(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

August 5 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

For all the doubts and handwringing, the S&P 500 and Dow Jones

are back at record highs after surging on Tuesday amid falling

oil prices and the bumper earnings season.

It wasn't all plain sailing overnight, however, as SpaceX shares

fell back despite beating revenue expectations in its debut

quarterly earnings report.

I'll get into that and more below.

But first, check out my mid-week column, where I discuss the

prospect of an AI "jobsmageddon" and more.

And listen to the latest episode of the Morning Bid daily

podcast, where we discuss yesterday's standout earnings reports.

Subscribe to hear Reuters journalists discuss the biggest news

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OUTER SPACEX

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.

Chart of the day

Chipmaker AMD's stock fell back 7% ahead of Thursday's bell

despite a beat in quarterly revenue forecasts overnight, as

sky-high valuations mean the bar to impress Wall Street is just

as high.

The stock has risen some 140% so far this year as the AI frenzy

has catapulted chip stocks higher across the globe. AMD's $850

billion market capitalization means its

price-to-forward-earnings valuation is now an eye-watering 43

times - far higher than the 25 times for the U.S. chip sector

overall and more than twice Nvidia's multiple.

Today's events to watch

* U.S. July ADP payrolls (8:15 a.m. EDT), ISM

non-manufacturing PMI for July (10 a.m. EDT)

* U.S. corporate earnings: Eli Lilly, Sandisk, Western

Digital, Disney, Uber

* Fed Governor Lisa Cook and San Francisco Fed President

Mary Daly speak

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Opinions expressed are those of the author. They do not reflect

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committed to integrity, independence, and freedom from bias.