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SpaceX stock is nearly 10% below its IPO price.
Credit: Photo by Brandon Bell / Getty Images

Key Takeaways

• SpaceX shares dropped more than 3% Monday, marking seven straight days of losses and a new low.
• The stock is down nearly 50% from the record high set just a few days after its historic IPO in mid-June.
• Key upcoming events include SpaceX’s first earnings report as a public company and the expiration of agreements that prohibit early investors and employees from selling the stock.

SpaceX is experiencing significant turbulence.

Shares of SpaceX (SPCX) fell more than 3% Monday to close at a fresh low of just below $120, extending their decline to a seventh consecutive session. The stock is down 47% from its record high above $225 set a few days after the company’s record-breaking IPO in mid-June.

The latest losses followed a series of setbacks for the company, which this morning scrubbed a Falcon 9 launch that was scheduled to take 24 satellites into orbit from the Vandenberg Space Force Base in California. SpaceX also aborted a Starship flight test last Thursday.

The space exploration, satellite connectivity and AI company still ranks among the biggest companies in the U.S., with a market capitalization of nearly $1.6 trillion. But the weak performance of the stock recently is reportedly giving other AI IPO-hopefuls cold feet, which would make sense given the chilly reception of more recent offerings.

SpaceX is set to attempt its Starship test flight again this Thursday. Meanwhile, CEO Elon Musk posted “Grok for Excel is live,” on his social media account earlier this afternoon, referencing SpaceX’s conversational AI chatbot.

There are two other noteworthy events that investors will want to follow closely: SpaceX’s inaugural earnings report as a public company, which has not yet been set but is expected in August, and the first of a set of lock-up expirations that will free up employees and early investors to sell some 911.5 million shares on the second trading day immediately following its earnings report.

Intel shares have nearly tripled in value since the start of the year
Credit: Stanislav Kogiku / SOPA Images / LightRocket / Getty Images

Key Takeaways

• Intel’s latest quarterly results are set to be released Thursday afternoon, with options traders anticipating its stock could swing up to 11% in either direction by the end of the week.
• Analysts expect Intel to report growing revenue and profits, as the chipmaker’s sales have been boosted by AI demand in recent quarters.

Intel is slated to report earnings after the closing bell today, with traders anticipating a sizable move from the chipmaker’s stock following the results.

Based on recent options pricing, traders expect Intel (INTC) shares could swing up to 11% in either direction by the end of the week. A move of that size from Wednesday’s close could see the shares rebound to $114, where they were earlier this month, or drag them below $92.

Intel shares have soared nearly 180% since the start of the year amid speculation about new deals after a flurry of high-profile agreements and better-than-expected results, though they’ve slipped close to 30% from last month’s highs after a broader pullback in the AI trade in recent weeks.

Why This Matters to Investors

Intel stock has been volatile lately, along with other semiconductor stocks, amid some worries about the sustainability of the tech industry’s spending on AI.

UBS analysts recently lifted their price target for Intel to $121 from $83, telling clients they see strong demand for Intel’s data center hardware potentially supporting higher prices. The analysts said they expect investors to be watching for updates from Intel on its manufacturing capabilities, as well as potential new customers for Intel’s foundry business.

Intel is projected to report second-quarter revenue of $14.43 billion, up about 12% year-over-year, according to estimates compiled by Visible Alpha. Adjusted earnings per share are seen coming in at 22 cents, up from an adjusted loss of 10 cents per share a year ago, when newly appointed CEO Lip Bu-Tan was in the midst of launching a turnaround plan for the chipmaker.

Amid lingering uncertainty around Intel’s turnaround, a number of Wall Street analysts have hesitated to recommend buying the stock. Of the eight analysts tracked by Visible Alpha, four have called it a “buy,” while four have maintained neutral ratings. Their mean price target of $128 would suggest upside of 25% from Wednesday’s close, bringing the stock back near last month’s record.

This article has been updated since it was first published to reflect more recent prices and analyst estimates.

Volatility in high-flying stocks has risen to record levels outside recession years, Goldman Sachs said.
Credit: Photographer: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• Volatility in momentum stocks has risen to record levels excluding recession years, according to Goldman Sachs.
• Morgan Stanley strategists think the unwinding in high-flying stocks could be good for the S&P 500 overall, saying “8000 is very achievable.”

“Buy high, and sell higher” used to be a working investment strategy, until it wasn’t.

The momentum trade, or buying recent winners in the stock market, has unwound, with the sell-off intensifying around chip stocks in particular. For example, a popular fund employing that strategy, iShares MSCI USA Momentum Factor ETF (MTUM), had declined 12% since the start of July through Friday’s close. The S&P 500 was roughly flat over the same period.

“Painful volatility in popular AI infrastructure stocks has renewed investor interest [in] investment themes outside of AI,” Goldman Sachs’ Ben Snider wrote in a Friday report, observing that the so-called momentum factor has erased gains since the end of April as its volatility surged to the highest level of its 45-year history excluding recession years.

Why This Matters to You

Though the decline of high-flying chip stocks might worry investors about the AI trade, as well as the overall state of the market, investment strategists think the S&P 500 could go higher on the back of less trendy names.

Though some think the recent pullback in chip stocks could represent a buying opportunity, Snider said “history, positioning, and lack of a favorable catalyst point to continued near-term challenges” for the AI infrastructure momentum trade.

Meanwhile, Morgan Stanley’s broadening thesis—that the S&P 500 will be driven higher by more than just the AI trade—is playing out with interest recently being reallocated to areas where Wall Street firms are raising earnings-per-share estimates sharply, according to Morgan Stanley equity strategist Michael Wilson. Consumer discretionary goods and transports, for example, have outpaced the S&P 500 by 12% over the past two months, he said.

The broadening can also be seen in the relative performance of a fund that invests in S&P 500 stocks equally rather than by their market capitalization—the Invesco S&P 500 Equal Weight ETF (RSP) had risen 11% year-to-date through Friday, just edging out the S&P’s 9%.

On the off chance that the decline in high-flying AI stocks spills over into other categories, the S&P could move down to 7000, Wilson said. But after that, the bull market will return “in earnest,” he added, saying the firm’s year-end target of 8000 remains “very achievable.” That implies upside of 7% from recent levels.

The PHLX Semiconductor Index fell 10% last week as the memory and chip rout deepened.
Credit: Michael M. Santiago / Getty Images

Key Takeaways

• Memory stocks rebounded on Monday after sliding last week amid concerns about the durability of AI spending and efforts by tech giants to control their memory costs.
• Morgan Stanley analysts on Monday argued the sell-off had created “a strong entry point” to stocks such as Micron and Sandisk that, despite double digit declines in recent weeks, are still worth at least three times what they were at the start of the year.

Chip stocks rose on Monday as investors bought the dip following last week’s rout. 

The PHLX Semiconductor Index (SOX) was up nearly 2% in recent trading, led higher by shares of Marvell (MRVL) and Micron (MU), which both gained about 5%. Memory stocks that have slumped in recent weeks rose, with Sandisk (SNDK) and Western Digital (WDC) each advancing more than 4%.

The SOX index fell 10% last week as the memory rally that powered markets to record highs throughout the second quarter cooled off. Chip investors were also rattled late in the week when Chinese start-up Moonshot AI released a new open-source model that rivals the capabilities of leading U.S. models from Anthropic and OpenAI. The model revived concerns about runaway spending on AI infrastructure and tech giants’ ability to recoup their enormous investments. 

Why This Matters to Investors

Monday’s rebound signaled investors still have an appetite for the memory stocks that have been the face of the AI rally through most of 2026.

Morgan Stanley analysts argued in a note on Monday that the recent sell-off “has created a strong entry point” to stocks benefiting from chip shortages “that show no signs of abating.” The analysts estimate memory prices are up 25% this quarter, a slowdown from prior quarters, but one that they argue was “inevitable” and arguably necessary to prevent demand destruction.

