Market Snapshot
| Dow |
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| (%) | | Nasdaq |
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| (%) | | SP 500 |
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| (%) | | 10-yr Note |
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| | NYSE | Adv 1853 | Dec 820 | Vol 483.03 mln | | Nasdaq | Adv 2438 | Dec 1691 | Vol 8.46 bln |
Industry Watch
| Strong: Materials, Health Care, Consumer Discretionary, Energy, Real Estate, Financials, Utilities |
| | Weak: Communication Services, Information Technology |
Moving the Market
Early underperformance from mega-cap stocks following yesterday's bullish trade
Airlines outperform after solid report from Delta Airlines (DAL)
Broad based participation drives the S&P 500 and the Nasdaq Composite to new record highs
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Closing Market Summary: Bullish action propels to record highs
10-Jul-25 16:40 ET
Market is Closed
[BRIEFING.COM] The stock market rebounded from opening losses, with the S&P 500 and Nasdaq Composite climbing to new record highs in today’s session.
Though there was some early selling off yesterday's bullish action, the market displayed a positive growth outlook that was reflected in the outperformance of the small-cap and mid-cap stocks, cyclical sectors, and gains in nine of the 11 S&P 500 sectors.
Small-cap and mid-cap stocks led the recovery from session lows this morning, as did “other” stocks in the S&P 500. That trend continued throughout the day. The Russell 2000 finished with a gain of 0.5%, as did the S&P Mid Cap 400 . The equal-weighted S&P 500 closed 0.6% higher. The market cap-weighted S&P 500 rose 0.3%.
The Invesco S&P High Beta ETF (+1.3%) outperformed, reflecting a bull market attitude.
While mega-cap stocks started sluggishly, they ultimately held their ground as a cohort. The Vanguard Mega Cap Growth ETF closed unchanged for the day. The mega-cap underperformance largely contributed to the communication services (-0.5%) and information technology sectors (-0.1%) finishing in negative territory.
The consumer discretionary sector (+1.0%) led the other nine sectors, bolstered by leadership from travel names after Delta Air Lines (DAL 56.79, +6.09, +12.0%) beat quarterly expectations and reinstated its guidance for the year. Many airlines had paused their guidance following the tariff announcements in early April.
Additionally, Tesla (TSLA 309.87, +13.99, +4.7%) traded sharply higher amid reports that the company is awaiting approval for a Robotaxi service in San Francisco, while also planning an expansion into Arizona, according to a Bloomberg report. McDonald’s (MCD 298.39, +5.37, +1.83%), which jumped on a Goldman Sachs upgrade to Buy from Neutral, also provided some sector support.
U.S. Treasuries finished close to where they settled in yesterday's session. There was some modest selling early today following a sturdy initial jobless claims report that is expected to keep a July rate cut on ice, but there was no follow-through.
Yields started to dip in front of today's $22 billion 30-yr bond auction results at 1:00 p.m. ET, and they continued to move lower in its wake. The auction was met with decent demand, and it concluded a week that saw the market absorb $119 billion in new supply without much problem. That fostered a bit of a relief trade that contributed to the recovery effort, which transpired amid a seeming lack of concern for tariff-induced inflation pressures.
- Nasdaq: +6.8% YTD
- S&P 500: +6.8% YTD
- DJIA: +5.0% YTD
- S&P 400: +2.5% YTD
- Russell 2000: +1.5% YTD
Reviewing today's data:
- Initial jobless claims decreasing by 5,000 for the week ending July 5 to 227,000 (Briefing.com consensus: 245,000). Continuing jobless claims for the week ending June 28 increased by 10,000 to 1.965 million, which is the highest level since November 13, 2021.
- The key takeaway from the report continues to be that businesses have been slow to let employees go, but that it has become more difficult to find a job after losing one. This dynamic reflects a softening labor market, but not a truly weak labor market.
Consumer discretionary drives gains
10-Jul-25 15:30 ET
Dow +233.15 at 44691.45, Nasdaq +30.94 at 20642.28, S&P +20.60 at 6283.86
[BRIEFING.COM] The major averages trade near their best levels of the day heading into the final hour of the session.
