The S&P 500 Index ($SPX) (SPY) Thursday closed down -0.37%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.74%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.55%.  September E-mini S&P futures (ESU25) fell -0.43%, and September E-mini Nasdaq futures (NQU25) fell -0.60%.

Inventory indexes gave up an early advance on Thursday and settled decrease, with the Dow Jones Industrials falling to a 2-week low.  ARM Holdings Plc plunged greater than -13% to weigh on chip shares after the corporate forecast Q2 adjusted EPS beneath the consensus.  Additionally, pharmaceutical firms retreated Thursday to weigh on the general market after President Trump despatched letters to 17 drug makers, demanding they slash drug costs. 

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Shares on Thursday initially moved larger, with the S&P 500 and Nasdaq 100 posting new file highs.  Stellar earnings outcomes from Microsoft and Meta Platforms lifted the broader market early Thursday after they boosted their capital spending plans and pledged to proceed investing in synthetic intelligence.  

Thursday’s financial information was blended for shares as studies confirmed a resilient labor market, though shopper spending was weaker than anticipated and worth pressures and labor prices remained sticky.

US weekly preliminary unemployment claims rose +1,000 to 218,000, displaying a stronger labor market than expectations of 224,000.

US Jun private spending rose +0.3% m/m, weaker than expectations of +0.4% m/m.  Jun private revenue rose +0.3% m/m, stronger than expectations of +0.2% m/m.

The US Jun core PCE worth index, the Fed’s most popular inflation gauge, rose +2.8% y/y, stronger than expectations of +2.7% y/y.

The US Q2 employment price index rose +0.9%, stronger than expectations of +0.8%.

The US Jul MNI Chicago PMI rose +6.7 to a four-month excessive 47.1, stronger than expectations of 42.0.

Within the newest tariff information, President Trump stated Thursday that he’ll impose a tariff price of 15% on imports from South Korea and {that a} take care of Taiwan was additionally being drafted as the 2 international locations reached “a certain degree of consensus.” As well as, commerce offers are within the offing for Thailand and Cambodia after they agreed to a ceasefire.  Lastly, President Trump prolonged Mexico’s present tariff charges for 90 days to permit extra time for commerce negotiations.

The markets this week will deal with any information of latest commerce offers earlier than Friday’s deadline.  On Friday, Jul nonfarm payrolls are anticipated to extend by +109,000, and the Jul unemployment price is anticipated to rise by +0.1 to 4.2%.  Additionally, Jul common hourly earnings are anticipated +0.3% m/m and +3.8% y/y. As well as, the Jul ISM manufacturing index is anticipated to extend by +0.2 to 49.5.  Lastly, the College of Michigan Jul shopper sentiment index is anticipated to be unrevised at 61.8. 

The markets are awaiting President Trump’s August 1 deadline for commerce offers to keep away from excessive tariffs.  On July 16, Mr. Trump introduced that he intends to ship a tariff letter to greater than 150 international locations, notifying them that their tariff charges may very well be 10% or 15%, efficient August 1.  As an replace, Mr. Trump final Wednesday stated, “We’ll have a straight, simple tariff of anywhere between 15% and 50%,” a sign that the ground for tariffs is rising and suggesting that he wouldn’t go beneath 15%. 

Federal funds futures costs are discounting the probabilities for a -25 bp price reduce at 42% on the September 16-17 FOMC assembly and 36% on the following assembly on October 28-29.

This week kicks off the earnings season’s busiest week, with 38% of the shares within the S&P 500 reporting quarterly earnings, double the quantity reported final week. The earnings outcomes of Magnificent Seven members shall be entrance and heart, with Apple and Amazon.com reporting after right this moment’s closing.  Early outcomes present that S&P 500 earnings are on observe to rise +4.5% for the second quarter, higher than the pre-season expectations of +2.8% y/y, in accordance with Bloomberg Intelligence.  With over 55% of S&P 500 corporations having reported, round 82% exceeded revenue estimates. 

Abroad inventory markets on Thursday settled blended.  The Euro Stoxx 50 fell from a 2.5-week excessive and closed down -1.36%.  China’s Shanghai Composite slid to a 1-week low and closed down -1.18%.  Japan’s Nikkei Inventory 225 closed up +1.02%.

Curiosity Charges

September 10-year T-notes (ZNU25) Thursday closed up +2 ticks.  The ten-year T-note yield fell -0.6 bp to 4.365%.  T-notes posted modest positive aspects on Thursday as a consequence of some optimistic carryover from a rally in 10-year UK gilts to a 3.5-week excessive.  Additionally, falling inflation expectations had been supportive for T-notes after the 10-year breakeven inflation price fell to a 1-week low Thursday of two.381%.  As well as, month-end shopping for of longer-term authorities debt securities by bond fund managers to increase period and stability their bond portfolios was supportive for T-notes. 

T-notes fell again from their finest ranges after weekly jobless claims rose lower than anticipated, and the Q2 employment price index and the Jun core PCE worth index, the Fed’s most popular inflation gauge, rose greater than anticipated, hawkish components for Fed coverage.  As well as, T-notes have some detrimental carryover from Wednesday when Fed Chair Powell dampened hypothesis of a Fed price reduce in September when he stated that with inflation dangers from tariffs, the present modestly restrictive coverage stance is acceptable.

European authorities bond yields right this moment are transferring decrease.  The ten-year German bund yield is down -1.0 bp to 2.695%.  The ten-year UK gilt yield fell to a 3.5-week low of 4.557% and is down -3.5 bp to 4.567%.

