In the early hours of August 7, Beijing time, the U.S. stock market experienced its first notable pullback of August. The Dow Jones Industrial Average fell 464.02 points, or 0.85%, to close at 53,885.10, ending a five-session winning streak; the Nasdaq Composite edged down 0.06% to 26,348.35; the S&P 500 slipped 0.18% to 7,710.02. Behind the three major indexes' collective decline were twin pressures: a tougher earnings-season pricing environment and renewed Middle East geopolitical risks.

1. Earnings Season Reversal: Why Did Beating Estimates Send Stocks Crashing?

This round of U.S. earnings season has entered its second half, and the market's scrutiny of companies has become increasingly harsh — beating profit and revenue expectations is no longer enough to support share prices; forward guidance has become the decisive factor in capital flows. JJ Kinahan, head of retail expansion and alternative investment products at the Chicago Board Options Exchange, commented: 'After a wave of active trading triggered by earnings season, the market appears to be mostly catching its breath. Better-than-expected profits and sales, if accompanied by weak forward guidance, do not always push stocks higher.'

On the trading floor, the memory chip sector was the hardest hit. SanDisk shares tumbled 6.8% after its fiscal fourth-quarter results failed to impress investors; Western Digital at one point plunged more than 20% intraday, closing down 13%, despite fourth-quarter results that beat estimates, because its fiscal first-quarter guidance disappointed the market. The Roundhill memory ETF fell more than 4%. In addition, AppLovin plummeted 19.7% on mixed quarterly results, becoming one of the day's biggest decliners; Dow component Salesforce also fell 3.2% after announcing a management shake-up.

Notably, the reports from these two memory leaders were not actually bad. The data showed SanDisk's fiscal Q4 2026 revenue reached $8.965 billion, surging 372% year over year and up 51% sequentially, with adjusted earnings per share as high as $39.25, and the company authorized a $14 billion buyback plan; Western Digital posted revenue of $3.747 billion in the same period, up 44% year over year, and adjusted EPS of $3.56, also ahead of analyst expectations. But the market responded with a wave of selling after hours and at the next day's open — a sensitive reaction from high-flying sectors to the 'ceiling of expectations'.

As Kinahan pointed out, 'Some profit-taking may also be occurring.' Over the past 12 months, SanDisk shares have surged roughly 3,000%, while Western Digital has gained more than 500%. After such an epic rally, any detail that falls short of expectations could trigger sharp selling — even Elon Musk's reassurance on social media that 'storage demand is growing ten times faster than supply' failed to fully calm the market. The structural logic of AI-driven storage demand remains intact, but the cracks between short-term valuations and expectations have begun to show.

2. New Strait of Hormuz Uncertainties: Geopolitical Premium Returns

Beyond earnings, the Middle East situation has again become the sword of Damocles hanging over the market. According to Iranian state media citing a member of parliament, a draft on navigation conditions in the Strait of Hormuz reportedly would ban U.S. and Israeli ships from passing through the key waterway, and countries that have 'caused damage to Iran' would also be denied transit permits. The plan is under review by a committee of the Iranian parliament. As a result, international oil prices rose on Thursday, and the energy sector led the S&P 500 higher against the trend, becoming one of only two sectors to gain on the day, up more than 1%.

However, there are also signs of de-escalation. Iran's Foreign Ministry spokesperson previously said that Iran and Oman have been negotiating for the past two months on safe passage route arrangements for commercial vessels, with talks described as 'professional and productive,' and the two sides have agreed on the geographical coordinates of a proposed new route. An Iranian government official also said that under an interim agreement, shipping through the waterway would be exempt from fees or tolls. But Deutsche Bank strategist Jim Reid cautioned: 'In this conflict, the market has seen multiple false dawns. While the details are becoming more specific, the focus has now shifted from whether an agreement can be reached to what the final arrangement will look like.'

