Software names plunged, yet all three indexes rose as steady yields fed a rotation

Palo Alto Networks (PANW) -9.3% and Datadog (DDOG) -6.5% plunged, yet the S&P 500, Nasdaq and Dow all closed higher on the 2nd (local time). With Treasury yields flat across the curve, the VIX fell 7.0% to 15.20 in a session that saw risk appetite return.

• Dell (DELL) +15.8% led the gainers right after a guidance raise on surging AI server demand, with Nvidia (NVDA) +3.2% and Oracle (ORCL) +3.1% also near the top

• What held the index up, though, was materials (+1.7%), communication services (+1.4%) and financials (+0.8%) rather than information technology (-0.0%) — the one clear decline was rate-sensitive real estate (-0.7%)

• By contrast, Palantir (PLTR) -5.8% fell on news that Google is entering the defense AI market, putting that competitive picture in focus

• On top of that, July CPI +3.5% year over year and core PPI +4.2% leave inflation in a high band, and the Fear & Greed Index slid to 33 (Fear) in a week

Security and SaaS sold off across the board 📉

CrowdStrike (CRWD) -5.4%, Snowflake -4.4% and ServiceNow -4.3% all fell together

• Quarterly profit rose on AI security demand and the acquisition of AI platform Console was announced, yet Palo Alto Networks (PANW) still led the decliners

• Treasury yields held flat and the VIX steadied, leaving the macro backdrop calm — the software and security concentration was confined to the largest decliners

• Jobless claims and the trade balance on the 3rd, and the jobs report (NFP) on the 4th, are the next checkpoints

Apple's new CEO writes a first memo — the topic is the iPhone

From Cook to Ternus: an early signal of Apple's CEO transition

• In a first memo released on the 1st, CEO Ternus teased the next iPhone as a "phenomenal" launch

• The same day, Apple also disclosed the Ternus and Cook compensation packages as part of the CEO transition

• On the 2nd, Morgan Stanley published an analysis sizing the opportunity in an Apple foldable iPhone