S&P 500 and Nasdaq hit record highs, lifted by Alphabet
Google-parent Alphabet rallied over 2 per cent ahead of its quarterly report on Wednesday. It and Tesla, also reporting on Wednesday, kick off earnings from the so-called "Magnificent Seven", and their results may set the tone for other heavyweight companies reporting in the next several days.
Tesla traded near flat, while Apple and Amazon each rose about 1 per cent.
Verizon rallied 5 per cent after the telecommunications company boosted its annual profit forecast.
Analysts on average expected S&P 500 companies to report a 6.7 per cent increase in earnings for the second quarter, with Big Tech driving much of that gain, according to LSEG I/B/E/S.
"So far, companies that have reported have, in general, met or beat guidance from the prior quarter, and we haven't seen any degradation either in corporate profits or consumer spending," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis.
With U.S. President Donald Trump's August 1 tariff deadline approaching, the S&P 500 is up about 8 per cent year to date, with investors betting the economic damage from tariffs will be less than feared.
U.S. Commerce Secretary Howard Lutnick said on Sunday he was confident the United States could secure a trade deal with the European Union, even as EU members explored possible counter-measures against the United States.
Trump has threatened 30 per cent tariffs on imports from Mexico and the EU, and sent letters to other trading partners, including Canada, Japan and Brazil, setting tariffs ranging from 20 per cent to 50 per cent.
The S&P 500 was up 0.56 per cent at 6,332.05 points.
The Nasdaq gained 0.73 per cent to 21,048.31 points, while the Dow Jones Industrial Average was up 0.49 per cent at 44,560.36 points.
Nine of the 11 S&P 500 sector indexes rose, led by communication services, up 1.93 per cent, followed by a 1.27 per cent gain in materials.
Investors focused on how tariff uncertainty is impacting the U.S. economy will scrutinize jobless claims data and the July business activity report, expected on Thursday.
They will also watch a speech by Federal Reserve Chair Jerome Powell on Tuesday for clues about when the Fed might cut interest rates, especially after mixed inflation signals last week.
Traders have largely ruled out a July rate cut, and they now see a greater than 50 per cent chance the Fed will cut by its September meeting, according to CME Group's FedWatch tool.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.7-to-one ratio.
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CNA
28 minutes ago
- CNA
US dollar gains, but set for weekly drop as Fed, BOJ in focus
LONDON/NEW YORK :The U.S. dollar advanced on Friday, bolstered by solid economic data that suggested the Federal Reserve was justified in taking a patient approach to cutting interest rates, while tariff negotiations showed more clarity. "The dollar regained some ground the past two days, after being on the defensive earlier in the week ... supported mostly by an encouraging set of U.S. economic data that argues for continued patience at the Fed," said Elias Haddad, senior markets strategist at Brown Brothers Harriman in London. The U.S. currency, however, showed little reaction to data showing new orders for key U.S.-manufactured capital goods unexpectedly fell in June while shipments of those products increased moderately. That suggested business spending on equipment slowed considerably in the second quarter. The greenback was set for its biggest weekly drop in a month, ahead of more tariff dialogue and central bank meetings next week, while sterling dipped after softer-than-expected British retail sales data. Both the Fed and the Bank of Japan are expected to hold rates steady at next week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next moves. Politics is a factor for both central banks, most dramatically in the U.S., where President Donald Trump once again pressed for lower interest rates on Thursday as he locked horns with Fed Chair Jerome Powell. Brown Brothers' Haddad said the Fed's monetary policy is being "overshadowed by the political pressure to lower interest rates. That's one of the reasons why I think the dollar's upside is limited." The dollar managed to recover a touch against the euro late on Thursday, however, after Trump said he did not intend to fire Powell, as he has frequently suggested he could. "The market relief was based on the fact that Trump refrained from calling for Powell to go, although that was based on Trump's view that Powell would 'do the right thing'," said Derek Halpenny, head of EMEA research at MUFG. He added, however, that "the theme of Fed independence being undermined by the White House will unlikely go away and remains a downside risk for the dollar." BOJ MEETING Falls against the euro and yen leave the dollar index, which measures the dollar against six other currencies, at 97.45, on track for a drop of 0.75 per cent this week, its weakest performance in a month, though it bounced back 