Booming demand for memory and data storage equipment from AI data centers has vastly outpaced supply over the past year, driving up prices and costs across the tech sector. Memory suppliers are increasing their manufacturing capacity to meet demand while buyers are signing multi-year purchasing agreements to lock in supply at a predictable price. 

Some investors worry that added capacity and long-term agreements will weigh on prices and constrain suppliers’ explosive earnings growth. Wall Street also fears prices have risen so much and the shortage is so acute that memory buyers are “de-speccing,” or re-engineering products to reduce their memory needs. For example, Nvidia is believed to have reduced the memory content of its racks “fairly materially,” according to Morgan Stanley.

The firm’s analysts on Monday acknowledged that purchasing agreements would “cap the amplitude of the cycle,” but they argue the agreements are a long-term positive for the stocks. “Several years of earnings that are climbing from the current run rates are likely more conducive to high valuations than a single very strong year,” the analysts wrote. And though de-speccing efforts “could dampen pricing at the margins,” the fact that buyers are going to the effort of re-engineering around memory speaks to its importance, and thus the durability of demand. 

While Morgan Stanley believes AI accelerator suppliers such as Nvidia (NVDA) and Broadcom (AVGO) offer investors the best risk-reward opportunity, “memory is catching up quickly” given the severity of the recent sell-off. Shares of Sandisk and Micron, the memory rally’s standouts, have shed a respective 39% and 27% of their value since hitting record highs late last month. Still, the stocks are up 500% and 200%, respectively, this year.

Shares of the Chipmaker Are Rising to Start the Week

AMD’s Helios rack-scale system could bring the chipmaker in closer competition with Nvidia.
Credit: Ian Maule / Bloomberg / Getty Images

Key Takeaways

• AMD said Monday that it’s gained Microsoft as a customer for its Helios rack-scale system, which could bring it in closer competition with Nvidia.
• The chipmaker is set to host its “Advancing AI” event later this week, which could bring more announcements regarding its latest products.
• AMD shares, which have more than doubled this year, were up 4% in recent trading.

A major new customer for Advanced Micro Devices’ latest tech has the chipmaker’s stock rising to start what could be a pivotal week for the Nvidia rival.

Shares of AMD (AMD) were up more than 3% around $513 in recent trading after the company said it’s added Microsoft as a customer for its Helios rack-scale system, which could bring the chipmaker in closer competition with leader Nvidia (NVDA). Other semiconductor stocks also gained, after losing ground late last week.

The announcement comes just ahead of AMD’s two-day “Advancing AI” event starting Wednesday, where it’s expected to showcase its latest AI products and partnerships. CEO Lisa Su is set to headline a keynote address scheduled for 12:30 p.m. ET Thursday. (You can watch it here.)

Analysts at Bank of America said in a note Friday that AMD could also offer “greater visibility into 2027 deployments, production ramps, and broader hyperscale adoption” at the event, with a more ambitious update to its longer-term outlook based on growing AI demand.

Why This Matters to Investors

The addition of Microsoft to AMD’s early Helios customers, which also include Meta, OpenAI and Oracle, could mark a strong start to the week for the chipmaker.

Jefferies analysts, who told clients last week that they anticipated Microsoft would be a likely new customer for AMD’s latest chips, along with Anthropic, said such deals would represent a “major positive for the stock and reinforce confidence in AMD’s ability to compete at the highest level without incentives.”

Wall Street analysts are widely bullish on AMD. Jefferies, along with six of the eight other analysts with current ratings surveyed by Visible Alpha, have issued “buy” or equivalent recommendations, compared to two neutral ratings. Their mean target around $545 would suggest they still see about 6% upside for the stock after a strong run this year, despite a recent pullback for the AI trade.

With Monday’s gains, AMD stock has risen roughly 140% this year, making it one of the best-performing S&P 500 stocks of 2026 so far. It’s more than tripled over the past 12 months.