The Eurozone Jun employment price remained unchanged at a file low of 6.2%, displaying a stronger labor market than expectations of a +0.1 level improve to six.3%.

The German Jul unemployment change rose by +2,000, displaying a stronger labor market than expectations of +15,000.

German Jul CPI (EU harmonized) eased to +1.8% y/y from +2.0% y/y in Jun, weaker than expectations of +1.9% y/y and the slowest tempo of improve in 10 months.

Swaps are discounting the probabilities at 10% for a -25 bp price reduce by the ECB on the September 11 coverage assembly.

US Inventory Movers

ARM Holdings Plc (ARM) closed down greater than -13% to guide losers within the Nasdaq 100 and lead chip shares decrease after forecasting Q2 adjusted EPS of 29 cents-37 cents, the midpoint beneath the consensus of 35 cents.  Additionally, GlobalFoundries (GFS) closed down greater than -5%, and KLA Corp (KLAC), Utilized Supplies (AMAT), Micron Expertise (MU), and Texas Devices (TXN) closed down greater than -4%.  As well as, Microchip Expertise (MCHP), ASML Holding NV (ASML), and NXP Semiconductors NV (NXPI) closed down greater than -3%.

Pharmaceutical firms retreated Thursday to weigh on the general market after President Trump despatched letters to 17 drug makers, demanding they slash drug costs. Because of this, Bristol-Myers Squibb (BMY) closed down greater than -5% and Merck & Co (MRK) closed down greater than -4%.  Additionally, Eli Lilly (LLY) closed down greater than -3%, and Pfizer (PFE), Amgen (AMGN), Gilead Sciences (GILD), and Vertex Prescription drugs (VRTX) closed down greater than -2%. 

Align Expertise (ALGN) closed down greater than -36% to guide losers within the S&P 500 after reporting Q2 web income of $1.01 billion, weaker than the consensus of $1.06 billion, and forecasting Q3 web income of $965 million-$985 million, properly beneath the consensus of $1.04 billion. 

Baxter Worldwide (BAX) closed down greater than -22% after reporting Q2 gross sales from persevering with operations of $2.81 billion, beneath the consensus of $2.82 billion, and reduce its full-year adjusted EPS forecast to $2.42-$2.52 from a earlier forecast of $2.47-$2.55.

Worldwide Paper (IP) closed down greater than -12% after reporting Q2 adjusted working EPS of 20 cents, properly beneath the consensus of 40 cents.

Qualcomm (QCOM) closed down greater than -7% after reporting Q3 handset income of $6.33 billion, beneath the consensus of $6.48 billion.

UnitedHealth Group (UNH) closed down greater than -6% to guide losers within the Dow Jones Industrials after Baird downgraded the inventory to underperform from impartial with a worth goal of $198.

Lam Analysis (LRCX) closed down greater than -4% after the corporate stated it expects Q1 income to ease from current-quarter ranges, with Chinese language clients probably scaling again after a spending spree. 

Meta Platforms (META) closed up greater than +11% to guide gainers within the Nasdaq 100 after reporting Q2 income of $47.53 billion, properly above the consensus of $44.83 billion and raised its capital expenditure estimate to $66 billion-$72 billion from a earlier estimate of $64 billion-$72 billion, the midpoint above the consensus of $67.79 billion. 

EBay (EBAY) closed up greater than +18% to guide gainers within the S&P 500 after reporting Q2 web income of $2.73 billion, higher than the consensus of $2.64 billion, and forecasting Q3 web income of $2.69 billion-$2.74 billion, stronger than the consensus of $2.65 billion. 

CH Robinson Worldwide (CHRW) closed up greater than +18% after reporting Q2 adjusted EPS of $1.29, stronger than the consensus of $1.16, and after Baird upgraded the inventory to outperform from impartial with a worth goal of $135.

Carvana (CVNA) closed up greater than +17% after reporting Q2 income of $4,84 billion, properly above the consensus of $4.57 billion. 

Western Digital (WDC) closed up greater than +10% after reporting This fall adjusted EPS of $1.66, above the consensus of $1.48, and forecast Q1 adjusted EPS of $1.39-$1.69, the midpoint above the consensus of $1.42. 

Norwegian Cruise Line Holdings (NCLH) closed up greater than +9% after reporting Q2 adjusted Ebitda of $694.0 million, higher than the consensus of $671.1 million, and raised its full-year occupancy forecast to 103% from 102.5%, above the consensus of 102.6%. 

Huntington Ingalls Industries (HII) closed up greater than +7% after reporting Q2 EPS of $3.86, properly above the consensus of $3.23.

Microsoft (MSFT) closed up greater than +3% to guide gainers within the Dow Jones Industrials after reporting This fall income of $76.44 billion, stronger than the consensus of $73.89 billion. 

Earnings Experiences (8/1/2025)

Cboe World Markets Inc (CBOE), Chevron Corp (CVX), Church & Dwight Co Inc (CHD), Colgate-Palmolive Co (CL), Dominion Power Inc (D), Exxon Mobil Corp (XOM), Franklin Sources Inc (BEN), Kimberly-Clark Corp (KMB), Linde PLC (LIN), LyondellBasell Industries NV (LYB), Moderna Inc (MRNA), Regeneron Prescription drugs Inc (REGN), T Rowe Value Group Inc (TROW), WW Grainger Inc (GWW).

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