluted earnings per share increased 156% to $1.66 from 48 cents a year ago. 

The continued investment in data centers supported the business momentum in the latest quarter. 

Data center segment revenue soared 107% to $6.7 billion, client and gaming segment revenue increased 6% to $3.8 billion, and embedded segment revenue jumped 19% to $977 million. 

Chief Financial Officer Jean Hu highlighted that data center growth powered the performance, representing 58% of total revenue, and projected further sales acceleration in the second half of the year.

AMD expects third-quarter 2026 revenue to be approximately $13 billion, give or take $300 million. While the midpoint beats Wall Street's average consensus of roughly $12.5 billion, some investor expectations had priced in even higher outcomes, leading to a muted market reaction. 

The midpoint of the revenue range represents a 41% increase in revenue from a year ago and a sequential increase of 13% and a non-GAAP gross margin of 56%. 

SpaceX decreased 10.8% to $111.76 after the recently listed rocket launch and connectivity company released its second quarter results. 

The stock plunged after the massive surge in capital expenditures to $18.4 billion from $2.8 billion, driven by AI infrastructure investments, rattled investors. 

Total revenue jumped to $7.8 billion from $4.1 billion, net loss shrank to $541 million from $1.0 billion, and diluted loss per share eased to 9 cents from 34 cents a year ago.