Federal Reserve Chairman Kevin Warsh testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing on Wednesday, July 15, 2026.
Credit: Tom Williams / CQ-Roll Call, Inc via Getty Images

KEY TAKEAWAYS

• AI-related spending is driving inflation and could lead to higher Federal Reserve interest rates.
• While AI may boost productivity and lower prices long term, its current demand is raising costs.
• Higher energy prices and AI-driven inflation are key concerns for the Federal Reserve’s policy decisions.

Everything may get cheaper one day thanks to artificial intelligence—but first, AI investments could lead to sticker shock.

There are endless debates over AI, from how much it’ll displace workers to whether it’ll make the economy more productive over time. But what’s clear is that AI-related spending is driving growth today, analysts say, which could spur inflation and force the Federal Reserve to raise interest rates.

The AI buildout “has created an insatiable demand for capital,” Ed Yardeni, a veteran economist and president of Yardeni Research, wrote recently. Jobs in AI-related fields are growing, as are those in the construction and manufacturing sectors, as new data centers get built, Yardeni noted.

Buoyant stock markets “have made investors feel wealthier and spend more freely,” he wrote. And memory chip prices have “skyrocketed,” he added, forcing consumer technology companies like Apple to raise prices and adding to AI-related inflationary pressures.

“Over the long term, it should deliver disinflationary productivity growth,” Yardeni wrote, with AI keeping the “Roaring 2020s” economy thriving. But right now, he added, AI is “currently fueling Fed hawkishness.”

Why This Matters

AI could reshape inflation before it lowers costs, influencing borrowing costs, markets, and the broader economy. The Fed’s response could affect consumers, businesses, and investors through higher interest rates.

It isn’t the only factor making Fed rate hikes more likely. The war in Iran has disrupted energy supplies and driven up gas prices, helping push inflation to an annual pace of 3.5% in June, significantly above the Fed’s 2% goal.

This year’s inflation rebound has been largely about supply, wrote Richard de Chazal, macro analyst at William Blair, but demand is also playing a role. Consumer software and accessory prices surged at an annual pace of 17.4% in June, according to the Bureau of Labor Statistics. 

The prices that producers pay for semiconductors are up even more, de Chazal wrote, a worrying trend if they are becoming an input into everything, much like oil has for decades.

“To us, this still spells the need for higher rates—not dramatically higher, but high enough and for long enough to both bring down inflation and inflationary expectations,” he wrote.

Hot Fed Debate

The Federal Open Market Committee will likely debate AI-driven inflation at its July 28 meeting. Analysts expect the FOMC to keep rates flat this month, though markets are gearing up for at least one rate hike this year amid the energy shock from the war in Iran.

Higher energy prices are the main reason why Fed officials believe inflation risks are “tilted to the upside,” as the minutes of their last meeting showed. But most Fed officials think AI-related spending could “contribute to more persistent inflationary pressures,” the minutes said.

Some officials highlighted the potential for AI to make the economy more productive, pushing down prices as goods and services become more abundant. But they noted “this effect would likely take time to materialize,” the minutes said.

Dallas Fed President Lorie Logan, who’s been among the more hawkish FOMC officials, said on Thursday that AI “may eventually generate a surge in productivity.” But the size and timing of those effects aren’t clear, she cautioned, and the surge in AI investment is already having an impact.

“The demand effects are here already. And when demand outstrips supply, the result is higher prices,” Logan said, arguing for “modestly higher interest rates.”

The AI buildout “does not show signs of slowing,” Fed Governor Lisa Cook said Wednesday. There is an understandable worry that AI will displace workers, she said, but thus far the most dire fears “have not come to fruition.” And in the meantime, persistent inflation “imposes an unacceptable burden on American families,” Cook said. 

“If we do not see signs of disinflation soon, I am prepared to act,” Cook said, signaling she might support higher rates as well.

‘Good Family Fights’

The Fed’s new chair, Kevin Warsh, appears a bit less concerned about AI-driven inflation.

At a Senate hearing on Wednesday, Warsh said it’s one of the “good family fights” that the Fed will have under his tenure. AI investment will likely raise prices over the next year, but that inflationary boost may prove temporary, Warsh argued.