While the market has found strength across a variety of sectors today, the consumer discretionary sector (+1.0%) has spent the vast majority of the day as the top advancer.
Top-component Amazon (AMZN 222.18, -0.36, -0.2%) was down as much as 1.2% this morning, but has shed most of its early losses as mega-cap stocks have shaken off a sluggish start.
Meanwhile, Tesla (TSLA 309.01, +13.13, +4.4%) has led the mega-caps today amid reports that the company is awaiting approval for a Robotaxi service in San Francisco, while also planning on expanding the program into Arizona, according to a Bloomberg report.
Record highs for S&P 500 and Nasdaq
10-Jul-25 15:00 ET
Dow +234.91 at 44693.21, Nasdaq +32.75 at 20644.09, S&P +20.32 at 6283.58
[BRIEFING.COM] The stock market continues to tick upward as the major averages all currently trade green for the day.
The S&P 500, for its part, hit a new all-time high today, as did the Nasdaq Composite.
Breadth figures reflect the positive trend as advancers outpace decliners by a nearly 8-to-5 ratio on both the NYSE and the Nasdaq.
The information technology sector (unchanged) has trimmed its early losses, on the continued strength of Apple (AAPL 212.75, +1.61, +0.8%) and NVIDIA (NVDA 163.77, +0.89, +0.6%), hovering near its session highs.
Elsewhere in the sector, Advanced Micro Devices (AMD 143.72, +5.31, +3.84%) is benefitting from an upgrade to Buy from Hold at HSBC, while shares of Oracle (ORCL 237.07, +1.26, +0.6%) increased after an upgrade to Overweight from Neutral at Piper Sandler.
S&P 500 rises 0.4% as EL, TER, and NCLH lead gains; Axon tumbles 8%
10-Jul-25 14:30 ET
Dow +304.01 at 44762.31, Nasdaq +36.66 at 20648.00, S&P +26.00 at 6289.26
[BRIEFING.COM] The S&P 500 (+0.42%) is in second place on Thursday afternoon, up a clean 26 points.
Briefly, S&P 500 constituents Estee Lauder (EL 92.56, +5.95, +6.87%), Teradyne (TER 98.78, +6.00, +6.47%), and Norwegian Cruise Line (NCLH 23.19, +1.23, +5.60%) are among today's top gain getters. EL caught a bullish BofA note this morning, pushing the stock to eight-month highs, while TER jumps after Hunterbrook detailed Amazon's new warehouse robot, Vulcan, hailed as a breakthrough in automation with a "sense of touch," actually relies on robotic arms supplied by Teradyne-owned Universal Robots, with NCLH enjoying a nice boost on a positive read-through of Delta Air Lines' (DAL 57.16, +6.46, +12.74%) upbeat earnings and guidance.
Meanwhile, Axon (AXON 741.96, -63.90, -7.93%) is at the bottom of the standings.
Gold edges higher as softer yields, tariff concerns lift safe-haven appeal
10-Jul-25 14:00 ET
Dow +306.74 at 44765.04, Nasdaq +38.19 at 20649.53, S&P +25.53 at 6288.79
[BRIEFING.COM] The Nasdaq Composite (+0.19%) is higher this afternoon, but more aggressive gains are had elsewhere among the major averages.
Gold futures settled $4.70 higher (+0.1%) at $3,325.70/oz, driven primarily by a weaker U.S. dollar and softening Treasury yields, both of which reduce the opportunity cost of holding non-yielding bullion. The market also remains sensitive to escalating trade tensions, notably the latest round of U.S. tariffs announced on copper and imports from several countries, an environment that tends to bolster safe-haven assets like gold. While traders seem to be experiencing "tariff fatigue," that sentiment may be temporarily offset by geopolitical jitters.
Meanwhile, the U.S. Dollar Index is now up +0.2% to $97.68.
