Market Snapshot
| Dow | 44023.29 | -436.36 | (-0.98%) | | Nasdaq | 20677.80 | +37.47 | (0.18%) | | SP 500 | 6243.76 | -24.80 | (-0.40%) | | 10-yr Note |
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| | NYSE | Adv 547 | Dec 2208 | Vol 1.13 bln | | Nasdaq | Adv 1194 | Dec 3326 | Vol 8.43 bln |
Industry Watch
| Strong: Information Technology |
| | Weak: Financials, Utilities, Materials, Consumer Staples, Energy, Real Estate, Industrials, Consumer Discretionary |
Moving the Market
June CPI up 0.3% from May will likely keep the Fed in wait-and-see mode
Early strength in chipmakers as NVIDIA set to resume sale of H20 chip in China
Earnings reports of major banks
Rising interst rates
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Bearish action following June CPI
15-Jul-25 16:40 ET
Dow -436.36 at 44023.29, Nasdaq +37.47 at 20677.80, S&P -24.80 at 6243.76
[BRIEFING.COM] The stock market opened with strength amid news that NVIDIA (NVDA 170.55, +6.48, +4.0%) would resume the sale of its H20 chips in China, but rising interest rates following the June CPI report resulted in selling pressure that kept the S&P 500 and broader market on its heels for most of the session.
Supported by NVIDIA’s gain and strength in Advanced Micro Devices (AMD), which is also aiming to resume AI chip sales in China, the Nasdaq Composite closed at another record high.
The S&P 500 information technology sector (+1.3%) was the only sector to finish in the green today, as the news involving NVIDIA and AMD was bolstered by reports of heavy investment in AI data centers. Alphabet (GOOG 183.10, +0.29, +0.2%) and CoreWeave (CRWV 140.59, +8.22, +6.2%), for instance, both made AI infrastructure investment announcements.
The strength in chipmakers saw the PHLX Semiconductor Index finish with a gain of 1.3%.
The other ten S&P 500 sectors could not shake off the impact of rising interest rates following the 8:30 ET release of the June CPI.
Total CPI was up 0.3% month-over-month in June and core CPI, which excludes food and energy, was up 0.2%. The latter was lower than expected and contributed to the stock market's early strength (the S&P 500 briefly touched a new intraday high at 6302), but a closer look at the report revealed pockets of inflation in several areas that stirred concerns about tariff-driven inflation.
Apparel prices, for example, increased 0.4% after being down 0.4% in May, while household furnishings and supplies prices increased 1.0% following a 0.3% increase in May.
Ultimately, the report was not good enough to suppress concerns over tariff-related inflation, which in turn left the market thinking the Fed is going to remain in a wait-and-see mode.
The financials sector (-1.7%) finished near the bottom of today's action, with several major financial companies, such as JPMorgan Chase (JPM 286.55, -2.15, -0.7%) and BlackRock (BLK 1046.16, -65.30, -5.9%), facing some "sell the news" pressure despite surpassing earnings expectations. Citigroup (C 90.72, +3.22, +3.7%) was an exception to the upside. Wells Fargo (WFC 78.86, -4.57, -5.5%) was a downside outlier, disappointing with its net interest income guidance.
Today's losses were broad-based. Roughly 90% of S&P 500 stocks declined today. Although a few mega-cap tech names helped mask further losses, a lack of positive headlines kept the market in a bearish state following the June CPI report. The Russell 2000 declined 2.0%, the S&P Midcap 400 index dropped 1.8%, and the equal-weighted S&P 500 slumped 1.4%.
The Treasury market was not unscathed either. The 10-year note yield settled up six basis points at 4.49%.
U.S. Treasuries traded calmly overnight following the release of a trove of economic data out of China that featured a stronger-than-expected Q2 GDP print and June retail sales, fixed asset investment, and industrial production data that was mixed relative to expectations.
The calmness faded, however, after the release of the June CPI report at 8:30 a.m. ET. There was selling interest across the curve, rooted in the sticky inflation and the notion that the Fed will view today's report as a basis to continue with a wait-and-see policy mindset.
The probability of at least a 25 basis point rate cut to 4.00-4.25% at the September FOMC meeting slipped to 54.0%, versus 62.6% a day ago, according to the CME FedWatch Tool. The dollar rallied after the report, mirroring the notion that rates may be sticking higher for longer. The U.S. Dollar Index was up 0.6% to 98.64.
Boston Fed President Susan Collins (voting FOMC member) echoed an “actively patient” approach to monetary policy in a speech today.
Approaching session lows
15-Jul-25 15:30 ET
Dow -368.25 at 44091.40, Nasdaq +66.60 at 20706.93, S&P -14.90 at 6253.66
[BRIEFING.COM] The major averages now trade near their session lows, with the S&P 500 now down 0.2%.
