Market Snapshot
| Dow | 44693.91 | -316.38 | (-0.70%) | | Nasdaq | 21056.58 | +37.94 | (0.18%) | | SP 500 | 6363.35 | +4.44 | (0.07%) | | 10-yr Note |
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| | NYSE | Adv 934 | Dec 1791 | Vol 507.12 mln | | Nasdaq | Adv 1492 | Dec 3007 | Vol 11.20 bln |
Industry Watch
| Strong: Communication Services, Information Technology, Energy |
| | Weak: Consumer Discretionary, Materials, Health Care, Consumer Staples, Real Estate, Utilities, Financials, Industrials |
Moving the Market
Fresh wave of earnings data, including several mega-cap names
Smaller-cap stocks pulling back from two consecutive days of strength
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Mega-cap strength preserves record highs
24-Jul-25 16:30 ET
Dow -316.38 at 44693.91, Nasdaq +37.94 at 21056.58, S&P +4.44 at 6363.35
[BRIEFING.COM] Yesterday's upward momentum and a flurry of earnings reports quickly propelled the S&P 500 (+0.1%, intraday high of 6,381.31) and Nasdaq Composite (+0.2%, intraday high of 21,113.10) to fresh record highs, and while the majority of the session passed in an uneventful manner, the early gains were enough to see the indices capture record closing highs as well.
Earnings were a key catalyst for the communication services sector (+0.5%), which saw continued outperformance in cellular providers after T-Mobile US (TMUS 247.50, +13.57, +5.8%) raised its guidance and delivered an impressive EPS beat. More notably, the company led the industry in key metrics, including service revenue, postpaid net additions, and postpaid phone net additions.
The sector also benefitted from top component Alphabet (GOOG 193.28, +1.76, +0.9%) trading higher after the company beat EPS expectations by $0.13 and reassured the market about the industry's commitment to AI development by raising its capital spending guidance by $10 billion to $85 billion.
Alphabet's hefty commitment to AI, combined with headlines that President Trump signed executive orders to support the export of American AI technology and the buildout of data center infrastructure, led to the technology sector (+0.7%) finishing as one of the top performers.
Though the sector captured a similar gain yesterday, sluggishness amongst chipmakers this week persisted, with the PHLX Semiconductor Index posting a modest gain of 0.1%, which leaves it down 1.5% for the week.
The energy sector (+0.7%) rounded out the top three performers, with a vast majority of its constituents capturing modest gains amid a $0.94 increase in oil prices to $66.19 per barrel, a change of 1.4%.
The eight other sectors finished in negative territory, though the consumer discretionary (-1.2%) and materials (-0.8%) were the only sectors with losses greater than 0.5%.
The consumer discretionary sector faced pressure after Tesla (TSLA 305.30, -27.26, -8.2%) reported EPS in-line, with an 11.8% decrease in revenues year-over-year and deliveries falling 13.5% in that same time span. More importantly, CEO Elon Musk warned of "a few rough quarters" ahead, citing the expiration of federal electric vehicle tax credits as a significant headwind.
Chipotle Mexican Grill (CMG 45.76, -7.02, -13.3%) also traded lower following its earnings release, which saw the company report EPS in line, with revenues rising a slim 3.0% year-over-year, and issuing flat FY25 comparable sales guidance.
Despite the poor showing from Tesla, mega-cap stocks performed well, with the Vanguard Mega Cap Growth ETF finishing with a 0.4% gain. The outperformance in mega-cap names preserved early gains in the major averages, as eight sectors finished in negative territory and breadth figures favored decliners by a nearly 2-to-1 ratio.
Relatively broad-based selling activity saw small-cap and mid-cap stocks give back some of their gains from earlier in the week, as the S&P Mid Cap 400 finished with a loss of 0.9%, and the Russell 2000 lost 1.3%.
Today's session reflected the idea that the market is still optimistic about the potential of AI growth, but a lack of trade developments and other headlines resulted in some profit taking in most other spaces.