The effects on demand happen “much more quickly” than those on supply, he said. And unlike a foreign conflict—where the supply of key goods tends to be reduced—Warsh argued that AI could raise supply and thus the economy’s potential.

“I don’t view a one-time change in prices as necessarily being inflationary, because I think there’s a supply response,” Warsh said.

The Fed is attuned to the risk of AI’s disruption to the U.S. workforce, Warsh said, though he noted it also offers a “huge opportunity” over the longer term. 

“The United States is extremely well positioned to be at the cutting edge and extract more productivity—which should be good for U.S. companies and U.S. workers—than any other country in the world,” he said.

The precise effects, however, remain far from clear. Economists inside and outside the Fed have published countless papers exploring the trade-offs that AI poses to the global economy. 

For his part, Warsh announced a task force that will explore the impacts of AI on productivity and the job market. It will be co-led by Marc Andreessen, the venture capitalist and cofounder of Andreessen Horowitz; Charles I. Jones, a Stanford University economist who’s on leave at the AI firm Anthropic, and Asha Sharma, the CEO of Microsoft’s XBOX division.

Major stock indexes posted losses last week as technology stocks tumbled.
Credit: Michael M. Santiago / Getty Images

Stock futures are rising as investors prepare for a big week of earnings reports; oil prices bounced between gains and losses as investors track developments in the Middle East; Alphabet, Tesla and Intel are the among the headliners set to report earnings this week; SpaceX shares are rising after six straight days of declines; and gas prices are back above $4. Here’s what you need to know today.

Stock Futures Point Higher After Last Week’s Losses

Stock futures are pointing to a higher open to start the week as the market looks to rebound from last week’s losses. Futures tied to the tech-heavy Nasdaq were up 1.1% recently, while futures linked the the S&P 500 and the Dow Jones Industrial Average added 0.5% and 0.4%, respectively. The Nasdaq dropped nearly 3% last week as chip stocks tumbled amid concerns about the sustainability of AI-fueled gains, while the S&P 500 shed 1.6% and the Dow fell 0.9%. It was the first time since the week of June 5 that all three indexes lost ground. WTI crude oil futures were down 2% at around $81 per barrel after surging above $85 overnight as investors tracked developments in the Iran war. Gold futures were slightly higher at $4,030 an ounce, while bitcoin was holding steady at around $64,300.

Oil Prices Waver as Investors Track Iran War News

Oil trading was volatile overnight as fighting between the U.S. and Iran intensified. The U.S. struck Iran for the ninth consecutive day following news that a third U.S. service member had been killed. Iran responded with attacks on facilities in Bahrain and Kuwait, the Associated Press reported. The U.S. said its strikes are “degrading Iranian military capabilities used to attack commercial vessels and civilian mariners transiting the Strait of Hormuz.” WTI crude oil futures, the U.S. benchmark, rose as high as $85.30 per barrel overnight, their highest level in over a month, before dropping below $81 recently. The reversal came after a spokesman for Iran’s Foreign Ministry said negotiations between the U.S. and Iran were possible.

Big Tech Headlines Busy Week of Earnings Reports

Earnings reporting season will shift in to high gear this week, with investors focused on results from Big Tech companies after a rough stretch for AI stocks recently. Google parent Alphabet (GOOGL) and Elon Musk’s Tesla (TSLA) are scheduled to release their quarterly numbers after the closing bell on Wednesday, the first members of the Magnificent 7 to report this quarter. Chipmaker Intel (INTC), one of the top gainers in the S&P 500 over the past year, is scheduled to release its results on Thursday afternoon. Other noteworthy earnings reports set for this week include American Express (AXP), AT&T (T), Verizon (VZ), Comcast (CMCSA), ServiceNow (NOW), American Airlines (AAL) and General Motors (GM).