The House will hold another procedural vote on crypto bills later this evening, and they are also discussing splitting up crypto bills to make them easier to pass as well, according to CNBC.
Boston Fed President Susan Collins (voting FOMC member) stated in a speech titled "Using Data in Monetary Policymaking: A View from the Fed" that she expects tariffs to boost inflation over the second half of the year, though the extent of the increase remains uncertain. Collins expressed that an "actively patient" approach to monetary policy remains appropriate.
Major averages little changed by Indonesia deal
15-Jul-25 15:00 ET
Dow -383.02 at 44076.63, Nasdaq +85.74 at 20726.07, S&P -13.20 at 6255.36
[BRIEFING.COM] The S&P 500 continues to hover near its unchanged level heading into the final hour of the session.
President Trump confirmed the details of a trade deal with Indonesia via Truth Social, in which Indonesia will purchase $15 billion in U.S. energy, $4.5 billion in American agricultural products, and 50 Boeing (BA 231.85, +1.34, +0.6%) jets.
Additionally, Indonesia will pay a 19% tariff on exports to the U.S., while U.S. exports to Indonesia are to be tariff and non-tariff barrier free.
The major averages are little changed following the announcement, instead keeping in line with today's trend of strength in the technology sector (+1.6%) and weakness in most other areas, with rising interest rates acting as a headwind.
Separately, crypto-related stocks have come under some pressure with news of the House procedural vote on cryptocurrency legislation failing by a vote of 196-222.
S&P 500 slips slightly as SMCI, First Solar lead; State Street tumbles on expense miss
15-Jul-25 14:30 ET
Dow -316.58 at 44143.07, Nasdaq +143.91 at 20784.24, S&P -1.53 at 6267.03
[BRIEFING.COM] The S&P 500 (-0.02%) is comfortably in second place, down less than two points on the day.
Briefly, S&P 500 constituents Super Micro Computer (SMCI 53.72, +3.99, +8.02%), First Solar (FSLR 170.31, +9.47, +5.89%), and AES Corp. (AES 13.02, +0.44, +3.50%) dot the top of the standings. SMCI benefits from news that NVIDIA (NVDA 170.91, +6.84, +4.17%) will resume AI chip sales to China, while FSLR rallies on positive sell side commentary.
Meanwhile, State Street (STT 102.84, -7.19, -6.53%) is today's worst laggard after higher-than-expected expenses, a decline in net interest income, and no guidance boost overshadowed its earnings and revenue beat.
Gold falls as hot inflation data delays Fed cut hopes, lifts dollar
15-Jul-25 14:00 ET
Dow -335.92 at 44123.73, Nasdaq +135.97 at 20776.30, S&P -3.67 at 6264.89
[BRIEFING.COM] With about two hours to go on Tuesday the tech-heavy Nasdaq Composite (+0.66%) is decently in front among the major averages, up 135 points.
Gold futures settled $22.40 lower (-0.7%) at $3,336.70/oz, as stronger-than-expected U.S. inflation data reinforced expectations that the Fed will delay rate cuts, boosting the dollar and pressuring the yellow metal. Traders also remained cautious ahead of Wednesday's PPI report and amid ongoing U.S. tariff threats, keeping gold under pressure despite its safe-haven appeal.
Meanwhile, the U.S. Dollar Index is now up +0.6% to $98.68.
Albertsons sharply lower today following narrower-than-usual EPS beat (ACI)
Albertsons (ACI -5%) is trading sharply lower today after reporting its Q1 (May) results. The grocery store giant reported revenue growth of 2.5% yr/yr to $24.89 bln, which was a slight beat and was driven by a healthy increase in identical sales growth of +2.8%. The company beat by only a penny on the EPS line. Besides a rare miss in Q1 of last year, this was its most narrow EPS beat in over five years. On the positive side, ACI raised its guidance for identical sales growth to +2.00-2.75% from +1.50-2.50%.
- Revenue in Q1 continues to remain strong for ACI, which can be attributed to strong identical sales growth driven by its digital platforms. Two of its four platforms stand out above the rest. E-commerce grew 25% yr/yr and now totals 9% of total grocery revenue, while its pharmacy and health platform grew 20%.
- What stood out to us is that ACI raised identical sales guidance very early in its fiscal year. To do so is a sign of confidence for ACI. Typically, companies tend not to raise full year guidance this early to give them a little wiggle room in case the next quarter is weak. It feels its investments in its customer experience and digital growth platforms are driving sales.
