The S&P 500 continues to reach new highs, with SanDisk and Western Digital announcing their earnings results. Three major events and their interplay are shaping the narrative of the AI bull market.

On Wednesday, U.S. stock indices opened strongly, with the Dow rising 0.33%, the Nasdaq up 0.43%, and the S&P 500 increasing by 0.45%. If this upward trend continues to the close, the S&P 500 index is expected to set a new historical high for the second consecutive trading day. Keith Lerner, Chief Investment Officer of Truist Advisory Services, stated, "Existing evidence still supports our confidence in the bull market. Earnings remain our focal point, the economy continues to show resilience, market breadth is expanding, and the issue of high valuations has largely been resolved." Falling oil prices and progress in U.S.-Iran negotiations: the three major futures indices are modestly rising, and the S&P is poised to challenge record highs. As of release, the Dow was up 0.33%, the Nasdaq was up 0.43%, and the S&P 500 was up 0.45%. In the previous trading session, the S&P 500 ended up 1.79%, closing at 7736.51 points, marking the first historical closing high since June. Key factors driving market sentiment include: President Trumps remarks that negotiations with Iran are "progressing very well," suggesting the potential reopening of the Strait of Hormuz; U.S. Customs has returned about $100 billion in tariffs previously imposed under the International Emergency Economic Powers Act. Oil prices and precious metals are rising in tandem, with London gold up 2.08% to $4166.77 per ounce. WTI crude oil prices increased slightly by 0.3% to around $76 per barrel. Earlier, President Trump indicated that negotiations with Iran were "progressing very well," and the easing political risks associated with GEO Group Inc provided support for the market. Event One: The "super cycle" for storage chips faces its ultimate test, with earnings reports from SanDisk and Western Digital Corporation to be revealed tonight. The storage chip sector is the absolute focus of today's after-hours trading. This evening, two AI storage starsSanDisk (SNDK.US) and Western Digital Corporation (WDC.US)will release their earnings reports simultaneously, becoming the core focus of the market. Both companies are major contributors to this years benchmark index rise, and the market is holding its breath to validate the sustainability of the AI storage cycle with their reports. The market generally expects SanDisk to announce significant revenue and profit growth; more importantly, after tech giants like Amazon.com, Inc. (AMZN.US) and Microsoft Corporation (MSFT.US) pledged continued investment in artificial intelligence computing infrastructure last week, SanDisk is also expected to provide an optimistic earnings outlook. Shares of both companies soared significantly after strong earnings releases, but it remains to be seen whether SanDisks similar performance can trigger a comparable stock price increase. SanDisk's earlier official guidance showed Q4 revenue between $7.75 billion and $8.25 billion, a quarter-over-quarter increase of approximately 34%, and a year-over-year surge of over 320%; the non-GAAP gross margin is expected to be between 79% and 81%, with a non-GAAP diluted EPS of $3 to $3.30. Wall Streets expectations are even more aggressive: the consensus expects revenue of $8.39 billion, a quarter-over-quarter increase of 41%; an EPS of $3.30, a quarter-over-quarter increase of 43%. Seeking Alphas Cavenagh Research has a higher forecastexpected revenue of $8.4 billion to $8.7 billion, and non-GAAP EPS of approximately $3.60. For Western Digital Corporation, analysts expect Q4 revenue of $3.71 billion, a year-over-year increase of 43%, and adjusted EPS of $3.35, nearly doubling compared to the previous year. Analysts widely anticipate that Western Digital Corporations performance will greatly exceed expectations and raise their outlooks. In July, SanDisks stock price plummeted by 47%, evaporating over $150 billion in market capitalization, marking its worst monthly performance since going public in February 2025. However, this week the stock has rebounded for two consecutive days, rising 6% on Monday and another 11% on Tuesday. The options market anticipates about a 14% swing in SanDisks stock price following the earnings release. According to FactSet, among the 61% of S&P 500 constituents that have reported earnings, 86% surpassed expectations, with an overall earnings year-over-year growth rate exceeding 47%, marking the best single-quarter performance in nearly five years. Event Two: SpaceX plunges over 12%, as its first quarterly report faces the largest stock lock-up expiration in history. SpaceX (SPCX.US) saw its stock price plummet over 12% during early trading. Despite the companys strong performance in its first quarterly report post-IPOreporting Q2 revenue of $7.8 billion, a 92% year-over-year increase; adjusted EBITDA at $3.5 billion, a 191% year-over-year increaseconcerns arose over an operating loss of $1.26 billion in its AI business and capital expenditures of $18.37 billion. Greater pressure stems from the upcoming lock-up expiration tomorrow. Up to 912 million shares of SpaceXs restricted stock will become available for trading on Thursday, Eastern Time, which at the August 4 closing price of $125.33 represents a market value of about $114 billion, equivalent to 1.4 times the current floatthis is set to be the largest stock lock-up expiration in U.S. capital market history. Industry expectations suggest a significant sell-off in the near term, with some pre-IPO investors looking to cash out in order to purchase private stock from companies like Anthropic and OpenAI. S3 Partners data shows that as of July 29, SpaceX's short interest had reached 219.3 million shares, accounting for 34% of publicly traded shares, representing an increase of over 840% from 23.3 million shares on June 16. Matt Kennedy, a senior strategist at Renaissance Capital, stated, SpaceX employees and early investors will find it hard to resist the opportunity to sell shares, given their massive gains. Robert Hackel, CEO of institutional brokerage firm R.F. Lafferty & Co., revealed that many early investors have called seeking to cash out SpaceX shares to invest in private equity capital in upcoming IPOs of AI companies like OpenAI and Anthropic. Event Three: AMDs guidance misses aggressive expectations, leading to a drop in stock price. AMD (AMD.US) released its earnings report on Tuesday, showing Q2 revenue grew 50% year-over-year to $11.536 billion, surpassing the expected $11.3 billion and setting a new record. Data center revenue reached $6.7 billion, a 107% year-over-year increase, accounting for 58% of total revenue. However, the issue lies in the Q3 guidance. AMD projects Q3 revenue of around $13 billion, with a fluctuation of $300 million. Although this guidance is above Wall Streets average expectation of $12.5 billion, some aggressive investors had previously raised their expectations to levels well above $13 billion. Following the earnings announcement, AMD's stock price fell by 5% in early trading. CEO Lisa Su emphasized on the earnings call that the data center business would see "more than double growth" by 2027, with the AI-related market expected to reach $1.4 trillion by 2030. However, the market seemingly cares more about the short-term rhythm. This year, AMDs stock has more than doubled, and its high valuation means any "imperfection" will be magnified. Conclusion Todays pre-market picture for U.S. stocks shows a subtle scene: at the macro level, the three major indices are moderately up, with the overall earnings growth rate during earnings season exceeding 47% providing solid support for the market; at the micro level, the extreme differentiation among individual stocks reveals the core contradiction in the current marketexceeding expectations is no longer a protective charm, as the market is re-evaluating each earnings report and guidance with the most stringent standards. The plunge in SpaceX indicates the crushing of "lock-up expiration expectations" over "stellar earnings," signaling the vulnerability of AI star shares in the face of massive stock unlocks. The drop in AMD reveals the extreme demands of investors on growth rhythm in a high-valuation environment. Tonight, the earnings reports from SanDisk and Western Digital Corporation will determine the quality of the AI storage "super cycle"whether it represents a prime opportunity for valuation reevaluation or the last hurrah before the cycle peaks. The answer will be revealed in after-hours trading.