Delta Air Lines sharply higher on strong quarter and dividend hike; leads to rally in airline stocks
Delta Air Lines (DAL +12%) is flying higher today after a strong Q2 report that showed signs of stabilization. DAL reported an EPS beat and record revenue for Q2. This is an encouraging sign for airlines generally, especially as DAL is the first to report in the industry. Notably, after many airlines paused guidance following the tariff announcements, DAL restored guidance for FY25, showing it is confident in its near-term outlook. With muted domestic travel demand and a turbulent macro economy, investors were closely watching this report to see if conditions had begun to stabilize for the summer travel season. These positives seem to be the signs investors were hoping for, sending the stock higher today.
- DAL reported record revenue for its June quarter, with adjusted revenue up approximately 1% yr/yr to $15.5 bln. On capacity, DAL noted that the industry is taking the appropriate steps to align supply with demand as it moves beyond the peak summer period. DAL has proactively adjusted capacity to address areas of softness, with reductions in main cabin and off-peak flying beginning in August.
- With demand showing signs of stabilization, a favorable industry supply backdrop, current fuel prices, and targeted capacity cuts, DAL believes it is well positioned to deliver full year results that reflect its diverse revenue model and durability.
- Another positive development was DAL increasing its dividend by 25%, thanks to its strong generation of free cash flow. Investors are clearly interpreting the dividend boost as management being confident in its near term outlook.
- Investors may recall that DAL suspended its full year guidance in early April following the tariff announcements. We view its decision to reinstate the full year guidance as a positive development.
- DAL's high margin premium cabin continued to show resilience, growing mid-single digits yr/yr and driving double-digit operating margins. Premium revenue grew 5% yr/yr, outpacing the main cabin. Loyalty revenue also grew 8% as customer engagement reached new records, with Millennial and Gen Z segments representing nearly 50% of the member base.
- Other airlines are moving higher today in sympathy with the strong report from DAL. As DAL is the first carrier to report, it helps set expectations for other airlines reporting results in the coming weeks. American Airlines (AAL +14%), Allegiant Air (ALGT +12%), Alaska Air (ALK +10%), Jet Blue Airways (JBLU +9%), Southwest Air (LUV +8%), and United Airlines (UAL +15%), are all flying higher today, with LUV soaring to levels not seen since summer 2023.
Overall, DAL's Q2 results are a constructive sign for both the company and the broader airline industry. The EPS beat, reinstated FY25 guidance, and dividend hike all signal improving fundamentals and management confidence. We think these are the main reasons why the stock is up sharply today. Prior to the report, investors were in wait-and-see mode. With the strong report today, investors appear to be getting back on board the airline industry.
Simply Good Foods recovers off its initial lows; positive earnings call seems to be the catalyst
Simply Good Foods (SMPL +3%) is trading modestly higher following its Q3 (May) report. The stock initially traded lower, but turned higher during the positive earnings call. The weight loss nutrition company (brands include Atkins, Quest, OWYN) reported EPS slightly above expectations, which followed a very large beat in Q2 (Feb). Revenue increased 13.8% yr/yr to $381 mln, which was roughly in line with expectations. Revenue growth continues to be strong from Only What You Need (OWYN) and Quest, while Atkins remains a drag on overall growth.
- Consumption was once again up double digits for both Quest and OWYN, making up 70% of net revenue for SMPL, which is more than offsetting the declines in Atkins. Quest consumption grew 11%, with house-hold penetration up 120 bps yr/yr to 18.3%. Salty Snacks is on pace to become the largest platform within the Quest business, with retail takeaway growing 31%. Management is quite excited about the support it's getting from retailers, who have recognized the growth of the segment.
- SMPL also remains bullish on OWYN, with retail takeaway and distribution increasing 24% and 18%, respectively. SMPL expects retail takeaway trends to remain strong, benefiting from incremental distribution wins. Management is confident in their ability to achieve double digit growth in OWYN due to its strong velocities and category incrementality, which will help OWYN expand distribution, house-hold penetration, and awareness.
- Growth for the nutritional snacking category remained robust in Q3, up double digits for the 17th consecutive quarter. This reflects the continued mainstreaming of consumer demand for high-protein, low-sugar and low-carb food and beverage options.
