July 21, 2025
S&P futures are up 0.3% to start the week, extending last week’s gains that saw the S&P 500 and Nasdaq close at record highs on Thursday. Big tech continues to lead, with Tesla (TSLA) and Nvidia (NVDA) among the standouts. Asian markets traded mostly higher overnight, led by Greater China; Japan was closed for a holiday. European markets are modestly lower, down about 0.2%. Treasuries are rallying with yields down 3–5 basis points. The dollar is off 0.2%, gold is up 0.4%, Bitcoin futures up 1.2%, and WTI crude down 0.4% after last week’s 1.5% decline.
Policy and Political Backdrop:
Headlines over the weekend pointed to cooling tensions between Trump and Fed Chair Powell, with reports that advisor Bessent persuaded Trump to abandon plans to fire Powell. However, concerns remain over the independence of potential successor Kevin Hassett if nominated. On trade, Trump is pushing for a summit with China’s Xi, while expressing optimism about a near-term US-EU deal. EU trade negotiators are in Washington, though Brussels is still preparing retaliatory tariffs if talks break down. These developments reinforce the market’s TACO narrative (Tariffs Are Coming Optimism), which continues to support risk appetite despite ongoing geopolitical risks.
Macro Data Outlook:
The U.S. economic calendar is light until midweek. On Wednesday, existing home sales for June are due alongside a $13B 20-year bond auction. Thursday brings initial jobless claims, flash PMIs for July, and new home sales, followed by June durable goods orders on Friday. The Fed blackout period ahead of the July FOMC meeting is now in effect. No Fedspeak is expected, though Chair Powell will deliver opening remarks Wednesday at a capital framework conference for large banks. Markets are still pricing in just under 50 bp of Fed easing by year-end.
Earnings and Corporate News Highlights:
- ~135 S&P 500 companies will report earnings this week, including Tesla (TSLA) and Alphabet (GOOGL).
- This morning’s earnings slate features Domino’s Pizza (DPZ), Roper Technologies (ROP), and Verizon (VZ).
- Nvidia (NVDA) reportedly has limited availability of its H20 AI chips and currently has no plans to restart production.
- Amazon (AMZN) has raised prices on essential items, in contrast to recent price cuts at Walmart (WMT).
- Microsoft (MSFT) is under scrutiny following a global hack targeting its SharePoint collaboration software.
- Meta (META) continues its aggressive AI hiring spree, drawing media attention.
- YouTube (GOOGL) is now the most-watched video platform on U.S. televisions.
- McDonald’s (MCD) seeing strong demand following the return of its popular Snack Wraps.
- XYZ Corp is rallying after being announced as the S&P 500 replacement for Hess (HES).
U.S. equities ended mixed in a quiet Friday session (Dow –0.32%, S&P 500 –0.01%, Nasdaq +0.05%, Russell 2000 –0.61%), with modest losses for most major indexes following Thursday’s record highs. Markets traded in a tight range, as investors digested Fed commentary, softer earnings in parts of the market, and fresh macro data.
Economic data was broadly supportive:
- June housing starts came in at 1.321M SAAR, beating consensus and upwardly revised May levels.
- July University of Michigan Consumer Sentiment rose to its highest level since February, with improvements in both current conditions and expectations. Most notably, inflation expectations declined, with 1-year dropping 0.6 pp to 4.4% and 5-year falling 0.3 pp to 3.6%—the lowest since February.
Fed policy remained a key focus. Governor Waller reiterated his support for a possible July rate cut, citing easing inflation and signs of labor market softening. However, other officials this week maintained a “wait-and-see” stance, and market pricing still sees July action as unlikely. Tensions between Trump and Powell persisted, with Powell defending the Fed’s HQ renovation amid political threats. No major Fedspeak is expected until Chair Powell’s remarks on Tuesday, ahead of the Fed’s pre-meeting blackout period.
On trade, headlines turned more hawkish. The Financial Times reported Trump escalated tariff demands in EU talks, pushing for a 15–20% minimum tariff, and rejecting sectoral carve-outs. In Asia, advisor Bessent remained optimistic on a Japan deal.
Sector Highlights
Financials (+0.07%)
- Interactive Brokers (IBKR) jumped 7.8% on a Q2 beat, with strong NII and record commission revenue.
- Regions Financial (RF) rose 6.1% after beating on Q2 EPS, NII, and NIM; guided Q3 NII to flat/modestly higher.
- Comerica (CMA) gained 4.7% on better loan growth and fee income; NIM missed, and Q3 NII guided slightly lower.
- Charles Schwab (SCHW) added 2.9% on EPS/revenue beat, NIM improvement, and higher sweep balances.
- Western Alliance (WAL) fell 4% despite a Q2 beat; NIM was light and expenses are expected to rise.
- American Express (AXP) slipped 2.4% despite record card spending; analysts cautious on billed business growth and proprietary accounts.
Health Care (–0.60%)
- CRISPR Therapeutics (CRSP) rose 18.2% after significant insider buying by Simeon George/SR One Capital (~989.8K shares).
- Sarepta (SRPT) plunged 35.9% after disclosing a patient death in a Phase I study; incident was not disclosed earlier in the week.
- Elevance Health (ELV) dropped 8.4% after a downgrade at Leerink, which cited poor earnings growth visibility into 2026.
- Humana (HUM) declined 1.4% after a Texas court dismissed its case seeking to reverse cuts to Medicare bonus payments.
Information Technology (–0.10%)
Communication Services (–0.22%)
- Netflix (NFLX) dropped 5.1%. Despite a Q2 beat and raised Q3 guidance, high expectations and concerns over content costs and limited subscriber data weighed.
Industrials (–0.19%)
- 3M (MMM) fell 3.7% despite beating Q2 estimates and raising guidance; some weakness noted in Consumer segment, and tariff commentary added caution.
- UNP in focus on reports it’s targeting NSC for a potential acquisition.
- Autoliv (ALV) slid 4% despite a Q2 beat and FY guidance raise; concerns over Chinese mix shifts and margin compression persisted.
- Talen Energy (TLN) soared 24.5% after announcing the $3.5B acquisition of two combined-cycle gas plants in the PJM market.
Energy (–0.96%)
- Chevron (CVX) gained modest support after winning arbitration over Guyana oil assets, clearing its path to acquire Hess (HES).
- Schlumberger (SLB) fell 3.9%. Q2 beat on headline metrics, but FCF and operating cash flow missed; North America weakness noted.
Consumer Discretionary (+0.98%)
- Sector broadly higher, though auto supplier Autoliv (ALV) underperformed.
- Netflix (NFLX) pullback was a drag despite strong top-line performance.
Consumer Staples (–0.37%)
- No major company-specific developments Friday; softness tied to rotation out of defensives and weaker sentiment on content cost inflation spillovers.
Utilities (+1.71%)
- Outperformed broadly as bond yields stabilized and equity volatility returned. No major headlines, but sector saw strongest gain on the day.
Real Estate (+0.36%)
- Sector rose modestly as bond yields firmed but didn’t spike. Positive backdrop supported by strong housing starts data.
Materials (+0.35%)
- Commodity chemicals and containerboard names among Friday’s laggards amid trade/tariff concerns.
Eco Data Releases | Monday July 21st, 2025
S&P 500 Constituent Earnings Announcements | Monday July 21st, 2025
Data sourced from FactSet Research Systems Inc.
