Market news: Over the past three months, Japan has reduced its holdings of U.S. Treasury bonds by $96 billion, bringing its total holdings down to $1.14 trillion, the lowest level since April 2025.

U.S. Central Command: A U.S. Marine Corps F-35C stealth fighter jet took off from the USS Abraham Lincoln (CVN 72), which is sailing in the Arabian Sea to support the U.S. blockade of Iran. As of August 2, the Middle East Command had redeployed 35 merchant ships, rendered two inoperable, and boarded and inspected two others.

American Airlines: Cancels all flights from New York to Ben Gurion Airport in Israel until March 2027.

The Russian Ministry of Defense stated that it had attacked infrastructure at the port of Mykolaiv in Ukraine and targeted two cargo ships carrying supplies to the Ukrainian Armed Forces, as well as a tugboat used to deploy underwater drones.

An explosion occurred at an ammunition depot at the Al-Taji military base north of Baghdad, according to Iraqi media reports. The Iraqi Security Media Center stated that the explosion was caused by excessively high temperatures inside the Al-Taji camp. The base has long been used by US-led coalition forces. Currently, there is no indication that the incident is related to an attack, nor is there further information regarding casualties.

Valueworks Chief Investment Officer Charles Lemonides said he wouldn't be surprised if chip stocks rebounded strongly after this sell-off, but he doesn't think they're likely to lead the next phase of the bull market because they've already had their moment. Last week, Amazon and Microsoft reiterated their commitment to invest hundreds of billions of dollars in AI alone over the next year, with most of that specifically earmarked for manufacturers of chips for data centers. But the problem is that the fundamentals are being questioned. Chip stocks, especially those focused on memory chips, are known for their cyclicality, often experiencing booms and busts due to fluctuating demand. Many on Wall Street remain convinced this cycle will be no exception. Valueworks' Lemonides said the profit explosion we're seeing is unsustainable. The bigger question is whether profit margins can be sustained; with profit margins so far out of historical norms, there's reason to expect a return to normal levels. The question is when, and how the stock market will react.