- For its Atkins brand, net sales declined 12.7%, and consumption was down 13% yr/yr, with the declines accelerating due to broader distribution losses at a key customer and from not repeating high volume merchandising events. Although management has plans to put Atkins back on a growth trajectory, it expects to see continued declines in its final quarter of FY25 and into FY26. Perhaps investors were disappointed that there was not a positive outlook for FY26.
Overall, the results in Q3 for SMPL were solid, with growth being driven by Quest and OWYN. In particular, management remains bullish on OWYN and is pleased with the trajectory of the nutritional snacking category, which is an encouraging sign. We suspect that management saying that Atkins is expected to remain weak heading into FY26 is being viewed as a disappointment by investors. People want to see the brand turnaround at some point. On a final note, we wonder if SMPL is losing any customers given the high price points of their products. Management remains bullish, but it is something for investors to keep an eye on in the future.
Conagra lower on Q4 miss and lackluster FY26 guidance; inflation/investments hurting margins (CAG)
Conagra (CAG -3%) is pulling back following its Q4 (May) earnings report this morning. The food giant (Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim etc.) missed on EPS and revs. Revenue fell 4.3% (-3.5% organically) yr/yr to $2.78 bln. Perhaps most troubling, it guided FY26 adjusted EPS well below analyst expectations at $1.70-1.85. It also guided to FY26 organic revs of -1% to +1%, which is not comparable to consensus.
- CAG says it's proactively managing the business by investing in high-potential frozen and snacks, prioritizing volume strength, and further enhancing supply chain resiliency. However, CAG said that inflation across FY25 and FY26 combined adds up to another 11% of cost increases. This confluence of high inflation and higher investments to improve volume and its supply chain translates to temporary margin compression, which explains the weak FY26 EPS guidance.
- This food giant has been undergoing a portfolio transformation. It recently completed the divestiture of its Van de Kamp's and Mrs. Paul's brands to High Liner Foods for $55 mln in cash. Conagra also recently completed the divestiture of its Chef Boyardee brand to Hometown Food. Conagra is seeking to streamline its portfolio and focus on its most profitable and high-growth areas, particularly in frozen foods and snacks. It is divesting low-margin, non-core, or slow-growth brands to concentrate on more lucrative brands like Healthy Choice, Birds Eye, and Marie Callender's. It also is seeking to pay down debt and focus more on innovation and growth.
- Grocery & Snacks segment sales in Q4 decreased 2.1% (-3.3% organically) to $1.2 bln, which was driven by a price/mix decrease of 1.7% of and a volume decrease of 1.6%. Refrigerated & Frozen segment revenue (both reported and organic) decreased 4.4% to $1.1 bln driven by a price/mix decrease of 2.3% and a volume decrease of 2.1%. Foodservice segment sales decreased 4.0% to $280 mln. And finally, its International segment saw a big 13.8% decline in sales to $230 mln.
- The company said it had to navigate an environment that proved to be more challenging than anticipated throughout FY25. CAG entered the year focused on returning volume to growth and delivered consistent progress through the first half. This resulted in a return to absolute volume growth in domestic retail in Q2 and 1H EPS in line with internal plans. However, the second half of FY25 was impacted by higher than expected inflation, FX headwinds, and supply constraints.
This was a disappointing end to FY25 for Conagra and we suspect investors were hoping for a more upbeat outlook in FY26. Our first thought was, given the recent divestitures, maybe analysts had not yet adjusted their models. However, this was a good bit below expectations, especially the guidance so we think it's more than just that. Unfortunately, Conagra's near term outlook remains cloudy. Higher inflation and higher investments are pressuring margins in the near term. Also, the company really needs to get its supply chain issues behind them.
RxSight under heavy pressure following second consecutive quarter of a miss and downside guidance
Last night, RxSight (RXST -38%), a medical technology company which focuses on light adjustable lenses (LAL) and light delivery devices (LDD) used in cataract vision correction, issued Q2 revenue guidance, which was a good bit below analyst expectations. Q2 guidance shows a decline of 4% yr/yr to $33.6 mln, which would be its first decline in six quarters. RXST also lowered FY25 revenue guidance significantly to $120-130 mln from $160-175 mln. The new guidance represents an expected 7%-14% decline from FY24, sparking a very negative reaction from investors.
