August 7, 2025
S&P futures +0.7%, building on Wednesday’s gains where tech led the rally (AAPL, AMZN), pushing the Mag 7 to a new all-time high. Strength was also seen in retail, consumer, transports, and autos, while healthcare, utilities, energy, regional banks, and capital goods lagged.
Overnight, Asian markets were mostly higher (Taiwan and South Korea led on semi strength), and Europe is up ~1.5%. Treasuries flat to slightly weaker, with markets still pricing in ~60 bp of rate cuts in 2025. Dollar index -0.1%, gold +0.5%, Bitcoin -0.1%, WTI crude +0.4%.
Tariff carve-outs announced Wednesday afternoon underpin sentiment, with President Trump’s semi tariffs exempting companies investing in the U.S. Major partners like the EU, Japan, and South Korea continue to push for broader exemptions. Dovish Fedspeak continues to support risk sentiment. Trump also signaled a temporary Fed governor appointment to replace Kugler while weighing Powell’s successor.
Today’s data: Preliminary Q2 productivity, nonfarm labor costs, initial claims, and NY Fed inflation expectations. Fed’s Bostic speaks today. Also on tap: a $25B 30-year bond auction, following weak 3- and 10-year auctions earlier this week.
Next week’s focus shifts to inflation and consumer data, including July CPI (Tuesday), PPI (Thursday), and retail sales and U. Mich sentiment (Friday).
Corporate Highlights
- AAPL: Confirmed $100B additional U.S. investment, raising total to $600B.
- APP –: Beat and raised, but stock down amid muted reaction to self-serve ad product launch.
- DASH +: Positive trends in order volume and user frequency.
- ABNB: Highlighted demand strength; margins under scrutiny due to higher investment and tougher comps.
- FTNT –: Dropped on weak product refresh update and services miss.
- DUOL +: Strong sub adds and ARPU gains.
- ZG +: Executing well in a tough housing market.
- PAYC +: Beat and raised FY guide; AI product launch well received.
- LYFT: Q2 and Q3 guidance largely in line.
- COST: Strong July comps.
- BROS +: Beat and raised; cited traction from strategic initiatives.
- ELF –: Fell on disappointing 1H guidance.
- MODG +: Big EBITDA beat; Topgolf traffic improving.
- JACK –: Missed and guided down.
- MCK +: Beat and raised FY, though Pharma segment only in line.
- EXAS –: Beat and raised, but stock pressured by weak CRC blood data.
- CTVA +: Beat and raised; volume and margin improvements noted.
- NTR +: Beat on potash and nitrogen strength.
- CF –: Missed; investor focus on operational impacts.
U.S. equities closed higher on Wednesday (Dow +0.18%, S&P 500 +0.73%, Nasdaq +1.21%, Russell 2000 -0.20%), with large-cap tech leading gains and the cap-weighted S&P outperforming the equal-weight index by ~90 bp. Sentiment was supported by strength in big tech (AAPL, TSLA, META), positive earnings surprises, and a rotation into consumer discretionary and staples stocks. Meanwhile, small caps, regional banks, and biotech lagged.
Despite the rally, there were few directional macro catalysts. Fed commentary leaned dovish again, with Minneapolis Fed President Kashkari suggesting the central bank must respond to signs of a slowing economy. Earlier in the day, Fed Governor Cook and Boston Fed President Collins offered little new on policy, though Cook flagged that July’s payroll revisions could indicate an inflection point. The 10-year Treasury auction tailed by 1.1 bp and had weaker demand than the prior sale, contributing to curve steepening with long-end yields up 2–4 bp. The dollar index fell 0.6%, gold was flat, Bitcoin rose 1.4%, and WTI crude declined 1.2% for a fifth consecutive daily loss.
On the trade front, President Trump imposed an additional 25% tariff on Indian imports, bringing total tariffs to 50%, citing India’s energy ties to Russia. Separately, Switzerland’s president left D.C. without securing a trade deal. Investors also continued to digest the July ISM Services miss, as well as ongoing discussion about stagflation risks, tariff-driven cost pressures, and structural upward pressure on long-end yields. However, bullish sentiment remains supported by strong earnings, AI-related tailwinds, buybacks, and M&A activity.