U.S. Treasuries finished Thursday with losses in most tenors, though the long end outperformed, allowing the long bond to reclaim its opening loss by the close. Longer tenors climbed off their lows after today's second batch of data showed that flash July S&P Global U.S. Manufacturing PMI (49.5; prior 52.9) returned to contraction, while activity in the services sector accelerated, with the flash July S&P Global U.S. Services PMI hitting 55.2, up from 52.9 in June.
The 10-year note yield settled up two basis points to 4.41%.
- Nasdaq Composite: +9.1% YTD
- S&P 500: +8.2% YTD
- DJIA: +5.0% YTD
- S&P 400: +2.2% YTD
- Russell 2000: +1.0% YTD
Reviewing today's data:
- New home sales increased 0.6% month-over-month in June to a seasonally adjusted annual rate of 627,000 units (Briefing.com consensus 650,000) from an unrevised 623,000 in May. This leaves the pace of sales near the lowest level of the year, comparable to what was seen in October. On a year-over-year basis, new home sales were down 6.6%.
- The key takeaway from the report is that is that the pace of sales remained near the lowest level of the year, as sharp decreases in sales in the Northeast and the West masked gains in the Midwest and the South. There was pressure on the median selling price as homes priced between $300,000 and $399,000 accounted for 35% of all sales, up from 25% in May.
- Initial jobless claims for the week ending July 19 decreased by 4,000 to a lowly 217,000 (Briefing.com consensus: 225,000). Continuing jobless claims for the week ending July 12 increased by 4,000 to 1.955 million.
- The key takeaway from the report is still the same. The low level of initial jobless claims connotes a relatively solid labor market; however, the elevated level of continuing jobless claims connotes some added difficulty in finding a new job in the event one gets laid off by their employer.
- The S&P Global U.S. Manufacturing PMI hit 49.5 in the preliminary reading for July, down from 52.9 in June.
- The S&P Global U.S. Services PMI hit 55.2 in the preliminary reading for July, up from 52.9 in June.
- Weekly natural gas inventories increased by 23 bcf after increasing by 46 bcf a week ago.
S&P 500, Nasdaq seeking record closing highs
24-Jul-25 15:30 ET
Dow -238.59 at 44771.70, Nasdaq +81.36 at 21100.00, S&P +16.31 at 6375.22
[BRIEFING.COM] The major averages have increased slightly as the market enters the final half hour of trading.
The Nasdaq Composite (+0.4%) has spent the majority of the session leading the major averages, due in part to a strength in tech stocks today.
The communication services (+0.9%) and information technology (+0.8%) sectors are the day's top performers, boosting the Nasdaq Composite and the S&P 500 (+0.3%) to fresh record highs.
Meanwhile, the DJIA lags the group, facing pressure from IBM (IBM 259.23, -22.78, -8.08%) and Honeywell (HON 225.22, -14.05, -5.87%) despite both companies posting upside Q2 results.
Materials sector lags
24-Jul-25 15:05 ET
Dow -241.90 at 44768.39, Nasdaq +73.03 at 21091.67, S&P +13.41 at 6372.32
[BRIEFING.COM] The Nasdaq Composite (+0.4%) leads the major averages, as the S&P 500 (+0.2%) captures a more modest gain, and the DJIA (-0.6%) underperforms.
The major averages are little changed over the past several hours, with a lack of developments on the trade front or elsewhere keeping the indices trading in a relatively tight range.
Sector strength remains almost evenly split, as six sectors trade in positive territory for the day.
The materials sector (-0.9%) is among the worst performers, as Sherwin-Williams (SHW 339.62, -3.32, -1.0%) trades lower following a disappointing earnings report on Tuesday.
Elsewhere in the sector, Dow (DOW 24.60, -5.78, -19.02%) is among the worst performers within the S&P 500 after the company missed on EPS expectations and lowered dividends.
Earnings movers lift S&P 500; West Pharm, URI, Nasdaq lead gains while LKQ sinks
24-Jul-25 14:25 ET
Dow -166.16 at 44844.13, Nasdaq +85.42 at 21104.06, S&P +20.30 at 6379.21
[BRIEFING.COM] The S&P 500 (+0.32%) is in second place on Thursday afternoon, up about 20 points.
