Market brief — July 31, 2026

Yesterday, markets closed with a broad risk-on rebound in the proprietary tape: the CAC 40 finished at 8,485.64 (+0.92%), the S&P 500 at 7,437.63 (+1.66%), the Nasdaq at 25,122.18 (+2.78%), the DAX at 25,612.03 (+0.6%), and the Euro Stoxx 50 at 6,344.4 (+1.53%). That recovery looks less like a fresh macro impulse and more like a relief rally after the prior session’s rates-led de-risking, helped by a softer inflation read in the U.S. and a still-benign equity bid in Europe; the dominant regime remains a higher-rates, multiple-sensitive market, but yesterday’s price action suggests traders were willing to buy duration-sensitive equities once the immediate inflation pressure eased.^[6][7]

The main cross-asset question is whether the move can extend without a further decline in real yields and without a renewed dollar bid. The U.S. PCE data showed the Fed’s preferred inflation gauge cooling in June, with the annual rate easing to 3.7% from 4.1%, while Spain’s July flash CPI came in at 3.5%, reinforcing that inflation is not collapsing but is no longer accelerating in the same way that had been pressuring long-duration assets.^[6][7] That combination supports a softer rates regime near term, which is why Nasdaq outperformance was so strong relative to the DAX and CAC. The implication is that systematic de-risking may have paused, but discretionary buyers are still trading defensively: if Treasury yields stabilize, the market can keep rotating into crowded quality growth; if yields re-accelerate, that rally should fade quickly. The key divergence is that equities rose even though the policy backdrop is still restrictive, which means the tape is now very sensitive to any repricing in front-end rate expectations.^[6][1]

The Cash Scanner reinforces that this is not a one-theme rally but a selective rotation into technical breakouts across defensives, energy, and event-driven names. P G & E Corp (PCG) scored 42 with a 0.4% gap, strong ADX 35 and rising volume; Bristol-Myers Squibb (BMY) scored 38 with a 2.8% move and ADX 33; and IntercontinentalExchange Group (ICE) scored 36 with a 1.3% gap and ADX 32. At the same time, PBF Energy (PBF) jumped 15.4% on a breakout with MACD upside, while Xerox Holdings (XRX) exploded 32.2% on a breakout and volume spike. The mix says leadership is broadening beyond mega-cap growth: there is still momentum in U.S. technology, but the scanner is also picking up utilities, health care, insurance, and energy, which is consistent with a market that is buying technical confirmation rather than clean macro beta.^[1]

Over the next one to five sessions, the dominant narrative is likely to be “lower-than-feared inflation lets the market reprice the path, but not enough to declare victory.” Consensus will treat the June PCE cooling as supportive for risk assets and for long-duration equities, yet a lot of that relief is already reflected in the Nasdaq’s sharp bounce. What remains uncertain is whether yields can stay contained into month-end positioning and upcoming labor data. A credible contrarian scenario is that the inflation cooling proves temporary and rate-cut hopes get pushed back again, which would hit the same crowded growth leadership that led yesterday’s rebound.^[6]

The most important catalysts are the next U.S. labor-market releases, which can either validate the softer-rate narrative or force a repricing higher in front-end yields; the next Treasury supply/auction sequence, which can test demand for duration; and any follow-through in euro-area inflation prints that could affect ECB expectations and the euro-sensitive industrial complex.^[7] If yields continue lower, the scanner names with breakout-plus-volume profiles such as PBF Energy, Xerox Holdings, and Baxter International (BAX) should keep attracting systematic follow-through; if yields back up, the market will likely retreat first in the Nasdaq and then in the more fragile breakouts. The main risks are a renewed bond selloff into month-end liquidity, a stronger dollar that tightens global financial conditions, and any earnings or guidance disappointment that interrupts the current technical repair.^[1][6]

A practical read: if the S&P 500 holds yesterday’s rebound while the Nasdaq keeps outperforming and Treasury yields stay contained, the current risk-on leg can extend, with ICE, PCG, and BMY offering cleaner relative-strength confirmation than the more extended momentum names. If the 10-year yield turns back up and the dollar firms, expect the bounce to narrow fast and for high-beta breakouts like XRX and PBF to become more volatile rather than more durable. If inflation-sensitive data surprise hotter than expected, the market’s tolerance for multiple expansion should be tested first in the Nasdaq and then in the broader U.S. growth complex.^[1][6][7]

Bonne journée aux p&l makers.