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Market Recap

We’ve said many times that markets don’t like uncertainty, and yesterday was a good example of them responding positively to certainty. Announcements on new tariff deals with Indonesia, Malaysia, and, more importantly, Japan and Europe seemed to lift so-called “animal spirits” even in the face of a 15% increase in wholesale costs for covered products. That being said, both the Nasdaq Composite and the S&P 500 closed on fresh all-time highs, and the Dow crossed 45,000 (not seen since December 4, 2024, and only about 4 points off another ATH). Mag 7 and technology seemed to detract from overall results as evidenced by the Nasdaq Composite gaining 0.61%, the S&P 500 rising 0.78% and the Dow adding 1.14%. Small caps won the day as the Russell 2000 closed 1.53% higher.

Other signs of healthy breadth yesterday include an advance/decline line of 343/160 for holdings of the SPDR S&P 500 Trust ETF (SPY) and seeing only Nvidia (NVDA) and Meta Platforms (META) showing up in the top 10 list of contributors to return for the fund with remaining names coming from a healthy mix of sectors. Speaking of sectors, Utilities was the only one to close lower, down 0.75%. Leadership came from Healthcare, which was buoyed by pharmaceutical and medical device makers like Eli Lilly & Co (LLY), Thermo Fischer Scientific (TMO), and Align Technology (ALGN), which combined to contribute to just over 33% of the sector’s 2.05% result. The remaining sectors saw results ranging from 0.04% (Consumer Staples) to 1.79% (Industrials).

Tematica Select Models saw positive results yesterday, with the exception of Digital Lifestyle (DLIFE), Homebuilding & Materials (HOMES), and Cash Strapped Consumer (PINCH). Leadership came from EV Transition (EVTRANS)as Japanese automakers got a boost from the tariff agreement announcement. Monday’s profit taking in Nuclear Energy & Uranium (NUKE) seemed to be a distant memory as traders once again bid up names in the segment.
 

Earnings Continue, Flash July PMI Ahead, Trump to Visit Powell

Equity futures are mixed this morning as investors contend with a mixed bag of June quarter earnings results and reports that President Trump will continue his passive-aggressive attack on the Fed. Trump will reportedly visit the Federal Reserve at 4 PM ET today, the first time in nearly two decades that an American president has made an official trip other than the central bank.

While we wait to see what unfolds from that visit and whether there are any additional trade deals announced today, better-than-expected quarterly results last night from the likes of Alphabet (GOOGL), Las Vegas Sands (LVS), T-Mobile (TMUS), and ServiceNow (NOW) are helping lift equity futures. Those gains are being tempered, however, by pre-market declines in the shares of Tesla (TSLA), Chipotle Mexican Grill (CMG), IBM (IBM), and Dow (DOW).

The array of earnings continues this morning, with those from Honeywell (HON), Lazard (LAZ), Textron (TXT),Union Pacific (UNP), and others. Following Alphabet's upsizing of its 2025 capital spending plans last night, we’ll be looking at those from Digital Realty Trust (DLR) when it reports after tonight’s market close. We’ll also be tuning into comments from Intel (INTC) about its June quarter, but also how it sees PC and data center demand shaping up in 2H 2025. Not to be those people, but we suspect that when all is said and done with the June quarter earnings season, we’re likely to see Intel continue to lose market share to the likes of AMD (AMD), Nvidia (NVDA), Marvell (MRVL), and others.

In between today’s rounds of corporate earnings, at 9:45 AM ET, S&P Global (SPGI) will publish its Flash July PMI report, and what it reveals will be a fresh take on the speed of the domestic economy, the pace of hiring, and inflation pressures at the start of the current quarter. We’ll be parsing those comments, looking to see the direction and velocity of those items relative to the last few months of the June quarter. The anecdotal insights from survey respondents and what they say about the impact of tariffs should also be insightful. Interesting timing for this report as Trump heads to visit Fed Chair Powell today.

We are also seeing the latest victories in the IPO market with offerings from Accelerant Holdings (ARX) and McGraw Hill (MH). While Accelerant priced its transaction at $21, above the targeted $18-$20 range, McGraw Hill’s landed at $17, below the expected $19-$22.

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