0.3 per cent on Friday. Meanwhile, in Japan, though the trade deal signed with the U.S. this week could make it easier for the BOJ to continue rate hikes, the bruising loss for Prime Minister Shigeru Ishiba's coalition in upper house elections on Sunday complicates life for the BOJ. The yen was softer, thanks in part to below-expectations Tokyo inflation data, with the dollar last up 0.5 per cent at 147.66 yen, though on course for a weekly 0.7 per cent fall. The euro was down 0.2 per cent at $1.1728 but set for a weekly gain of 0.8 per cent. The common currency took some support Thursday from the European Central Bank meeting. Policymakers left the policy rate at 2 per cent, as expected, but the bank's relatively upbeat assessment of the economic outlook and signs that an EU-U.S. trade deal is near caused investors to reassess previous assumptions of one more rate cut this year. [GVD/EUR] In contrast, soft British data is supporting expectations of more Bank of England rate cuts, and causing euro zone bond yields to rise faster than British ones, supporting the euro against the pound. [GB/] The euro rose as much as 0.23 per cent on sterling to 87.27 pence on Friday, its highest since April, building on a 0.44 per cent gain the previous day. Data on Friday showed British retail sales data for June slightly below analysts' expectations, albeit rebounding from a sharp drop in May, after figures on Thursday showed business activity grew only weakly in July and employers cut jobs at the fastest pace in five months. The pound was last down 0.6 per cent on the dollar at $1.3434. Currency bid prices at 25 July 2:57 p.m. GMT Descript RIC Last U.S. Pct YTD High Low ion Close Chang Pct Bid Bid Previous e Session Dollar 97.74 97.451 0.31 per cent -9.91 per cent 97.906 97. index 426 Euro/Dol 1.1729 1.1748 -0.16 13.29 per cent $1.176 $1. lar per cent 1 170 4 Dollar/Y 147.7 146.915 0.48 per cent -6.18 per cent 147.89 146 en 5 .84 Euro/Yen 173.22 172.67 0.32 per cent 6.13 per cent 173.61 172 .52 Dollar/S 0.7967 0.7954 0.16 per cent -12.21 0.7979 0.7 wiss per cent 949 Sterling 1.3431 1.3512 -0.58 7.4 per cent $1.351 $1. /Dollar per cent 341 7 Dollar/C 1.3704 1.3637 0.5 per cent -4.69 per cent 1.3712 1.3 anadian 639 Aussie/D 0.6559 0.6591 -0.47 6.01 per cent $0.659 $0. ollar per cent 9 655 3 Euro/Swi 0.9343 0.9341 0.02 per cent -0.54 per cent 0.9354 0.9 ss 335 Euro/Ste 0.873 0.8693 0.43 per cent 5.52 per cent 0.8733 0.8 rling 691 NZ 0.6007 0.6029 -0.36 7.36 per cent $0.603 0.6 Dollar/D per cent 7 ollar Dollar/N 10.1591 10.1237 0.35 per cent -10.62 10.173 10. orway per cent 3 115 9 Euro/Nor 11.9164 11.889 0.23 per cent 1.25 per cent 11.938 11. way 886 Dollar/S 9.5212 9.528 -0.07 -13.58 9.5555 9.5 weden per cent per cent 174 Euro/Swe 11.1719 11.2135 -0.37 -2.57 per cent 11.215 11. den per cent 5 166
CNA
an hour ago
- CNA
Wall Street, dollar firms ahead of a big week for market risk
NEW YORK :Wall Street and the dollar firmed on Friday as investors girded themselves for the week ahead, which includes a Federal Reserve policy meeting, crucial corporate results and U.S. President Donald Trump's August 1 deadline for negotiating trade deals. "Some deals will be done and talks will continue, and Trump may push out the deadline further," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "Trump's process is to shock and then be reasonable in terms of tariffs." All three indexes were modestly green in early trading, and were on course for weekly gains. Gold lost some shine, pressured by the dollar as healthy risk appetites lured investors away from the safe-haven metal. With Trump's negotiating deadline just a week away, the U.S. and its trading partners are scrambling to reach trade agreements, with European negotiators heartened by the deal with Japan announced on Tuesday. Intel's shares INTC.O dropped 8.8 per cent after the chipmaker forecast steeper-than-expected quarterly losses and said it had halted or scrapped new factory projects in the U.S. and Europe. More than a third of the companies in the S&P 500 have posted results, 80 per cent of which have beaten estimates, according to LSEG data. Analysts now expect year-on-year second-quarter earnings growth of 7.7 per cent, compared with the 5.8 per cent estimate as of July 1. Four members of the Magnificent 7 group of Artificial Intelligence-related megacap stocks - Amazon, Apple, Meta and Microsoft are on next week's earnings docket, and market participants will scrutinize the companies' conference calls for signs that AI expenditures are beginning to pay off and whether tariff-related uncertainties continue to weigh on forward guidance. U.S. economic data released on Friday showed an unexpected decline in new orders for core capital goods, as companies hold back on big ticket purchases amid the fog of ongoing trade talks. The Fed is expected to convene next week for its two-day monetary policy meeting, which is expected to culminate in a decision to let its federal funds target rate stand in the 4.25 per cent to 4.50 per cent