Stocks closed higher yesterday, led by the small-cap Russell 2000 with 1.53%, followed by the tech-heavy Nasdaq with 1.29%.

Semiconductor and memory-chip stocks surged yesterday, helping to lift the Nasdaq.

And surging biotech and pharma stocks helped lift the Russell.

But gains were widespread. And better-than-expected earnings definitely helped.

While only about 13% of the S&P has reported earnings so far (earnings season has really just gotten started), roughly 88% of those have posted positive EPS surprises.

That includes General Motors yesterday morning, which posted a positive EPS surprise of 14.06%, and a positive sales surprise 3.15%. That translated to a quarterly EPS growth rate of 41.1% vs. this time last year, and a sales growth of 1.9%. They were up 4.91% yesterday.

3M also reported before the open yesterday and posted a positive EPS surprise of 5.73%, and a positive sales surprise of 1.65%. That equated to a quarterly EPS growth rate of 11%, and a sales growth of 2.4%. They also upped their full-year EPS guidance by 3.2% above previous estimates. If met, that would be a 10.1% EPS growth rate. They were up 7.32% yesterday.

After the close, it was reported that Super Micro Computer would see higher margins (adjusted gross), with midpoint forecasts coming in at 16% vs. the previous 8.3% outlook. A surge in new orders was cited as a big part of that gain. And AI demand can be thanked for that (which includes big orders from SpaceX, which owns xAI). They were up 7.01% in the regular session. And jumped more than 20% in after-hours following the news.

Today we'll hear from another 148 companies on deck to report, including 2 Magnificent 7 stocks ? Alphabet and Tesla, after the close, along with widely held Texas Instruments, IBM and ServiceNow to name a handful. But in the morning we?ll hear from Philip Morris, AT&T and Moody's.

Not much in the way of economic reports out yesterday. But today we'll get MBA Mortgage Applications, the Atlanta Fed Business Inflation Expectations, and the EIA Petroleum Status Report.

In international news, Japan reported that exports in June rose 19.3%, beating expectations for 18.6%. It was their best pace since November 2022. Imports also surged, gaining 25.4%, the fastest pace since Nov '22. The Bank of Japan also noted that an increase in AI demand has lifted Japan's outlook.

As I've been saying, despite recent tech volatility, the AI trade in alive and well. And it looks like there's a lot more upside to go. After all, this is only the most transformational technological breakthrough ever!

The market will also keep its eyes on the Middle East.

But gladly, it's earnings season. And stocks typically go up during earnings season.

If the focus can stay on that, and it continues to come in as spectacularly as it started, we could be looking at another stellar earnings season and price action.

See you tomorrow,