The market reaction to SpaceX's debut earnings release was rocky despite its strong top-line figures. Doubts about its rising AI capex and cash burn dominated the discussion, alongside lingering concern about whether sales of insider and early-investor shares could pressure the stock as the post-IPO lockup periods expire.

Chipmaker AMD also slipped overnight after its own forecast-beating update.

Earlier in the day, however, Palantir saw its shares boom nearly 30% after its impressive quarterly results, while Dow stalwart Caterpillar also jumped on its earnings. Overall, the reporting season has been extraordinary in its strength, and the index gains appear to have held overnight.

Yesterday's strong performance on Wall Street may be thanks, in part, to Brent crude, which dropped another 5% to below $80 per barrel yesterday. However, prices edged back up above that level on Wednesday after Yemen's Iran-aligned Houthi rebels said they attacked a Saudi oil tanker in the Red Sea.

More broadly, Washington officials have indicated that mediation between the U.S. and Iran on reopening the Strait of Hormuz could bear fruit this week.

While Tehran has denied direct talks with the U.S. are happening, it said talks with Oman over transit through the strait were continuing, while Qatari officials said go-betweens were making progress in efforts to end the war. Traffic through the strait is also currently busier than it has been for many weeks.

Elsewhere, the oil price drop has taken the heat out of Treasury yields, even though Kansas City Fed chief Jeffrey Schmid said on Tuesday that the central bank would need to tighten policy to get inflation back to its 2% target.

As the week's big labor market reports have started to emerge, we've learned that June job openings fell but hiring rose. Private sector payrolls for July are next on the schedule today.

Meanwhile, the bond market will need to consider the latest quarterly refunding details, due out later today, to see how higher borrowing totals are being spread out along the yield curve.

The U.S. fiscal situation has recently taken a fresh blow. There were reports on Tuesday that the U.S. government has already paid out as much as $100 billion in tariff rebates after the Supreme Court struck down many of the duties earlier in the year.

In currency markets, Treasury Secretary Scott Bessent said he would do "whatever it takes" to support Japan in its defence of the yen and urged the Fed to upsize the repo facility used in the joint-intervention bout last week. The yen appears to have stabilised at stronger levels for now.

With that, onto today's column.