For investors, the Strait of Hormuz affects roughly one-fifth of global seaborne oil trade. Its direction directly impacts oil prices, inflation expectations, and even the Federal Reserve's monetary policy path. The repeated geopolitical risks mean the seesaw effect between commodities and risk assets will persist for some time. Any news of progress or collapse in talks could trigger sharp two-way swings in oil prices.

3. Global Asset Linkage: Gold Surges, Dollar Weakens

Looking at the longer timeline, the past two days of U.S. market turbulence have not been an isolated event. The previous day (Wednesday Eastern time), the Dow had just set another record high at 54,349.12, but the Nasdaq and S&P 500 had already begun to retreat; SpaceX plunged 13.61% in a single day, erasing about $225.2 billion in market value; AMD fell more than 7%, and Alphabet Class A fell over 4%. The sharp divergence between tech giants and hot theme stocks revealed widening structural disagreements within the market.

Meanwhile, safe-haven assets and the dollar moved in opposite directions. COMEX gold futures surged 3.74% to $4,308/oz, silver futures rose 3.34% to $62.26/oz; the U.S. dollar index fell 0.18% to around 99.676. Gold's strength and the dollar's weakness not only reflect market pricing of geopolitical risk, but also, to some extent, global investors' reassessment of the value of dollar assets.

For the Vietnamese market, the direction of the dollar index has historically been highly correlated with the Vietnamese dong exchange rate. A weaker dollar helps ease depreciation pressure on the dong and gives the State Bank of Vietnam greater room for monetary policy; but if geopolitical conflicts escalate and trigger a global flight to safety, emerging-market currencies and cross-border capital flows could still face temporary volatility, and the stability of foreign exchange reserves will become an important indicator of Vietnam's financial resilience.

4. Vietnamese Investor Perspective: A Pullback Is Both Risk and Opportunity

For Vietnamese investors with exposure to U.S. stocks, this pullback offers a window to reassess asset allocation. First, on the long-term logic, the earnings fundamentals of leading U.S. companies have not fundamentally reversed; structural tracks such as memory chips and AI computing capacity remain solid. But on the short-term rhythm, volatility in high-flying sectors has clearly amplified, and the comfort zone of 'buy and hold' is narrowing.

At the operational level of cross-border investing, the following points deserve Vietnamese investors' attention:

• Diversify sector exposure: Avoid concentrating positions in a single sector such as memory or semiconductors that have surged recently; consider tilting toward sectors like energy and financials that benefit from geopolitical and interest-rate environments.
• Pay attention to earnings guidance: In the second half of earnings season, forward guidance carries more pricing weight than historical results. Be cautious with high-flying names with weak guidance and avoid blindly 'buying the dip.'
• Manage currency risk: U.S. stock investing involves two-way exposure between dollar assets and the Vietnamese dong. Investors can hedge currency fluctuations through staged currency conversion or forward instruments based on the USD/VND trend.
• Keep cash ammunition: With geopolitical risks still unclear, maintain a certain share of cash or money-market funds to seize opportunities from sentiment-driven selloffs.

In addition, from the perspective of cross-border capital flows, the global rebalancing among U.S. stocks, gold, and emerging markets will directly affect the pace of inflows into Vietnam's capital account and the stability of its foreign exchange reserves. The State Bank of Vietnam's policy stance on maintaining dong exchange-rate stability and managing reserves will remain an important variable for Vietnam's financial markets in the second half of the year.

5. Conclusion: August Enters 'High-Volatility Mode'

Taken together, the U.S. market in August is shifting from a one-way rally to a high-volatility mode. On the one hand, earnings season's differentiated pricing of corporate results will continue to dominate individual stock performance, and the battle over the memory sector's 'expectations ceiling' is far from over. On the other hand, repeated geopolitical variables such as the Strait of Hormuz have made the linkage between oil, gold, and the dollar more sensitive. For Vietnamese investors, rather than chasing short-term ups and downs, it is better to build a balanced cross-border allocation portfolio based on an understanding of global capital flows — perhaps that is the optimal answer to a 'turning-point month.'