- What is shocking to investors is that this is the second quarter in a row that this has happened. On April 3, the company missed on Q1 revs and lowered full year revenue guidance. The stock gapped down then and is gapping down sharply again today. To have this happen two quarters in a row is spooking investors.
- The Q2 underperformance was caused by a sharp decline in LDD sales (down 49% yr/yr), along with softer-than-expected LAL procedures. While longer capital equipment acquisition cycles may have contributed to the drop in LDD sales, management feels the underlying cause is a slower ramp in LAL utilization. This trend was first observed in 2024, following a period of rapid growth in RXST's installed based. Investor concern now centers on whether growth has reached its peak and whether RXST can reignite LAL adoption.
- RXST feels that its return to growth will depend on its clinical partners highlighting the visual outcomes and customer success from LAL. RXST will implement a more proactive data-driven customer support model by analyzing utilization trends, adoption tiers, and clinical outcomes. The hope is to close the adoption gaps and enhance customer satisfaction; however, investors will be in wait-and-see mode before buying back into RXST.
Overall, the results this quarter show a slowdown in RXST's growth, driven by weaker LDD sales and softer LAL utilization. Investors are clearly spooked by having this happen in back-to-back quarters. Investors are going to want to see some stabilization before considering getting back into the stock. The company will report full Q2 results on August 7. Investors will keenly listen for Q3 guidance to see if RXST can show signs of stabilization.
Penguin Solutions recovers from initial drop as Q3 top line miss seems more timing-related (PENG)
Penguin Solutions (PENG +6%) is nicely higher today after reporting a healthy Q3 (May) EPS beat. It also raised FY25 EPS guidance by a good amount. The main issue is that revenue rose just 7.8% yr/yr to $324 mln, which was light of analyst expectations. The good news is that PENG reaffirmed the mid-point of FY25 top line guidance at +15-19% vs +14-20% prior guidance, which implies the Q3 miss was more of a timing issue and Q4 (Aug) revenue should be better.
- This company helps hyperscalers, neo-cloud service providers and enterprise customers manage the complexity (power, cooling, AI compute, memory, storage) of AI Adoption by helping them design and build AI infrastructure. Its expertise lies in large-scale deployments, which has been developed over a 25+ year history implementing complex data center clusters beginning with HPC in its early days.
- PENG continues to see signs of early-stage Enterprise AI adoption across vertical markets such as financial services, energy, defense, education and neo-cloud segments. PENG's belief is that investment in AI-powered systems deployed throughout the industry in 2023-24 would lead to growth in full production installs in 2025-26. PENG says it's now seeing signs that as the industry has entered the initial stages of that growth with build-outs at scale.
- In terms of the top line miss, PENG concedes that the timing of actual deployments and associated revenue recognition can be unpredictable and concentrated. This was the case in Q3 when its Advanced Computing revenue declined yr/yr to $132 mln. AC revenue, in particular, tends to be lumpy due to customer concentration and the timing of large project implementation.
- PENG continues to see increased interest at enterprise customers, as well as in neo-cloud customer opportunities due to increased investments in large-scale AI infrastructure. PENG noted some exciting wins at existing customers in Q3 and closed five new customer bookings, highlighted by wins in the federal, energy and biotech segments.
The stock had an initial sharp drop following its earnings last night, but it recovered during the call and now shares are in positive territory. We think the earnings call helped to calm investor nerves. The initial reaction was caused by the top line miss, but we think the FY25 guidance helped to assuage fears as the Q3 miss looks more like a timing issue rather than a demand pullback.
On a final note, the stock came under pressure in early April following the announcement of the reciprocal tariffs. Investors were right to be concerned that this may cause PENG's clients to pause AI deployments. However, the stock has recovered nicely since then as investors seem less concerned that the tariffs will be implemented.
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