Market Performance Overview (Current Day)
- S&P 500: Declined 0.3% to 6,370.86, taking a breather after recent highs.
- Nasdaq: Fell 0.38% to 2198.29, with upward momentum somewhat constrained.
- Dow Jones: Down 0.46% to 44,632.99, pressured by disappointing UnitedHealth earnings.
- Gold: Rose slightly by 0.04% to $3,323.30 per troy ounce.
- Oil (WTI): Increased over 4% to $69.46 per barrel, reflecting continued concerns over Trump’s rhetoric regarding Russia.
- US 10-Year Treasury Yield: Dropped significantly by 9.6bp to 4.324%, as market expectations for Fed rate cuts increased ahead of the FOMC meeting.
- Volatility Index (VIX): Up 6% to 15.98, indicating some market instability.
- Dollar Index: Continued its strong rally, rising 0.28% on the London ICE futures market to 98.91.
- Russell 2000: Declined 0.64%, mirroring the broader market’s cautious mood.
The market initially seemed to hold steady in the morning but then retreated, largely due to disappointment over the outcomes of the US-China trade talks.
Cryptocurrency Market Trends
The crypto market showed weakness, though with limited declines. Bitcoin was down 0.48% to the mid-$117,000 range. Ethereum continued its correction, falling 1%. Ripple was down 1%, and Solana dipped 2%, signaling a cooling period over the weekend.
Heatmap and Sectoral Performance
Overall, the market heatmap showed widespread weakness. Meta was notably among the weakest of the “Magnificent Seven,” falling over 2%. In contrast, Google, which had been underperforming, rose 1.56%. Tesla was down 1%, and Nvidia dropped 0.7%, indicating a pause for these major tech players.
The healthcare sector was generally weak, with Eli Lilly falling over 5% due to Novo Nordisk’s earnings impact. Johnson & Johnson and Amgen managed slight gains. Energy stocks, however, surged with the rise in oil prices. Consumer staples like Coca-Cola, PepsiCo, and Philip Morris (with its earnings) showed resilience, while Procter & Gamble saw a minor decline.
Key Market Drivers & News
1. US-China Trade Talks Disappointment:
- Briefing & Interview: Treasury Secretary Steven Mnuchin provided a briefing and interview on the talks, but avoided optimistic language. The US delegation pressed China on intellectual property rights enforcement and explicitly urged China to include a shift towards a consumption-led economy (away from manufacturing exports) in its 5-year plan to create opportunities for US manufacturing.
- Energy & TikTok: Concerns were raised that China has been importing cheap Russian crude oil, and discussions about TikTok, which were expected to be a key point of negotiation, did not occur, disappointing market expectations.
- Extension Uncertainty: President Trump is expected to confirm the outcome of the talks with USTR Jamie Grear. While China hinted at extending the August 12th truce, official confirmation is pending, adding to market uncertainty.
2. Economic Indicators & Fed Outlook:
- JOLTS Report: Job openings decreased by 270,000 month-over-month to 7.437 million (rounded to 7.44 million), indicating a softening labor market and potentially easing pressure on the Fed to maintain tight monetary policy. This reinforces expectations for rate cuts starting in September.
- Hiring: The number of hires stood at 6.26 million, reflecting the weakening employment picture.
- Consumer Confidence: The Conference Board Consumer Confidence Index remained strong at 97.2. However, a four-and-a-half-year high was recorded in the number of respondents who found it difficult to find jobs.
- Trade Balance: The US goods trade deficit narrowed to $86 billion, better than consensus and the best since September 2023, driven by a significant 4.2% decrease in goods imports despite increased capital goods imports and exports.
- GDP Projection: The Atlanta Fed’s GDPNow model upgraded its Q2 GDP growth estimate to 2.9% from 2.3%, suggesting stronger economic performance.
- FOMC Meeting: The market expects a rate hold in July, with possible dissenting votes from Fed officials. The focus is on signals for a September rate cut, following the weakening jobs data.
Company-Specific News & Earnings
- Novo Nordisk (NVO): Plunged 21% after lowering its full-year revenue guidance, citing a significant slowdown in North American demand for its weight-loss drug, Wegovy. Increased competition from generic GLP-1 drugs is also impacting profitability. Wegovy’s prescription count was 100,000 fewer than Eli Lilly’s Zepbound, raising concerns about its growth trajectory despite a recent CEO change.