- The increase in identical sales guidance can also be attributed to its productivity agenda, which helps fuel growth and offset inflationary headwinds, a main concern of its consumers. Management expects $1.5 bln in productivity savings through FY25-27.
- Despite the increase in FY25 identical sales guidance, management did caution that Q2 (Aug) identical sales could be towards the lower end of guidance, with gradual acceleration in 2H25.
- In terms of its competitive landscape, management is seeing continued promotional investment from competitors, while they are leaning more heavily on loyalty (grew 14% yr/yr) and personalized deals. However, ACI continues to see pressure from mass club stores like Costco (COST) and Walmart (WMT).
Despite reporting solid identical sales growth and raising its guidance, the stock is trading sharply lower today. We think the narrow beat on EPS is weighing more heavily on investors compared to the positives. Also, it sounds like ACI's mass club store competitors are being aggressive on lowering prices, so we wonder if that will affect ACI down the road.
NVIDIA's H20 chip sales to China set to resume, clearing major stock overhang (NVDA)
NVIDIA (NVDA) announced in an email to investors that it expects to resume sales of its H20 AI chip to China “soon,” marking a significant development after the U.S. government-imposed export controls in mid-April 2025, citing national security concerns. The H20 chip was specifically engineered for the Chinese market to comply with initial U.S. export restrictions implemented in 2022, which barred NVDA’s more advanced AI chips, such as the H100, from being sold in China. However, the Trump administration tightened these restrictions in April 2025, requiring export licenses for the H20 and any chips with equivalent memory bandwidth, effectively halting sales.
- This announcement, which has ignited a sharp rally in NVDA today, coincides with CEO Jensen Huang’s high-profile visits to Beijing and Washington. In Beijing, Huang met with senior Chinese officials and industry leaders to discuss AI’s benefits and NVDA’s commitment to the Chinese market, while in Washington, he engaged with President Donald Trump to reaffirm NVDA’s support for U.S. job creation and AI leadership.
- Huang’s use of the term “soon” suggests that H20 sales could resume in 3Q25, following assurances from the U.S. government that export licenses will be granted, likely facilitated by a recent U.S.-China trade framework that eased tech export curbs in exchange for China relaxing rare-earth export controls. This diplomatic progress, coupled with Huang’s strategic engagement, positions NVDA to swiftly re-enter the $50-$60 bln Chinese AI market.
- The halt of H20 chip sales in mid-April had a material impact on NVDA’s financials in 1Q25. The company recorded a $4.5 bln charge related to H20 inventory that could not be sold or repurposed, reflecting the abrupt nature of the export restrictions with “no grace period.” Additionally, NVDA was unable to ship $2.5 bln in H20 chips it had already produced, though it managed to book $4.6 bln in H20 sales to China before the controls took effect.
- Had the full $7.1 bln in H20 orders been fulfilled, these sales would have accounted for approximately 16% of NVDA's Q1 revenue of $44 bln. The company also projected an additional $8 bln in lost H20 sales for Q2, underscoring the significant financial toll of the restrictions and the importance of resuming sales to mitigate further losses.
- In the same announcement, Huang introduced the RTX PRO GPU, described as “fully compliant” with U.S. export controls and “ideal for digital twin AI for smart factories and logistics.” This chip targets China’s growing demand for AI applications in industrial automation, where digital twins -- virtual models of physical systems -- enable real-time optimization of manufacturing and supply chain processes. The RTX PRO’s focus on smart factories and logistics aligns with China’s push for Industry 4.0, potentially serving major players like ByteDance and Tencent, who are investing heavily in AI-driven operations.
- However, the RTX PRO’s reportedly inferior performance compared to the H20 may limit its competitiveness, and its lower price point, based on simpler manufacturing requirements, suggests it is unlikely to significantly offset the revenue potential of H20 sales.
NVDA’s expected resumption of H20 chip sales to China is a bullish turn of events, removing a key overhang that has weighed on the stock since April’s export restrictions. With the Chinese market open for business again, NVDA is well-positioned to recapture lost revenue and reinforce its dominance in AI chip technology.
JPMorgan Chase trading flat despite large EPS beat; consumer remains resilient (JPM)
JPMorgan Chase (JPM) is trading roughly flat following its Q2 earnings report this morning. The company reported another huge beat on EPS, its sixth consecutive EPS beat of at least $0.24 and third straight above $0.44. Revenue fell 10.5% yr/yr to $44.91 bln, which was a good bit better than expected. The decline was mostly due to a one-time gain related to Visa shares in the year ago period.
- Net interest income, excluding Markets, was $22.8 bln, was down 1%, driven by lower rates and deposit margin compression, predominantly offset by higher wholesale deposit balances and higher revolving balances in Card Services. Noninterest revenue, excluding Markets, was $14.0 bln, down 31%. Excluding the Visa gain, it up 8%.