SpaceX Stock Rises After 6 Straight Days of Declines

Are shares of Elon Musk’s rocket, connectivity and AI company finally set for liftoff? SpaceX (SPCX) shares, which come into the week on a six-session losing streak, were up 1.6% in recent premarket trading. The stock has lost 19% of its value over the past six sessions and is down 45% from its record high above $225 set a few days after the company’s historic IPO. Wall Street analysts remain bullish on the company’s prospects, but ongoing tech sector volatility and the upcoming expiration of agreements that prohibit initial shareholders from selling could weigh on the stock. SpaceX shares were up more than 1% ahead of the opening bell.

Gas Prices Back Above $4

The recent surge in oil prices stemming from the increased fighting between the U.S. and Iran has pushed gas prices above $4 per gallon once again. The average price for regular gas crossed the barrier today for the first time since June 18, according to the data from AAA. Before the start of the war in late February, gas prices nationwide stood at just under $3, before surging above $4.50 in mid-May. The average price dropped as low as $3.79 earlier this month as the fighting eased but has risen once again amid the escalating tensions. California currently has the highest prices in the nation, at $5.50, while Indiana has the cheapest at $3.35.

Alphabet, the parent company of Google, is slated to report second-quarter results this week.
Credit: Beata Zawrzel / NurPhoto via Getty Images

Earnings season heats up this week, with Big Tech taking center stage.

Google and YouTube owner Alphabet is set to release its results weeks after announcing it was selling stock to finance the construction of AI data centers. The move divided investors: AI is spurring demand for Alphabet’s cloud business, but worries that building the technology could drag on profit as infrastructure depreciates have intensified.

Still, a number of developments have bolstered confidence in Alphabet, whose shares have roughly doubled in the past year. Consumers have embraced the company’s Gemini chatbot, though news reports saying that the Gemini 3.5 Pro model will be delayed weighed on investor sentiment late last week. Meanwhile, Alphabet has found a way to reduce how much memory AI uses, which could alleviate some of the pressures involved with acquiring components during a memory and data storage shortage.

Tesla’s results, like Alphabet’s, are due Wednesday. CEO Elon Musk has said he wants to shift the business beyond cars and into robots and AI. Tesla is tripling its capital expenditures as it leans into AI endeavors. Still, some believe Musk will eventually seek to merge Tesla and SpaceX, a space, communication and AI company he recently took public.

The Magnificent 7 members’ results come at a volatile time for the AI trade. SpaceX shares have dropped below their IPO price, and sharers of SK Hynix (SKHY)—the world’s largest supplier of high-bandwidth memory—plunged days after debuting on the Nasdaq. Given the jitters, investors will be looking for more clues as to what might come next when ServiceNow reports Wednesday and Intel reports Thursday.

Market Recap

The major stock indexes posted losses last week as shares of chipmakers fell sharply, while investors digested a flurry of earnings reports from major banks and several other noteworthy companies. The tech-heavy Nasdaq declined 2.9% last week, while the S&P 500 and Dow Jones Industrial Average shed 1.6% and 0.9%, respectively. Investors also kept close tabs on developments in the Middle East as fighting between the U.S. and Iran intensified, sending oil prices sharply higher and sparking concerns about potential economic consequences. (Read our coverage of Friday’s market action here.)

This Week’s Top Events

Here’s a rundown of top events this week. TradingView publishes a more detailed calendar, but clicking the link will take you off the Investopedia site.