Briefly, S&P 500 constituents West Pharm (WST 274.03, +46.72, +20.55%), United Rentals (URI 872.14, +68.89, +8.58%), and NASDAQ (NDAQ 94.67, +6.39, +7.24%) pepper the top of the standings after releasing corporate earnings.
Meanwhile, Tennessee-based auto part manufacturer LKQ (LKQ 30.72, -7.89, -20.44%) is underperforming after missing on Q2 earnings and guiding down.
Gold falls as easing global tensions and trade progress dull safe-haven appeal
24-Jul-25 14:00 ET
Dow -183.30 at 44826.99, Nasdaq +72.26 at 21090.90, S&P +15.99 at 6374.90
[BRIEFING.COM] The Nasdaq Composite (+0.34%) is atop the major averages with just two hours to go on Thursday.
Gold futures settled $23.70 lower (-0.7%) at $3,373.90/oz, as easing geopolitical tensions and progress on U.S. trade deals with Japan and the EU reduced safe-haven demand. Equities rallied on the improved risk outlook, further weighing on gold.
Meanwhile, the U.S. Dollar Index is now up about +0.1% to $97.33.
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Chipotle under pressure after Q2 results; investors hope new CEO and COO can spark turnaround (CMG)
Chipotle Mexican Grill (CMG -13%) is under heavy pressure today after reporting its Q2 results last night. The burrito chain continues to operate in a challenging environment. The company has missed on revenue in 3 of the last 4 quarters. Perhaps just as discouraging to investors is that CMG also lowered its FY25 comp sales guidance to flat from low single digits.
- Comp sales declined -4% in Q2, with management noting Q2 "was probably the worst aggregate storm", due to lapping an extraordinary quarter last year. The decrease in comp sales guidance reflects ongoing volatility in the consumer environment, with management expecting a return to normal trends going into FY26.
- CMG did have some bright spots this quarter. It completed the rollout of produce slicers across all restaurants which should make them more efficient. Furthermore, it is seeing success in its new international markets. Its location in Kuwait completed its first year of operations, with revenue surpassing the average unit volume in the U.S.
- Despite the tough comps from a year ago, CMG's Q2 results were relatively lackluster. The slowing revenue growth and decrease in comp sales guidance are weighing more heavily on sentiment than the positives.
We think a big problem with CMG is that it doesn't really have a value menu like other fast-food restaurants. For example, Wendy's (WEN) has its Biggie Bag, and McDonald's (MCD) has its McValue menu. Where consumers feel stretched, these value items may be a more encouraging option. Also, CMG's higher price point relative to other fast-food restaurants may be exacerbating consumer hesitation.
On a final note, CMG recently went through some leadership changes, including a new CEO in November and a new COO in May. Investors are hoping they can spark a turnaround. CEO Scott Boatwright noted that COO Jason Kidd has already identified opportunities to improve the experience for both employees and guests that may have been "overlooked" by the prior COO.
Alphabet trounces estimates yet again, powered by AI innovation and Cloud momentum (GOOG)
Google parent Alphabet (GOOG) once again surpassed EPS and revenue expectations in 2Q25, a recurring theme over the past three years, driven by robust performance across all business lines, with the Cloud segment shining particularly brightly. Fueled by a 32% yr/yr surge in Google Cloud revenue to $13.62 bln, up from 28% growth in the prior year’s quarter, GOOG delivered solid overall growth of nearly 14%, easily beating analysts' forecasts. To support this momentum, GOOG raised its FY25 capital expenditure guidance by $10 bln to $85 bln, reflecting aggressive investments in AI infrastructure to meet soaring demand from cloud customers, particularly for generative AI and enterprise solutions.