range. The meeting comes at a moment in which Fed Chair Jerome Powell is facing criticism from Trump for not cutting rates. "I don't expect Powell to change what he does, nor should he," Ghriskey added. "The idea of lower interest rates should scare us because Fed has had this huge job of bringing down inflation, and to ease rates at this point is clearly going to be inflationary." The Dow Jones Industrial Average rose 113.54 points, or 0.25 per cent, to 44,806.30, the S&P 500 rose 16.19 points, or 0.26 per cent, to 6,379.67 and the Nasdaq Composite rose 44.40 points, or 0.21 per cent, to 21,102.36. European shares gave back some of the previous session's gains as market participants parsed mixed corporate earnings and awaited developments in the U.S.-EU trade negotiations. MSCI's gauge of stocks across the globe fell 1.01 points, or 0.11 per cent, to 940.34. The pan-European STOXX 600 index fell 0.29 per cent, while Europe's broad FTSEurofirst 300 index fell 5.34 points, or 0.24 per cent. Emerging market stocks fell 10.36 points, or 0.82 per cent, to 1,256.93. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.95 per cent, to 661.07, while Japan's Nikkei fell 370.11 points, or 0.88 per cent, to 41,456.23. U.S. Treasury yields drifted higher in a subdued trading as investors braced for a data-heavy week, updates on U.S. trade talks, and a Federal Reserve policy meeting. The yield on benchmark U.S. 10-year notes rose 0.2 basis points to 4.41 per cent, from 4.408 per cent late on Thursday. The 30-year bond yield rose 0.5 basis points to 4.9543 per cent from 4.949 per cent late on Thursday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 0.6 basis points to 3.919 per cent, from 3.925 per cent late on Thursday. The dollar gained strength but remained on course for its biggest drop in a month as investors focused on tariff negotiations and central bank meetings on the calendar for next week. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.28 per cent to 97.72, with the euro down 0.2 per cent at $1.173. Against the Japanese yen, the dollar strengthened 0.4 per cent to 147.57. In cryptocurrencies, bitcoin fell 3.08 per cent to $115,133.22. Ethereum declined 2.63 per cent to $3,641.43. Oil prices softened as investors mulled the global demand outlook and a potential supply increase from Venezuela. U.S. crude fell 0.56 per cent to $65.63 a barrel and Brent fell to $68.91 per barrel, down 0.39 per cent on the day. Gold prices dropped in opposition to the firming dollar, amid growing optimism surrounding U.S.-EU trade talks.
CNA
2 hours ago
- CNA
Intel slumps as potential foundry exit deepens investor gloom
Intel shares sank 8 per cent on Friday after the company warned of exiting chip manufacturing if it fails to secure a major customer, a potentially drastic move by the new CEO to cut spending and revive the struggling American icon. Lip-Bu Tan said on Thursday he would further shrink Intel's workforce, halt work on two plants in Europe and slow another in Ohio, binning his ousted predecessor's strategy that relied on building costly facilities to restore its manufacturing edge. The plan for such extreme measures follows a surprise second-quarter adjusted loss and a forecast for a bigger-than-expected loss in the third quarter. The weakening financials pointed to more trouble for Intel after years of mismanagement eroded its PC and datacenter market share and left it with almost no presence in the AI market. The disclosures "revive long-unanswered questions on the chances of success for its foundry business the path forward is if Intel does not develop leading edge manufacturing capability," TD Cowen analyst Joshua Buchalter said. "It's hard to understate the significance of this potential outcome in the context of the history of the semiconductor industry." As part of its new strategy, Intel may reserve the advanced 18A manufacturing process for its products and proceed with its next-generation 14A only if it lands a major external customer commits, Tan told analysts on the post-earnings call. The move could put $100 billion in assets at risk and deepen its dependence on rival TSMC, adding strain to margins already running at about half their historical highs. "Intel Foundry is a big story and currently people are questioning how successful 18A is. A failure in 18A will be a broken story," said Hendi Susanto, portfolio manager at Gabelli Funds. Intel was set to lose nearly $8 billion in market value, if current losses hold. Its current valuation of around $100 billion is less than half of Advanced Micro Devices' more than $260 billion. The stock has lagged far behind rivals this year, rising 12.8 per cent compared with AI darling Nvidia's 30 per cent gain and AMD's 34 per cent. Intel trades at a 12-month forward price-to-earnings ratio of 42.55 versus 33.90 for Nvidia and 32.12 for AMD. Since taking the helm in March, Tan has divested businesses, laid off employees and redirected resources as part of his strategic reset to revive the embattled chipmaker.