With ~80% of the S&P 500 having reported, the blended Q2 earnings growth rate now stands at 10.5% vs. 4.9% expected at the start of earnings season. Around 82% of companies have beaten expectations, with an average earnings surprise of nearly 8%.
Sector Summary
Information Technology (S&P +1.34%)
- ANET +17.5%: Beat and raised; strength in AI demand, enterprise traction, 50%+ product billings growth.
- ALAB +28.7%: Strong Q2 results and Q3 guidance; volume production of Scorpio fabric switches noted.
- AMD -6.4%: Q2 in line on EPS; Data Center growth only met expectations amid China chip export limits; high expectations and MI chip ramp seen as Q3 catalyst.
- KVYO +15.0%: Beat and raised FY guide; strong enterprise demand and net new customer growth.
- TOST -3.7%: Beat and raised guidance; caution on rich valuation and 2H margin headwinds.
- U -6.0%: Beat across all metrics; guidance roughly in line, but stock faced high expectations.
Communication Services (S&P +0.72%)
- META +: Participated in big tech rally.
- SNAP -17.2%: Miss and weak guide; flagged ad pricing issues and share loss.
- MTCH +10.5%: Revenue and FCF beat; user gains at Hinge and Asia offset Tinder weakness.
- NYT +15.5%: Beat across EPS, subscriptions, and advertising; guided Q3 subscription growth of 13–16%.
- DIS -2.7%: Beat on EPS but missed on revenue; Disney+ subs up but ARPU light. ESPN to acquire NFL media assets in exchange for 10% stake.
Consumer Discretionary (S&P +2.51%)
- SHOP +22.0%: Beat and raised guidance; GMV and sales growth strong across geographies.
- CPRI +14.5%: Beat on revenue and EPS; raised FY sales outlook, reaffirmed EPS.
- MCD +3.0%: Strong comps (+3.8%) and EPS beat; positive commentary on menu innovation and value.
- FUN -20.8%: Missed due to weather impact on park attendance; CEO stepping down.
Consumer Staples (S&P +1.73%)
- GO +42.7%: Beat on EPS; takeaways positive on restructuring traction.
- PRGO -11.3%: Missed across key metrics; flagged consumer headwinds in U.S. and EU.
Health Care (S&P -1.52%)
- AMGN -5.1%: Beat, raised FY EPS, but margin concerns weighed due to rising R&D costs.
- HALO +2.4%: Beat and raised guidance; strength in royalty business.
- HIMS –: Continued pressure from GLP-1 uncertainty.
- LNTH -28.6%: Missed and lowered FY guidance; surprising weakness in PYLARIFY.
- BBIO -8.9%: Revenue beat, but Attruby sales weak due to rebates and free drug trials.
- CRL -10.3%: Beat and raised FY guide, but lower-quality beat and weak bookings weighed.
Financials (S&P +0.48%)
- GPN +9.1%: Beat on EPS, margins improved; $500M buyback announced.
- COR -2.9%: Beat on EPS; miss in international EBIT dragged.
Industrials (S&P +0.06%)
- EMR -4.7%: Missed on revenue; margin weakness and reduced FY growth guide.
- ROK +: Beat and raised low end of FY guide; flagged some investment delays.
Materials (S&P -0.79%)
- MOS -13.3%: Big EPS miss; weaker volumes across all segments, but FY guide improved.
- OC +4.9%: Beat on revenue and EBITDA; roofing strong, but noted residential softness.
Energy (S&P -0.91%)
- LCID -9.7%: Missed EPS, lowered production outlook; $54M tariff-related costs reported.
Utilities (S&P -0.90%)
- No major headlines; sector lagged on higher long-end yields.
Real Estate (S&P -0.82%)
- Sector underperformed amid higher yields and rotation into tech and consumer names.
Eco Data Releases | Thursday August 7th, 2025
S&P 500 Constituent Earnings Announcements | Thursday August 7th, 2025
Data sourced from FactSet Research Systems Inc.
