Morning Wrap: ASX 200 futures flat, Dow surges to all-time highs, Nasdaq rallies on big tech gains

In a nutshell:

• Major US benchmarks all pushed higher after cooling tensions in the Middle East

• S&P 500 (+1.48%) closed within 0.1% of all-time highs, Nasdaq (+2.13%) rallied on broad gains across Mag-7 and semis, while the Dow (+1.32%) closed at record levels

• Brent Crude slid nearly 8% to US$83.76 after President Trump called off what he described as the biggest planned attack on Iran since World War II

• Amazon became the newest US$3 trillion company on strong cloud growth and Palantir raised its full-year guidance again after the bell

Let's dive in.

• Major US benchmarks higher and finished near session best levels, gapping up at the open and trending higher for most of the day

• S&P 500 within 0.1% of all-time highs, Nasdaq still 4.5% away from its 2-Jun record, while the Dow closed at record levels 

• US 10-year yield eased to 4.70%, retreating from an 18-month high, as investors positioned for Friday's July payrolls report after last week's divided Fed hold 

• European equities closed at records, Euro STOXX 50 up 1.2% to 6,440 and STOXX Europe 600 up 0.4% to 652, as falling energy prices dragged sovereign yields and credit costs lower 

• Deutsche Bank says megacap tech's contribution to index earnings growth has fallen to 57% from 90% a year ago, with all 11 sectors on track for positive growth (INV)

• Goldman Sachs added Microsoft, Applied Materials, Delta Air Lines, O'Reilly, Viking Holdings and UPS to its US Conviction List, removing Broadcom, ServiceNow, Johnson & Johnson and Dick's (YF)

• Morgan Stanley upgraded South Korean equities to Overweight, calling July's record 22.2% drawdown a technical leverage unwind and setting a 9,000 KOSPI target, favouring industrials, defence and financials (TK)

• Amazon became the fifth company ever to cross a US$3 trillion market cap, closing at a record after AWS revenue of $42.2 billion beat ests of $40.54 billion (CNBC)

• Bond investors warn of deeper Treasury rout as Fed Chair Warsh's ambiguity erodes credibility (BBG)

• Yen surges on speculation of fresh Japan-US coordinated intervention (BBG)

• Palantir Q2 FY26 revenue up 93% year-on-year to $1.94bn, US commercial up 149% to $764m, EPS $0.41 beat ests by about 24%, FY26 guidance raised to $8.15bn from $7.65bn, shares up ~12% after hours (INV)

• AstraZeneca fell as much as 7% in London, the second-biggest FTSE 100 decline, after the FT reported merger talks with Bristol Myers Squibb on a combination worth close to $400bn (CNBC)

• Jefferies said it was "a bit perplexed" by the AstraZeneca approach and Citi called it a surprise given the group's best-in-class pipeline, with the combined oncology book likely to draw antitrust scrutiny (CNBC)

• Snap Q2 FY26 revenue $1.6bn with a loss of 10 cps vs. ests of 12 cps, Q3 revenue guided to $1.7bn to $1.74bn on stabilising ad demand, shares up ~7.5% after hours (INV)

• ON Semiconductor Q2 FY26 revenue $1.6bn and EPS $0.74 ahead of ests, Q3 revenue guided up to $1.75bn and EPS $0.81 to $0.93, signalling industrial and auto power demand is bottoming, shares up ~4.5% after hours (INV)

• Alibaba launches largest AI model Qwen3.8-Max, claiming parity with Anthropic's top system (BBG)

• Trump said he called off what would have been the biggest attack since World War II on Iran after Saudi Arabia, the UAE and Qatar urged restraint and Tehran asked very strongly to hold off (CBS)

• Trump said the offer of talks is Iran's last chance and that a deal on Hormuz and ultimately Iranian denuclearisation is imminent (BBG)

