Meta description: After a wild week that saw Microsoft surge 16% and the Kospi post a record 17.9% gain, here's the theme driving markets this week, the key catalysts to watch, and what history says about August.
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| <Source: Gemini> <Description: A photo of modern NAND flash memory chips mounted on a complex circuit board, highlighting global brands like Samsung, Toshiba, and Micron.> |
Last week may have been one of the most consequential stretches for AI-related stocks in all of 2026 — and this week is shaping up as the follow-through test. With Palantir, AMD, and SanDisk all reporting (covered in our companion previews) alongside a fresh nonfarm payrolls report on Friday, here's the theme tying markets together this week and what's worth watching.
The lesson from last week, in one sentence
Microsoft and Amazon stock prices rose 16% and 10% respectively last week, while Meta, Apple, and South Korea's Kospi fell 10%, 4%, and — in an even more extreme single-day move — 17.9% at their respective worst points, before the Kospi staged its own record rebound. What those numbers show is straightforward: demand for AI is real, but capital spending without clear evidence of that demand converting into growth gets punished, and quickly. This week is effectively a follow-through test of whether that same standard holds for a new batch of companies.
The week's calendar at a glance
- Monday: ISM Manufacturing data, plus earnings from Palantir, ON Semiconductor, Diamondback Energy, and Marriott
- Tuesday: JOLTS job openings, AMD's closely watched production update, plus Caterpillar and other industrial earnings
- Wednesday: SanDisk's first pure-play NAND earnings report since its 53% decline from highs, alongside a broad slate of consumer and healthcare names
- Thursday-Friday: Continued earnings flow, including Disney, McDonald's, Kraft Heinz, and Costco, culminating in Friday's July nonfarm payrolls report
Why the jobs report matters more than usual this time
Friday's nonfarm payrolls release lands at a particularly sensitive moment for markets. As covered in our recent post on 30-year Treasury yields hitting their highest level since 2007, bond markets have been signaling real concern about inflation even as stocks rallied on strong earnings. A jobs report that comes in unexpectedly hot could reinforce those inflation worries and pressure yields further; a softer print could offer some relief. Either way, Friday's data is likely to meaningfully influence how markets interpret the Fed's next moves heading into September.
The bullish case still standing behind the volatility
Despite last week's turbulence, the underlying earnings picture remains genuinely strong. Of the roughly 300 S&P 500 companies that had reported by late July, 85% beat expectations, according to FactSet data, with aggregate corporate profits tracking toward more than 47% growth. That backdrop has kept some strategists constructive: RBC Capital Markets' Lori Calvasina has reiterated an 8,150 S&P 500 price target, arguing that recent choppiness has actually opened up opportunities rather than signaling a deeper problem.
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| <Source: Gemini> <Description: A dynamic illustration showing a confident financial strategist pointing towards strong growth data, resilient earnings, and a 8,150 price target for the S&P 500, symbolizing opportunities in a turbulent market.> |
The seasonal headwind worth knowing about
It's worth balancing that optimism with a well-known seasonal pattern: August and September have historically been among the weaker months for stocks. Combined with a fast-approaching midterm election cycle and an interest-rate outlook that remains genuinely uncertain given last week's bond market moves, the path forward is unlikely to be a straight line even if the underlying earnings trend stays constructive.
What to watch this week
- Palantir, AMD, and SanDisk's earnings reactions (covered in our individual previews), as fresh tests of the "prove the demand" standard set last week
- Friday's nonfarm payrolls report, and how it interacts with already-elevated bond yields
- Whether CXMT's explosive Shanghai debut (covered in our companion post) continues reshaping sentiment around the global memory chip competitive landscape
- Whether the broader 85% earnings beat rate holds as more companies report through the rest of the week
Bottom line
This week extends the defining question of the current earnings season: which companies can show that their AI-related spending and growth stories hold up under real scrutiny, and which get punished for falling short. With a jobs report, several high-multiple earnings tests, and a historically tricky seasonal stretch all converging, the path through August looks unlikely to be smooth — but the underlying earnings backdrop still gives bulls a genuine case to lean on.
This post is based on reporting from TradingKey and CNBC as of July 31 - August 1, 2026. This content is for informational purposes only and does not constitute investment advice.
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