- Spotify (SPOT): Dropped 11% after its earnings report. While revenue grew 10% YoY, it slightly missed estimates. EPS of €0.42 was significantly below the expected €1.95, resulting in a net loss of €86 million, reversing its earlier profitability. Q3 revenue guidance of €4.2 billion also disappointed.
- SoFi Technologies (SOFI): Surged 6% (after reaching 11% intra-day), bucking the negative trend. SoFi reported strong growth in lending revenue (+32-35% YoY) and financial services revenue (over 100% growth), with total revenue up 44% to $858 million, its highest growth in two years. Adjusted EPS was better than consensus, and membership grew by 850,000. SoFi also raised its full-year net revenue forecast to the mid-$3.3 billion range and adjusted EPS to $0.31 (from $0.28). JPMorgan raised its price target, citing potential re-entry into crypto and support for blockchain-related remittances and stablecoin transactions.
- UnitedHealth Group (UNH): Declined 7% due to disappointing earnings. Despite revenue slightly exceeding consensus, Q2 EPS was $4.48, well below the $4.85 consensus. The company’s full-year adjusted EPS guidance of at least $16 was also lower than the market’s expectation of mid-$20s. Management admitted to underestimating the significant increase in medical costs this year.
- Procter & Gamble (PG): Down 0.32% despite solid earnings. Revenue rose 2% to $20.89 billion (above consensus), and EPS grew 6%. The company provided a strong full-year guidance, with organic sales growth up to 4% and EPS up to $7.09.
- Booking Holdings (BKNG): Down 1.5% despite strong Q2 results. Revenue grew 16% YoY, exceeding estimates, and adjusted EPS surged 32% driven by robust travel demand.
- JetBlue Airways (JBLU): Surged 6%. While Q2 revenue fell 3% YoY, it beat estimates at $2.4 billion. EPS loss of $0.21 was better than expected.
- Corning (GLW): Rose 11.86% driven by 41% growth in optical components, offsetting some weakness in display.
- Whirlpool (WHR): Continued its decline today, experiencing direct impact from tariffs.
- Starbucks (SBUX): Down in after-hours trading. Reported Q3 revenue of $9.5 billion (up 4% YoY), missing expectations. Adjusted EPS plummeted 46%, significantly below consensus. Global comparable store sales fell 2%, continuing a negative trend. Concerns were raised about management’s cost-cutting efforts (employee layoffs) while investing in seemingly unnecessary areas.
- Boeing (BA): Volatile during the day, closing down 4%. Despite a 35% YoY revenue growth and a reduced adjusted per-share loss of $1.24 (better than the expected $1.40), and a backlog of over 5,900 commercial aircraft, tariff impacts weighed on sentiment.
- Samsung-Tesla Collaboration: Tesla’s collaboration with Samsung Electronics is deepening. Elon Musk tweeted about a video call with Samsung Electronics Chairman Lee Jae-yong and other executives, discussing building a “true partnership” beyond AI chip consignment, focusing on maximizing strengths. This is particularly positive for Samsung.
- Nvidia (NVDA): Down 0.7% during market hours but trading up 0.3% after hours. Positive news regarding H20 chip exports to China, with Jenson Huang reportedly convincing the US government that restricting sales would lead China to develop its own chips.
- AMD (AMD): Up 2.18%. CEO Lisa Su’s comments about potential 5-20% price increases for products from TSMC’s Arizona fab, including the new MI350 series, boosted the stock.
Upcoming Events (Tomorrow – July 31st)
- Economic Data: Eurozone GDP, US ADP Private Employment Report, US Q2 GDP Growth (preliminary).
- Key Event: FOMC Statement at 2 PM ET (crucial), including Chair Powell’s press conference. This will be the most important event of the day, as markets seek clarity on the timing and pace of future rate cuts (especially for September).
- Key Earnings:
- Before Market Open: Altria, Vertiv, GE Healthcare.
- After Market Close: Microsoft, Meta Platforms, Qualcomm, Arm Holdings, Lam Research, Robinhood.
Important Notice: This content is for informational purposes only and does not constitute financial advice. Stock market investing carries significant risks. Past performance is not indicative of future results. Conduct your own research and consult a qualified advisor.