The Market Brief

US stocks rallied and bond yields fell after a weaker than expected July jobs report, with prior months revised down too, fueling bets the Federal Reserve won’t need to raise rates soon.

A cooling in U.S.-Iran tensions added to the tailwind, as falling oil prices eased some inflation concerns ahead of Wednesday’s CPI report. The technology-led rally that has pushed stocks to record highs now faces its next test: if inflation data surprises to the upside, it could revive the case for the Fed to hike rates rather than hold.

Corporate America keeps clearing a bar that keeps rising. Nearly two-thirds of S&P 500 companies are now beating earnings estimates by more than a standard deviation, the highest beat rate since 2021.

Since 2021, the frequency of large positive surprises has climbed from a 49% historical average to 64%, while big misses have fallen to just 8%, well below the 13% norm. Q2 2026 is reinforcing that trend: headline S&P 500 EPS growth is running at 45% year over year, but strip out the “other income” from mega-cap tech’s appreciating equity stakes and growth cools to a still-strong 26%. Even within that figure, AI infrastructure names account for roughly a third of the index’s EPS growth, a reminder of how concentrated the strength is. The median company, by contrast, is growing EPS 12%, three points ahead of the 9% consensus heading into the season.

The bar clearing looks impressive on the surface, but a meaningful chunk of the headline number is optics, not operations, and even the “clean” growth is leaning heavily on one corner of the market. Real conviction sits closer to that 12% median than the 45% headline, so the earnings story is strong, just narrower than the top-line print makes it look.

In todays brief we break down what dealer gamma positioning is signaling for market stability right now, and the pivot point that could flip the script. We unpack why this backdrop matters for how you read the next move in volatility.