• Tuesday, July 21: General Motors (GM) is set to release its second-quarter results at 6:30 a.m., and host a conference call at 8:30 a.m. ET. The automaker recently restructured its electric vehicle business in response to the expiration of a related tax credit.
• Tuesday: Capital One Financial (COF) is slated to publish its second-quarter results at 4:05 p.m. ET, followed by a conference call at 5 p.m. ET. The bank recently reached a $425 million settlement in a lawsuit over how it calculated interest rates on 360 Savings accounts. Capital One missed earnings expectations early this year.
• Tuesday: Alaska Air Group (ALK) is set to release its second-quarter results after the closing bell, followed by a conference call on Wednesday at 11:30 a.m. ET. Southwest Airlines (LUV) and American Airlines Group (AAL) also report this week and are scheduled to host conference calls on Thursday. Shares in air carriers dipped when Delta Air Lines (DAL) released results earlier this month. Although Delta performed better than expected, fuel expenses climbed. Customers haven’t been deterred by higher ticket prices, according to airline executives, and less capacity industrywide may bolster shares.
• Wednesday, July 22: AT&T (T) is scheduled to release its second-quarter results before the stock market opens and host a conference call at 8:30 a.m. ET. The telecommunications company topped expectations last quarter. Some of its competitors will also publish results this week, including T-Mobile (TMUS) and Verizon (VZ).
• Wednesday: Alphabet (GOOG, GOOGL) is set to release its second-quarter results, followed by a conference call at 4:30 p.m. ET. The company beat expectations last quarter.
• Wednesday: ServiceNow (NOW) plans to release its second-quarter results after the stock market closes, and host a conference call at 5 p.m. ET. The company’s shares dipped last week when IBM told investors that clients were cutting software spending.
• Wednesday: Tesla (TSLA) is slated to publish its second-quarter numbers after the closing bell, and hold a live question-and-answer webcast at 5:30 p.m. ET. Tesla’s second-quarter deliveries beat estimates.
• Wednesday: AMD (AMD) will host a two-day conference in San Francisco, where it’s expected to showcase its latest AI chips. Some analysts think new partnerships or customers could also be announced.
• Thursday, July 23: Albertsons Cos. (ACI) is set to release its fiscal first-quarter results before the opening bell, and host a conference call at 8:30 a.m. ET. Consumers have been stretched and focused on reducing their grocery bill for months, according to supermarket operators.
• Thursday: Comcast (CMCSA) is scheduled to hold a conference call on its second-quarter results at 8:30 a.m. ET, with the figures expected shortly beforehand. The internet and cell service company recently announced plans to spin off NBCUniversal.
• Thursday: Intel (INTC) plans to publish its second-quarter results after the closing bell, and host a conference call at 5 p.m. Strong results and a bright outlook sent shares flying last quarter. Investors have also been cheering the chipmaker’s recent deals, including with Google and Musk’s Terafab project.
• Friday, July 24: American Express (AXP) plans to share its second-quarter results at 7 a.m. ET, followed by a live audio webcast at 8:30 a.m. ET. Executives sometimes share viewpoints on the health of the economy and the consumer in their earnings commentary.

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Credit: wera Rodsawang / Getty Images

Key Takeaways

• People’s perceptions of the economy are near historic lows, while actual measures of living standards are higher than ever, baffling economists.
• Jason Furman, a Harvard economist and former advisor to former president Barack Obama, pins the phenomenon partly on “affective polarization,” or the tendency of people to hate the opposing political party more than they like their own.
• Affective polarization is especially intense in the U.S. and is linked to excessively negative feelings about the economy.

Almost any way you can measure it, American life is better than it was in 1970. Why it doesn’t feel that way is one of the biggest mysteries in economics.

In material terms, we have more of the stuff we want and much less of the stuff we don’t want compared to 56 years ago, according to an array of statistics compiled by Harvard economics professor Jason Furman. Bedrooms-per-person are up 61%, air conditioning is up 675%, typical wages are up 44% (yes, after taking inflation into account), college attainment is up 252%, and life expectancy is up 11%. Meanwhile, 97% fewer people go without plumbing, 61% fewer live in poverty, air pollution has fallen 73%.

Credit: Investopedia/ Jason Furman

Amid all those figures, there is one perplexing outlier: people feel much worse about the economy than they did in 1970, or just about any other time in records going back to the 1950s. The University of Michigan’s index of Consumer Sentiment reached its lowest point in history in May and remained near historic lows in July despite an uptick due to (temporarily) falling gasoline prices.

What This Means For The Economy

Nosediving consumer sentiment affects the political landscape more than the economic one. Although consumer sentiment has hit all-time lows, consumer spending has accelerated steadily.