- JPM noted that each of its lines of business performed well. In the CIB, Markets revenue rose to $8.9 bln as clients navigated volatile market conditions at the beginning of the quarter. Meanwhile, IB activity started slow but gained momentum as market sentiment improved. IB fees were up 7% for the quarter. In CCB, JPM added approximately 500,000 net new checking accounts, which drove sequential growth in checking account balances. In AWM, asset management fees rose 10%, and JPM saw continued client asset net inflows of $80 bln, with client assets crossing over $6.4 trillion.
- In terms of the macro picture, JPM said the US economy remained resilient in Q2. The finalization of tax reform and potential deregulation are positive. However, it also said significant risks persist, including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.
- The earnings call was generally positive, especially in terms of the macro picture. JPM said it continues to struggle to see signs of weakness in the consumer. The consumer basically seems to be fine now. Delinquency rates are also in line with expectations. JPM noted it kept net charge off guidance unchanged. Real consumer spending in 1H25 vs 2H24 is down but still positive.
The muted reaction in the stock, despite the huge EPS beat, tells us investors have become accustomed to large beats from JPM. The bank was quite positive on the consumer, a bit more optimistic than we had expected. However, JPM did express caution about the impact of tariffs on the US economy, geopolitics and rising fiscal deficits. We suspect that is offsetting some of the excitement about the good numbers.
Citigroup crushes Q2 expectations with robust growth across every segment (C)
Citigroup (C) delivered a strong 2Q25, easily surpassing EPS and revenue expectations while nudging its FY25 revenue guidance higher to approximately $84 bln from its prior forecast of $83.1-$84.1 bln. The 29% yr/yr EPS growth was driven by a 12% increase in net interest income, fueled by 5% loan growth to $725.3 bln and disciplined cost containment, with operating expenses rising just 2% to $13.6 bln, reflecting positive operating leverage across all five business segments for the fourth consecutive quarter.
- The Markets segment was a standout, generating $5.9 bln in revenue, a 16% yr/yr increase, propelled by strength in both Fixed Income and Equity markets. Fixed Income, Currencies, and Commodities (FICC) sales and trading revenue surged 20% to $4.3 bln, driven by heightened client activity amid volatile U.S. equities markets. Equity markets revenue grew 6% to $1.61 bln, supported by strong performance in derivatives and prime brokerage, reflecting Citigroup’s ability to capitalize on favorable market conditions.
- This robust trading performance bodes well for peers like Goldman Sachs (GS) and Morgan Stanley (MS), which rely heavily on their trading desks for revenue, suggesting potential strength in their upcoming earnings reports set for tomorrow morning, given similar market dynamics.
- The Banking segment also performed strongly, with revenue climbing 18% to $1.92 bln, exceeding estimates of $1.65 bln. Investment banking revenue led the charge, rising 15% to $981 mln, fueled by a 52% surge in advisory revenue from increased mergers and acquisitions activity and a rebound in equity capital markets, which benefited from a revival in initial public offerings after a three-year slowdown.
- This performance stands in contrast to Jefferies (JEF), which reported weakness in its equity underwriting business in Q2, highlighting Citigroup’s competitive edge in navigating a recovering dealmaking environment. The segment’s growth underscores the success of CEO Jane Fraser’s strategy to streamline operations and focus on high-return activities like advisory and capital markets.
- In the consumer-facing U.S. Personal Banking (USPB) segment, revenue grew 6% to $5.12 bln, slightly below estimates, but driven by an 11% increase in Branded Cards revenue to approximately $2.8 bln. This growth was fueled by a 9% rise in card spend volumes and a 15% increase in average loans, reflecting strong consumer engagement and continued normalization of payment rates. Retail Banking revenue rose 16% to approximately $700 mln, propelled by higher deposit spreads achieved through strategic pricing adjustments that capitalized on elevated interest rates, allowing Citigroup to offer competitive yields on deposits while maintaining profitability.
- The Wealth segment continued its stellar performance, with revenue surging 20% to $2.2 bln, marking it as the fastest-growing segment in Q2. This growth was driven by an organic increase in client investment balances, as Wealth clients shifted assets to higher-yielding fixed income products on Citigroup’s platform, alongside strong new client acquisition in segments like Wealth at Work and the Private Bank, which maintained a 29% EBT margin.
Citigroup’s Q2 earnings demonstrate robust growth across all segments, a stark improvement from the challenges faced a couple of years ago. With Markets, Banking, USPB, and Wealth each delivering strong revenue gains and operating expenses tightly controlled, the company appears to be firing on all cylinders.
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