Key Takeaways
- Corporate Earnings Outperform: Major players including Regeneron (REGN), Valero (VLO), and Hershey’s (HSY) reported significant Q2 2026 beats, with Regeneron seeing a 38% surge in Dupixent sales and Valero posting an adjusted EPS of $12.54, far exceeding estimates.
- Middle East Escalation: The Iranian IRGC launched a ballistic missile attack on a U.S. base in Jordan on Thursday morning; while U.S. Central Command reported all missiles were intercepted, the U.S. responded with a "heavy wave of strikes" on IRGC targets in Iran.
- Bank of England Holds Rates: The Bank of England maintained the Bank Rate at 3.75% in a 6-3 vote, citing renewed inflationary risks driven by energy prices and the ongoing conflict in the Middle East.
- Bombardier Swings to Profit: Bombardier (BBD.B) reported a strong Q2 with free cash flow of $228 million, a sharp reversal from last year's cash burn, supported by a growing backlog of $21.8 billion.
- Strait of Hormuz Diplomacy: Talks between Iran and Oman continue regarding a new management framework for the Strait of Hormuz, as regional powers attempt to stabilize the vital energy corridor amid active hostilities.
Corporate Earnings Highlights
Regeneron Pharmaceuticals (REGN) delivered a powerhouse second quarter, reporting total revenues of $4.3 billion, a 17% increase year-over-year. The growth was spearheaded by Dupixent, which hit a record $6.0 billion in global net sales, and EYLEA HD, which saw U.S. sales jump 52% to $596 million. The company’s non-GAAP EPS of $14.29 comfortably beat the analyst consensus of $10.30.
Valero Energy (VLO) also crushed expectations, posting adjusted net income of $3.7 billion, or $12.54 per share, against estimates of roughly $10.10. Revenue reached $44.48 billion, driven by strong refining margins and operational discipline. The company confirmed that its St. Charles Refinery optimization project remains on track for a Q3 2026 start.
The Hershey Company (HSY) raised its full-year 2026 outlook after reporting an adjusted EPS of $1.90 on net sales of $2.79 billion. Despite an 8% decline in volume due to price elasticity, a 12-point gain from pricing actions allowed the chocolate maker to expand gross margins significantly. The company now expects full-year net sales growth of 4.5% to 5%.
Geopolitical and Macroeconomic Developments
The geopolitical landscape darkened Thursday as the Iranian IRGC targeted the Al-Azraq base in Jordan. While the IRGC claimed the destruction of several F-35 aircraft, U.S. Central Command (CENTCOM) stated that all incoming missiles were intercepted with no damage to assets. In immediate retaliation, the U.S. military launched a two-hour operation striking dozens of IRGC command centers and drone facilities across Iran, including sites on Qeshm Island.
In London, the Bank of England (BoE) opted for caution, holding interest rates steady at 3.75%. The decision was influenced by the "resumption of Iran War hostilities," which has pushed oil prices back toward $100 per barrel. While UK inflation recently dipped to 2.6%, policymakers warned that rising energy costs could force rate hikes later this year, with markets now pricing in three potential increases by December.
Amidst the conflict, diplomatic efforts remain active as Oman pitches a "Gulf-backed" plan for the joint management of the Strait of Hormuz. The proposal suggests voluntary shipping fees and shared oversight to ensure the flow of global energy. However, Tehran continues to insist on maintaining primary control over the waterway, leaving the success of the negotiations in doubt as military exchanges continue.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.