• Iranian foreign ministry spokesman said Tehran is not negotiating with the United States at this time and that talks are with Oman on a safe shipping route only (WP)

• Bloomberg reported the so-called middle passage through Hormuz has been mined by Iran and would need clearing before vessels could use it regularly (BBG)

• Trump posted on Truth Social that a deal would include the immediate, complete and total opening of the Hormuz Strait and an end to Iran's nuclear threat (CBS)

• Trump again demands US oil majors lower retail gasoline prices for US consumers (RT)

• ECB says Eurozone household consumption fell sharply after Iran war outbreak as confidence tumbled (RT)

• China's PBOC pledges timely policy tweaks and support for panda bond issuance (RT)

• Japan's finance ministry confirmed it conducted a coordinated yen-buying intervention with the US Treasury on Friday, the first joint US-Japan operation since 1998, and said it will not hesitate to act again (CNBC)

• Bank of Japan accounts point to roughly Y5.33tn, or about $34bn, of intervention on Friday alone, a record monthly total for a single round of operations (BBG)

• Fed chair Kevin Warsh floated six rate-setting meetings a year plus two focused on broader economic issues, down from the eight-meeting schedule in place since 1981 (AX) 

• US ISM manufacturing PMI jumped to 55.6 in July from 53.3, the highest since May 2022, against ests of 54.0, as factory activity expanded for a seventh straight month (CNBC) 

• Eurozone manufacturing PMI hits nearly 4.5-year high in July, but growth driven by backlog clearance rather than new demand (RT)

• China's RatingDog manufacturing PMI eased to a four-month low of 50.9 in July from 51.7, missing ests of 51.5, though it marked an eighth straight month of expansion (RT)

• Australian home prices fall at fastest pace since 2022 as rates and tax changes hit demand (BBG)

• S&P Global said global PMI data pointed to a sustained manufacturing growth spurt in July but with momentum slowing on high prices, uncertainty and reduced stock building (SPG) 

• 1H26 results from Credit Corp (CCP) and Pinnacle Investment Management (PNI)

• Healius confident of achieving $150m for its BioLabs unit with indicative bids from six or seven parties, though sources say $200m remains a stretch and a deal is unlikely before FY results on 19-Aug. Unclear whether EQT or Blackstone bid (The Aus)

• Qantas in advanced discussions with Accenture to outsource up to 1,000 marketing, finance, HR and back-office roles to India under Project iQ, with a decision expected this year. Qantas says talks are early stage with no agreement or decision made (AFR)

• A broadening rally: A classic tech-led rally on Wall Street, but plenty of ex-tech standouts. Discretionary (+2.6%) was the second best performing S&P 500 sector, the US Global Jets ETF (+4.4%) rallied on falling oil prices, iShares Expanded Software-Tech ETF (+3.0%) now up for a sixth straight session (Nasdaq-listed Life360 and Block shares up 4.1% and 1.0% respectively), commodity prices a little dicey overnight but rising risk appetite and recent US dollar decline still buoyed mining stocks, with Uranium (+4.4%), Gold (+2.6%) and Rare Earths/Strategic Metals (+2.5%) leading.

• FDC Consolidated Holdings initiated Buy with $4.15 target (UBS)

• Lottery Corp downgraded to Neutral from Overweight; target cut to $5.40 from $5.70 (JPMorgan)

Stocks trading ex-dividend: 

• Tue 4 Aug: Australian Foundation Investment Company (AFI) – $0.17, Clearview Wealth (CVW) – $0.05

• Wed 5 Aug: Djerriwarrh Investments (DJW) – $0.043

• Thu 6 Aug: None

• Fri 7 Aug: Amcil (AMH) – $0.03

Other ASX corporate actions today:       

• Dividends paid: Arena REIT (AFR)

• Earnings: Centuria Office REIT (COF), Charter Hall Social Infrastructure REIT (CQE), Credit Corp Group (CCP), Pinnacle Investment Management Group (PNI)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.