Here is Schwab's early look at the markets for Wednesday, August 5:

Investors arrive at mid-week digesting a full-fledged Wall Street rally to record highs thanks to growing hopes for Middle East progress and continued earnings power. More results come this afternoon as two large memory chip firms report, and the countdown is on to Friday's July nonfarm payrolls report.

Advanced Micro Devices and SpaceX made Tuesday afternoon busy. An insider lock-up expiration this Thursday that launches more SpaceX shares into the market is the next challenge for Elon Musk's company and helps explain why the stock entered Tuesday down sharply from its initial public offering, or IPO, price.

SpaceX shares, which rose 9% into earnings Tuesday, didn't get much benefit in post-market trading from narrower-than-expected quarterly losses and better-than-expected revenue. Initially, the stock fell about 6%. Launch revenue drove quarterly gains, but AI revenue rose sharply from the prior quarter.

Advanced Micro Devices also failed to impress investors initially with earnings that slightly surpassed consensus and revenue that jumped 50% year over year to $11.54 billion, also slightly above consensus. Its guidance for third-quarter revenue also just managed to top the consensus view. Though all the numbers looked solid, it's possible there were "whisper numbers" on Wall Street that led investors to expect an even better outing, and shares had risen about 7% on Tuesday.

On most days, earnings from a $1 trillion U.S. company might top the news, but today Eli Lilly may get second billing thanks to AMD and SpaceX. Lilly, which reports this morning, is expected to show earnings per share of $6.01, down about 4.8% from a year ago despite what's expected to be revenue growth of 33.2% to $20.7 billion. Shares have hit a roadblock since June and recently dropped below the 50-day moving average as the health care sector continues to slump.

After the close, investors await earnings from memory chip makers Sandisk and Western Digital. One question is how long they think the industry-wide memory shortage might last. It's driven up prices, hurting companies like Apple that rely heavily on these products.

In data Tuesday, the June Job Openings and Labor Turnover Survey (JOLTS) report showed 7.35 million jobs open, compared with expectations of around 7.45 million, and 7.59 million in May. Monthly quits, which can provide insight into competition for new employees, rose slightly to 3.23 million. Back in May, just over 3 million people left their old jobs seeking greener pastures. The report basically met expectations and didn't seem to have much market impact.

The July ADP monthly jobs report is due before today's open, tracking private sector employment. Consensus is 70,000 new jobs, down from 98,000 in June but still a relatively solid showing. The ADP report doesn't tend to correlate closely with the government's data.

Jobs data crescendos with Friday's 8:30 a.m. ET July payrolls report. Analysts expect 86,000 jobs created, up from 57,000 in June. Though light historically, such a figure would likely get a positive view from a macroeconomic perspective, especially combined with record-low initial jobless claims in recent weeks.

Potential tightness in the services sector could spark wage growth, something to monitor in Friday's payrolls report. Any sign of labor market tightness could exacerbate the market's focus on the Fed's inflation-fighting credibility, noted Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR).

In Tuesday's action on Wall Street, indexes rocketed to new all-time highs, fueled by hopes for progress on the Iran front. Treasury Secretary Scott Bessent said the Strait of Hormuz could open to more traffic within the next day or two, and Qatar reported progress toward a deal resume negotiations between the U.S. and Iran, Bloomberg reported. Crude oil continued falling and Treasury yields eased, though both remain elevated from earlier this year.

The Treasury yield story is multi-pronged. While recent yield gains likely reflect growing inflation caused by the war, they also might reflect strong numbers in the underlying economy that could benefit stocks. Though gross domestic product growth of 1.5% in the second quarter disappointed, jobs and retail sales growth have been solid recently.

The Atlanta Fed's GDPNow indicator, which admittedly only takes into account data as they come in, is at 6.2% for third quarter GDP growth with a long way to go before anything is certain. Analysts are generally more around 2%.

Only six of 11 S&P 500 sectors ended higher Tuesday despite the nearly 2% rally for the index, led by 4% gains in tech and a nearly 2% jump for industrials. For the second day in a row, defensive sectors brought up the rear, suggesting bullish sentiment.

From a technical perspective, the S&P 500's drop below its 50-day moving average last week followed by this week's solid breakout above the moving average is likely constructive and could be driving some short covering that adds to the rally. The index had been hugging the 50-day line for most of June and July and is now higher above it than it had been since early June.

This comes amid healthy breadth with nearly 68% of S&P 500 stocks trading above their respective 50-day moving averages, up from around 50% in early June when the market last peaked. This is a sign that a broader slice of the market is moving higher, not just the chip stocks that propelled the market back in May.

Checking individual market movers Tuesday, Palantir surged almost 30% after reporting results late Monday that beat consensus and guiding for better-than-expected third-quarter revenues. It also raised its fiscal 2026 revenue estimate above the average Wall Street estimate and adjusted free cash flow guidance upward, citing growing AI demand.

The chip and AI sector fueled much of the acceleration yesterday and that showed up in double-digit gains for Arm Holdings, Marvell Technology, Sandisk, Intel, and Super Micro Computer.

Novo-Nordisk plunged 6% after quarterly sales of its Wegovy weight loss drug fell short of expectations.

Chipotle slid nearly 10% on media reports that the company has removed certain jalapeńos from stores linked to salmonella cases in Minnesota.

McDonald's climbed just 1% despite an earnings per share beat, with revenues meeting estimates. Though global comparable sales at stores open a year or more rose 1.3% annually, U.S. comparable sales climbed just 0.8%, slowing from 3.9% in the first quarter.

Caterpillar climbed 6%. Earnings per share nearly doubled from a year ago and exceeded estimates by $2. Sales of $20.5 billion topped the average analyst estimate of $19 billion, lifted by the power and energy unit that reflects growing AI demand..

Snap jumped 14% after earnings and guidance topped estimates. In a statement, the company cited improving advertising momentum.

Nike fell 2.6% after getting downgraded to underweight from neutral by JPMorgan Chase, which cited headwinds out of China potentially hurting the company's business.

Whirlpool spun up 13.8% gains despite earnings and revenue both missing analysts' quarterly estimates. What ultimately appeared to help was the company's above-consensus fiscal 2026 EPS guidance and some signs of sequential improvement, Briefing.com noted.

Wayfair soared 29% as earnings and guidance impressed. It expects high-single digit third quarter revenue growth. Analysts had expected 4.8% annually.

The Dow Jones Industrial Average® ($DJI) soared 907.47 points (+1.71%) Tuesday to 54,085.88; the S&P 500 Index ($SPX) jumped 136.02 points (+1.79%) to 7,736.52, and the Nasdaq Composite® ($COMP) added 671.10 points (+2.59%) to 26,584.99.