From a historical perspective, it’s weird for public feelings about the economy to have so little relation to actual economic conditions. Before 2020, you could easily predict consumer sentiment by measuring the unemployment rate, the inflation rate, and stock prices.

That relationship broke when COVID-19 hit and has not moved back together since. The consumer sentiment index is a full 50 points lower than fundamental measurements of the economy suggest it should be, according to Furman’s research.

Credit: Jason Furman

Furman, who was the top economic advisor to former President Barack Obama, has been searching for a solution to the puzzle and shared his findings this week in a talk at the Federal Reserve Bank of St. Louis. And while he didn’t find a definitive answer, he did identify a major contributor: a phenomenon related to the growing divide between Democrats and Republicans, called “affective polarization.”

“It means that I am in my political party not because I like anything about my political party—I sort of don’t—but I really hate the other people,” Furman said. “And the amount of affective polarization is how much you define your identity more on disliking the other party than liking your own party.”

Researchers have long understood that people’s feelings about the economy are influenced by partisan sentiment. Furman took those findings a step further by measuring exactly how much that political rancor—affective polarization—has intensified in the U.S. in recent years and its link to consumer sentiment.

Furman, drawing on the work of Stanford polarization researcher Levi Boxell, found that affective polarization was worse in the U.S. than in comparable foreign countries, and that it seemed to be connected to the unusually negative feelings Americans have towards their economy, relative to their counterparts overseas.

Furman considered and dismissed most explanations related to actual economic conditions, such as high inflation, which has been far worse in the past than the recent surge. And the general dour feelings cut across all age groups and income levels.

If Furman’s research is correct about the rise of affective polarization, the relationship between inflation, unemployment, and politics may have been turned on its head. In the past, voters would punish political leaders at the polls if the economy took a turn for the worse on their watch. Now, however, people’s perceptions of the health of the economy seemingly flow more from their political leanings than the other way around.

“We’re in a new regime where there’s a complete disconnect between sentiment and economic conditions,” Furman said. “What’s going to happen this year, the next election, the election after that, is a little bit more of an open question.”

Shares of the Maker of Robotic Surgical Tools Led S&P 500 Decliners on Friday

Doctors in Darmstadt, Germany, performing an abdominal surgery using a da Vinci system.
Credit: Andreas Arnold / picture alliance / Getty Images

Key Takeaways

• Intuitive Surgical shares plunged amid investor disappointment that the company maintained its full-year growth forecast for procedures using its da Vinci surgical system.
• The lackluster guidance offset second-quarter results that topped Wall Street expectations.
• The stock, which hit its lowest level since early 2024, was the biggest decliner in the S&P 500 and Nasdaq 100 on Friday.

Intuitive Surgical (ISRG) shares plummeted Friday after the maker of robotic surgical tools failed to raise the outlook for its flagship product despite better-than-expected second-quarter results.

The stock fell 14%, trading at its lowest levels since early 2024 and leading decliners on both the S&P 500 and Nasdaq 100. With today’s decline, Intuitive shares have lost nearly 40% of their value since the start of the year.

Intuitive reported adjusted earnings of $2.80 per share on revenue that increased 19% year-over-year to $2.89 billion in the second quarter, handily topping Wall Street estimates.

But the Sunnyvale, Calif.-based company left unchanged its full-year projection for worldwide procedure growth using da Vinci surgical systems at roughly 13.5% to 15.5%, noting it “expects to be closer to the midpoint of this range.” That indicates that the company sees growth slowing, as the number of da Vinci procedures grew 15% last quarter after rising 17% in the first quarter.

“With a premium medtech valuation, Intuitive’s expectations remain elevated so a reiterated procedure guide didn’t quite pass the mark for a beat-and-raise,” analysts at William Blair said Friday in a note to clients. William Blair maintains an “outperform” rating on the stock, but noted several headwinds for the company including rising competition in China and declining procedure volumes owing to lower ACA enrollment.

The average price target of analysts who cover the company, according to Visible Alpha, is $509, which represents nearly 50% upside from Friday’s closing level.