US Weekly Recap: Dow +1.26%, S&P +1.46%, Nasdaq +1.02%, Russell 2000 +0.94%

Friday, July 25, 2025 (GMT)

Underperformers: Consumer Spls. +0.01%, Tech +0.69%, Utilities +0.89%, Consumer Disc. +1.23%, Energy +1.40%

Overview:

US equities were stronger this week, with the S&P and Nasdaq both ending at fresh record highs. Big tech was a notable driver; retail-investor favorites were another area of strength. Other outperformers included MedTech, pharma/biotech, oil services, E&Cs, containerboard, building products, homebuilders, auto suppliers, apparel, and REITs. The week’s underperformers included commodity airlines, multis, media, restaurants, hospitals, credit cards, beverages, P&C insurance, chemicals, and semis. Overall, momentum and growth names were relative laggards.

Treasuries were mixed with the curve flattening; the 2Y yield rose ~4bp while the 30Y dropped ~7bp. The dollar was weaker on the major crosses; DXY (0.8%). Gold was slightly weaker, dropping 0.4% (after closing above $3,400 earlier in the week). WTI crude was down 1.3%.

What happened?:

Earnings were a major focus this week, with Q2 reports coming in from 112 S&P components. The season thus far has generally been exceeding expectations, with the blended y/y earnings growth rate for S&P 500 constituents coming in at 6.4%, better than the 4.9% expected on 30-Jun. However, the magnitude of those beats (averaging 6.1% above consensus) trails both the one- and five-year averages. Results were somewhat mixed on a more granular level. In the first round of Mag 7 earnings, GOOGL +4.4% was a notable gainer while TSLA (4.1%) disappointed. There were some standout earnings within homebuilders and some AI-linked names, but several consumer-facing names underwhelmed. There were also some stumbles in the semi space, particularly TXN (14.6%) and INTC (10.4%).

Trade headlines were largely focused on dealmaking ahead of Trump’s 1-Aug deadline. Bilateral deals were announced with Indonesia, the Philippines, and Japan (though later reporting suggested some disparate views on the deal’s details). There were also additional reports about the EU and US closing in a deal, alongside headlines that the EU has been preparing possible retaliatory steps should no deal be struck before the deadline. On China, Treasury Secretary Bessent said that country’s 12-Aug deadline will likely be extended when the parties meet in Stockholm next week.

It was fairly uneventful on other macro fronts. A lighter week of economic data saw June core durable-goods orders unexpectedly contract. July flash composite PMI was a bit stronger than consensus, though manufacturing was a drag. June new-home sales were lighter than forecast, as were existing-home sales. July’s Richmond Fed manufacturing index printed at its weakest level since last September. Elsewhere, there was some further dissipation of fears Trump might fire Fed Chair Powell after the president and his team paid a visit to view the central bank’s facility renovation.

Overall, stocks’ path of least resistance remained to the upside this week. The Q2 earnings season continues to come in ahead of expectations. Trade-deal announcements have been contributing to a sense of greater tariff clarity. The week’s economic data, such as it was, did not point to signs of significant stress. Concerns about political pressure on the Fed eased somewhat, and expectations remain that a rate cut may come by September at the latest. There were also several M&A headlines this week, possibly indicating greater corporate confidence.

But at the same time, analysts continue to note that the economy will be weathering a double-digit increase in the effective tariff rate this year; some inflation pressures have already been noted in economic releases and referenced in corporate commentary. Earnings have been solid, but there remains a long way to go, earnings beats are lagging in magnitude, and some management messaging has been leaning more cautious. And valuations remain very elevated as indices keep setting new record highs.

Earnings highlights:

Among the notable gainers, GOOGL +4.4% beat with revenue upside in Search, YouTube, and Cloud; takeaways focused on AI tailwind and higher capex. TMUS +7.2% saw solid service results and better wireless net adds. BX +5.6% beat on total AUM and fee-related earnings. TMO +15.3% organic growth beat, and the company boosted guidance. VZ +5.5% was mixed, but positives included strong results for consumer wireless equipment and raised guidance midpoints. GEV +12.2% results in Electrification and Gas were solid, and analysts were positive on AI power demand tailwinds. DHR +8.1% beat and raised with bioprocessing a bright spot.

Among the big earnings-linked decliners was TSLA (4.1%), which missed on FCF and saw Musk warning of difficult quarters ahead (but upbeat on robotaxi expansion). SAP (5.9%) guidance was seen as more cautious amid deal-cycle elongation and tariff uncertainty. PM (10.0%) US Zyn shipments disappointed. IBM (9.2%) earnings and revenue beat, though there were concerns about deceleration in organic software growth. ISRG (4.4%) beat but procedure growth was only in line. TXN (14.6%) Q3 guidance was mixed, with some note of elevated expectations. LMT (9.2%) missed, but on significant one-time charges. INTC (10.4%) results were ahead but some concerns about Foundry business and 14A push-out.

Coming next week:

There is a very busy macro week on tap, with Wednesday’s FOMC meeting one of the main events. Despite broad political pressure and hints at possible dissents, market expectations are very firm that rates will remain on hold. Elsewhere, Monday afternoon will see the release of US Treasury financing estimates for the coming quarter, while Wednesday morning brings Treasury’s quarterly refunding announcement.

The highlight of the economic calendar will be Friday’s July nonfarm payrolls reading (preceded by the June JOLTS report on Tuesday and July ADP private payrolls on Wednesday). Wednesday will also see the first read of Q2 GDP, followed on Thursday by June PCE. Also on the schedule will be Dallas Fed manufacturing (Monday), consumer confidence (Tuesday), pending-home sales (Wednesday), jobless claims (Thursday), and ISM manufacturing and final July UMich consumer sentiment (Friday).

Next week is also the peak of the Q2 earnings season, with 164 S&P constituents scheduled to report. Among these are four of the Mag 7 names: MSFT and META post-close Wednesday; AAPL and AMZN post-close Thursday.

And of course, 1-Aug is the deadline from Trump’s tariff letters, so it is possible there could be a flurry of headlines on bilateral deals. Bessent will be meeting Chinese negotiators in Stockholm on Monday and Tuesday; he has said while China has a 12-Aug deadline, that could be extended.

S&P 500 Sector Performance:

Outperformers: Healthcare +3.41%, Materials +2.35%, Industrials +2.27%, Real Estate +2.23%, Communication Svcs. +2.21%, Financials +1.67%

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The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices