July 23, 2025
S&P futures up 0.4% in Wednesday morning trading, following a strong Tuesday session where U.S. equities rallied on rotation into value, with equal-weight S&P outperforming by 120 bp. Memes, homebuilders, healthcare, and chemicals led gains, while autos, AI, tobacco, and aerospace lagged. Asian markets rallied, led by Japan (+3.5%), and Europe is up ~1.5%. Treasuries weaker, with long-end yields up 3–4 bp. Dollar and gold little changed. Bitcoin futures down 1.5%, WTI crude off 0.3%.
Risk appetite boosted by a U.S.-Japan trade deal featuring a 15% tariff on autos—lower than the 25% previously threatened. Follows similar deals with the Philippines and signs the China deadline could be extended. Retail FOMO, meme stock volatility, and rotation headlines remain prominent. However, renewed pressure on global yields—particularly in Japan—is raising some concern.
On the corporate side:
- SAP saw positive reaction on cloud strength (CCB), but only reiterated FY guide.
- TXN Q2 topped expectations; Q3 guide mixed, with tariff-related pull-ins and weak Auto.
- ISRG beat and raised FY25 procedure growth guidance.
- COF touted earnings potential post-acquisition, despite higher integration/investment costs.
- CNI cut FY25 guide due to trade/tariff uncertainty.
- MANH surged on strong RPO and new logo growth.
- HSY raised product prices.
June existing home sales on deck today. Also watching a $13B 20-year Treasury auction. Later this week: initial claims, flash PMIs, new home sales (Thursday), and durable goods orders (Friday). No Fedspeak ahead of the July FOMC, but market still pricing ~45 bp in cuts this year; possible dissent risks from Waller and Bowman.
U.S. equities were mostly higher on Tuesday, with the S&P 500 setting another record close despite giving back gains late. The Nasdaq broke a six-session winning streak, weighed down by weakness in semis and megacaps like NVDA. Broader participation improved as equal-weighted S&P (RSP) outperformed the cap-weighted index by 120 bp—rotation into value was the story of the day, with homebuilders, medtech, life sciences, chemicals, and rails leading.
Treasuries rallied, pushing long-end yields down 3–5 bp. The dollar index fell 0.5%, while gold gained 1.1% and Bitcoin rose 2.4%. WTI crude settled down 1%.
Economic data were light but disappointing: the Richmond Fed manufacturing index fell to -20 (vs. -1 expected), with sharp drops in shipments, new orders, and hiring. Expectations for price increases rose. Market focus remains on U.S. macro resilience, low-volatility dynamics, and AI-led productivity themes. Fed policy remains unchanged heading into next week’s meeting, though potential dissents from Waller and Bowman have been flagged. Markets are currently pricing in ~45 bp of rate cuts by year-end.
Tariff headlines remain front and center. Trump announced a new 19% tariff rate for the Philippines and Indonesia, down from 20%, while also confirming U.S. trade and military deals with both countries. Treasury Secretary Bessent said the U.S. may extend the Aug. 1 China deadline, but stumbling blocks remain. Copper shipments are surging into the U.S. ahead of tariff implementation, and currency effects (weaker USD) are helping U.S. exporters navigate the impact.
S&P 500 Sector Performance & Stock Level Highlights:
- Outperformers: Healthcare +1.90%, Real Estate +1.78%, Utilities +1.29%, Materials +1.28%, Consumer Disc. +0.67%, Financials +0.55%, Energy +0.52%, Industrials +0.30%, Consumer Staples +0.23%
- Underperformers: Information Technology −1.08%, Communication Services −0.31%
Information Technology (−1.08%)
- NVDA extended losses following concerns over AI chip availability.
- LMT (−10.8%) missed on EPS and revenue with $1.6B in charges; FCF sharply missed. FY25 EPS guidance cut.
- RTX (−1.6%) beat on Q2 EPS and revenue, led by aero aftermarket, but cut FY EPS/sales due to tariffs and tax headwinds.
Health Care (+1.90%)
- MEDP (+54.7%) soared after a Q2 beat and strong bookings; FY guidance raised sharply.
- IQV (+17.9%) posted beats across segments, raised FY guide; strong book-to-bill and backlog.
- DGX (+7.1%) beat Q2 expectations; organic growth improved to 5.2%, FY guide raised.
- THC (−10.7%) beat on EBITDA and raised FY outlook; added $1.5B buyback, but HIX-linked 2026 headwinds raised caution.
- REPL (−77.2%) collapsed after receiving an FDA complete response letter for melanoma treatment.
Consumer Discretionary (+0.67%)
- DHI (+17.0%) beat on earnings and orders; raised buyback guidance.
- PHM (+11.5%) also beat with strong GM and closings; ASPs light, backlog below.
- GM (−8.1%) Q2 results beat but NA EBIT and margin missed; raised guidance for higher Q3 tariff impact.
- SHOP (−3.7%) downgraded at Loop Capital on valuation.
Consumer Staples (+0.23%)
- KO beat slightly with unchanged FY guide; volumes light.
- PM (−8.4%) beat on EPS but missed on revenue; ZYN volumes light and Q3 EPS guidance below consensus.
Industrials (+0.30%)
- NOC (+9.4%) beat Q2 and raised MTM-adjusted FY EPS and revenue guidance.
- CSX (+2.5%), NSC: both rose on M&A speculation involving BNSF (BRK) and Goldman Sachs.
- PCAR (+6.1%) posted EPS beat and margin strength despite slight revenue miss.
- BAH (+2.4%) upgraded to outperform at William Blair, citing improved visibility.
Materials (+1.28%)
- CLF (+6.2%) upgraded at KeyBanc following strong Q2; analysts cite improved cost controls and potential auto share gains.
- Commodity chemical names were broadly higher.
Financials (+0.55%)
- KEY beat and raised FY NII and loan growth guidance.
- ZION posted strong PPNR beat driven by better NII and fees.
- SYF credit metrics solid but missed on PPNR.
- EFX (−8.2%) beat Q2 but underwhelmed on Q3/FY guidance.
- NTRS up on deal chatter involving Goldman Sachs.
- Kohl’s surged after being tagged as the latest Wall Street Bets favorite.
Real Estate (+1.78%) / Utilities (+1.29%)
- Outperformed as rate-sensitive sectors rallied on lower long-end yields.
Communication Services (−0.31%)
- IPG (+7.0%) beat on EPS; organic rev decline improved; FY guide maintained.
- GOOGL, META, and broader entertainment stocks lagged.
Energy (+0.52%)
- HAL to retire equipment amid weakening demand for oilfield services.
- Indonesia to sign $8B deal with KBR as part of U.S. trade deal.
Eco Data Releases | Wednesday July 23rd, 2025
S&P 500 Constituent Earnings Announcements | Wednesday July 23rd, 2025
Data sourced from FactSet Research Systems Inc.
