0806 | S&P 500 Hits Record High; Software Stocks Diverge, AppLovin and UWM Sink

Mia: Welcome back to After Market. I'm Mia, and alongside me is my co-host Milo. It's a busy tape tonight, so let's get right into it.

Milo: Thanks, Mia. We've got a rally that carried the S&P 500 to record highs, a big split in software stocks, a couple of sharp earnings-driven drops, and some movement in energy and commodities.

Mia: Let's start with the big picture. After Wednesday's close, the S&P 500 was sitting at record highs, capping a four-day rally of more than five percent. And the notable detail here is how traders are positioning for more.

Milo: Right. Bloomberg is reporting that Wall Street bulls are flocking to call options on the S&P 500 as the rally broadens. That's striking because for months, the index has been living in the shadow of its more volatile rival, the Nasdaq 100.

Mia: So the option darling is now the broad market, and sentiment behind it is running hot. Separately, traders on the prediction platform Kalshi now see it as likely that the S&P 500 will hit eight thousand sometime in 2026. Those odds reportedly rose after the index's record-setting rally.

Milo: To be clear, that Kalshi number is a positioning and odds signal, not a market forecast. Still, the question going forward is whether S&P 500 call demand keeps up next session, whether those odds hold, and whether the index's breadth keeps broadening relative to the Nasdaq 100.

Mia: Sticking with markets, software stocks put on a real contrast act today. SoundHound AI rallied twelve percent, and Unity Software rose eleven percent, while Datadog sank fifteen percent, as traders sorted the winners from the losers.

Milo: It's a tale of two tapes. On one side you had SoundHound and Unity catching bids, and on the other, a broad slide in software names, with Figma and Datadog leading the declines. The selloff came as earnings reports from Datadog and HubSpot raised questions about artificial intelligence pricing.

Mia: So the AI story is splitting the sector. Some names got rewarded for their positioning, while others saw AI pricing questions hit their shares. That's a clear reminder that a rising tide in tech isn't lifting every boat equally.

Mia: Let's look at a stock that got hit hard on earnings. AppLovin shares fell seventeen percent in Thursday's session after its second-quarter results missed analysts' expectations for revenue.

Milo: So this is a direct repricing around an earnings event, keyed to a top-line shortfall. The direction and the magnitude of the drop are confirmed, and the catalyst is characterized as a revenue miss. But we don't have specific revenue or profit figures, guidance, segment detail, or any management commentary.

Mia: Which leaves real uncertainty about how big the shortfall actually was, and whether the seventeen percent drop reflects just the revenue miss or other elements of the report we haven't seen. Worth watching for is any company statement or analyst coverage quantifying the miss, plus forward guidance and whether follow-on trading extends or reverses the decline.

Milo: And to be precise, that seventeen percent is strictly the reported Thursday session move. It's not a projection of further downside.

Mia: Another sharp move came from the mortgage lender United Wholesale Mortgage. The stock plunged roughly forty percent after the company suspended its dividend and raised capital.

Milo: CEO Mat Ishbia framed it as a deliberate step, saying, quote, "We're taking decisive action to make UWM stronger, more liquid and better positioned to win for years to come."

Mia: So this is a company-driven catalyst, a dividend suspension plus a capital raise, rather than an external earnings miss or a macro data point. What we don't know is the size, structure, or terms of that capital raise, or the prior dividend rate, so the full balance-sheet impact and the shareholder dilution are unspecified.

Milo: Right. The key uncertainties are the terms of the new capital, how much dilution occurs, and what the dividend suspension implies for near-term cash returns. Further company disclosures on the raise structure, the use of proceeds, and any updated liquidity or earnings outlook would fill in a lot of that gap.

Mia: Shifting to commodities, oil prices rose on Thursday as the market waited on the details of a proposed agreement between Iran and Oman on shipping lanes, one that would partially reopen the Strait of Hormuz.

Milo: Bloomberg reports Iran says the agreement is in its final stages, and in recent days both the U.S. and the Islamic Republic have indicated a resolution is close. But here's the wrinkle: the U.S. appeared to reject the terms of an Iranian draft plan that would open the Strait to ships except those from the U.S. and Israel, with Washington rejecting any "impediments."

Mia: So we have a split picture, an agreement Iran describes as near final versus a U.S. rejection of the draft plan's terms. On top of that, gold prices surged as Hormuz inched closer to reopening, and silver opened at its highest level since June.

Milo: The timing and scope of any partial reopening remain uncertain. What's next is the final details of the Iran-Oman agreement, whether the U.S. accepts the terms, and whether oil, gold, and silver hold their moves as the situation develops.

Mia: Finally, let's talk about Diageo, described as the world's biggest spirits maker. Its shares rose about four percent on a one billion dollar cost-cutting plan.

Milo: The company, whose brands include Johnnie Walker scotch whisky, Captain Morgan rum, and Guinness stout, said that costs related to the savings program will amount to one point two billion dollars. Now, those two numbers, the one billion dollar plan versus the one point two billion in program-related costs, aren't reconciled in the report.

Mia: That's a real source of uncertainty. The four percent share move is the only reported market reaction, and it's attributed to the cost-cutting announcement. But we have no detail on timing, the nature of those costs, targeted savings, or any impact on earnings or guidance.

Milo: So the big open question is what that one point two billion figure actually covers, and what the program is expected to deliver. A next useful signal would be company detail on the program's structure and financial effect, none of which appears in what we've seen.

Mia: That'll do it for today's tape. Thanks for joining us on After Market.

Milo: We'll see you next time.