U.S. markets enter Tuesday, August 4, 2026, with conditions set by the Monday, August 3 close.
August started with a broad market rebound. Oil fell. Yields eased. Investors returned to stocks. The Dow reached a record close. The S&P 500 moved near its record. The Nasdaq led gains. Small caps improved. AI stocks recovered. Inflation pressure eased.
The S&P 500 closed at 7,600.50.
The Nasdaq closed at 25,913.90.
The Dow closed at 53,178.41.
The Russell 2000 closed at 2,981.91.
The surface improved. The reason was simple: Oil moved lower. Lower energy prices reduced inflation concerns, helped Treasury yields fall, and gave investors more confidence to add risk.
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Equity Markets
Monday’s session showed broad strength.
The Nasdaq rose +2.1%.
The Russell 2000 rose +1.7%.
The S&P 500 rose +1.5%.
The Dow gained +1.3%.
That ranked the major indexes from strongest to weakest as:
Nasdaq, Russell 2000, S&P 500, Dow.
The Nasdaq gained 540.04 points.
The Russell 2000 gained 50.57 points.
The S&P 500 gained 110.78 points.
The Dow gained 693.38 points.
The strongest signal came from growth stocks. Investors returned to AI leaders after earnings restored confidence. The market had spent the prior week questioning whether AI spending could create enough profit.
Monday brought a better answer. The Nasdaq led the rebound. Technology recovered after recent pressure. The S&P 500 moved closer to its record. The index gained as investors became less worried about another oil-driven inflation spike. The Dow delivered the biggest headline. It closed at a record 53,178.41. That showed investors were buying more than just technology. Small caps improved.
The Russell 2000 gained 1.7% and moved closer to 3,000. That was important because smaller companies are more sensitive to rates and economic growth.
The market message: Investors returned. But they still want proof.
Fixed Income
Treasury yields moved lower.
The 2-year yield eased.
The 10-year yield moved lower.
The 30-year yield remained elevated.
Lower oil prices helped bonds. When energy prices fall, inflation pressure can ease. That gives investors more confidence that rates may not need to stay high for as long. The bond market remains the main risk. High long-term yields continue limiting expensive stock valuations.
The key question: Can yields keep falling while earnings stay strong?
That will decide whether this rally can continue.
Currency Markets
The dollar remained active. The U.S. Dollar Index moved higher. The yen strengthened. The euro remained under pressure. Currency markets continued reacting to rate expectations and Japan’s currency actions. A stronger yen reduced some recent pressure in global markets. The dollar remains one of the main signals to watch.
Commodities
Commodity markets focused on oil.
WTI crude moved near $80.
Brent crude moved near $84.
Spot gold traded near $4,054.
Oil was the biggest market driver. The decline in crude changed the inflation picture. Lower oil helped stocks. Lower oil helped bonds. Lower oil reduced fears of another inflation surge.
Gold remained supported by uncertainty. But lower inflation pressure reduced some urgency for defensive assets.
The commodity message: Oil relief helped the market.
Macro Backdrop
Tuesday begins with a better market setup. The biggest change was energy. Last week, oil pushed inflation fears higher. Monday reversed some of that pressure. Oil fell. Yields eased. Stocks rallied.
The market is now watching three things:
AI earnings.
Interest rates.
Inflation.
AI confidence improved after strong earnings. But investors still want proof that spending creates profits. Rates remain the biggest risk. Lower yields can extend the rally. Higher yields can slow it down. The market improved. The next challenge is proving this move has support beyond one day of relief.
Entering Today's Open
Key reference levels:
S&P 500: 7,600.50
Dow Jones: 53,178.41
Nasdaq: 25,913.90
Russell 2000: 2,981.91
10-Year Yield: lower
2-Year Yield: lower
30-Year Yield: elevated
U.S. Dollar Index: higher
WTI Crude: near $80
Brent Crude: near $84
Spot Gold: near $4,054
Markets enter Tuesday after a powerful rebound. The Dow reached a record close. The S&P 500 moved near a record. The Nasdaq surged. Small caps gained. AI stocks recovered. Oil prices fell. Treasury yields eased. Investors returned to risk.
The key takeaway: Monday showed what happens when inflation pressure falls. Oil dropped, yields eased, and investors returned to stocks. Earnings helped restore confidence in AI, but the next test is whether this rally can continue without lower rates and stronger proof that growth is lasting.