- The Search business, GOOG’s core revenue engine, continued to demonstrate its dominance, with Search and Other revenue climbing 12% yr/yr to $54.19 bln, accelerating from 9.8% growth in Q1. This upswing was propelled by enhanced user engagement, driven by AI-powered features like AI Overviews and AI Mode, which has reached 100 mln monthly active users in the U.S. and India since its May launch. Additionally, GOOG’s full-stack AI approach, leveraging custom Tensor Processing Units like the seventh-generation Ironwood, optimizes search efficiency and counters competitive pressures from AI-driven chatbots like ChatGPT, reinforcing GOOG’s market leadership despite ongoing antitrust scrutiny.
- YouTube also outperformed, with ad revenue rising 13% to $9.8 bln, surpassing estimates and accelerating from 10.3% growth in Q1. Key drivers include improved monetization of YouTube Shorts, which has gained traction as advertisers increasingly value its short-form content, and robust growth in subscription services like YouTube Music and YouTube TV, which now contribute significantly to the platform’s revenue mix. The focus on AI-enhanced content recommendations and ad formats has further boosted engagement, positioning YouTube as a leader in streaming watchtime and podcasts, with a combined annual revenue run rate alongside Cloud exceeding $110 bln.
- The Google Cloud segment was the standout, delivering 32% revenue growth to $13.62 bln and a remarkable 141% surge in operating income to approximately $3.1 bln, reflecting margins expanding to around 22.7% from 9.4% a year ago. This performance was driven by strong demand for Google Cloud Platform’s (GCP) core infrastructure, AI platforms, and generative AI solutions, with Vertex AI supporting over 200 foundation models, including Gemini 2.5 Pro and Imagen 3, enabling enterprises to integrate multi-model AI efficiently. Strategic partnerships, such as with OpenAI for ChatGPT’s cloud infrastructure, and GOOG’s cost-efficient, in-house TPU hardware provide a competitive edge over rivals reliant on third-party GPUs, while capacity constraints highlight the need for the increased capex to scale data centers and servers.
GOOG's Q2 results underscore its consistent ability to deliver strong, diversified growth, with exceptional momentum in Cloud complemented by resilient Search and YouTube performance. However, the $10 bln hike in FY25 capex guidance to $85 bln has sparked some investor unease, given the scale of AI infrastructure investments and uncertainties in the macroeconomic environment. Despite these concerns, GOOG’s structural AI tailwinds and operational discipline position it well for sustained earnings momentum.
IBM pulls back sharply despite upside; we think investors wanted better guidance for 2H25 (IBM)
IBM (IBM -8%) is pulling back sharply despite reporting quite healthy upside results for Q2 last night. IBM had a nice EPS beat and revenue grew 7.7% yr/yr to $16.98 bln, which was above expectations. Notably, this was IBM's strongest yr/yr growth since 2Q22. We suspect F/X tailwinds helped with a weaker dollar. We were a bit disappointed IBM did not guide for next quarter revs like it did last quarter. However, IBM reaffirmed FY25 revenue growth of at least 5% CC, while also slightly raising its FCF outlook to exceed $13.5 bln.
- The Q2 outperformance was led by Software and Infrastructure as demand remains high for technology that improves productivity, reduces costs, and fuels innovation. However, IBM did say, while not a major factor overall, geopolitical tensions are prompting a few clients to move cautiously. US federal spending was also somewhat constrained in 1H25, but IBM does not expect it to create long-term headwinds.
- As has been the case in recent quarters, its Software segment was the star of the show with revenue up +10% (+8% CC) to $7.39 bln with strength across key categories of Red Hat (+14% CC), Automation (+14% CC), Data (+7% CC) and Transaction Processing (-2% CC). Software is now about 45% of its business with 80% recurring revenue.
- Infrastructure segment revenue was up big at +14% (+11% CC) to $4.14 bln. Investors were eager to hear about the Q2 launch of its next generation z17 mainframe. z17 is IBM's most advanced mainframe yet. It features the new Telum II processor, delivering more than 450 bln AI inference operations per day with millisecond latency. That means AI models can run directly on transactional workloads with no external servers needed. The launch has gone well and is seeing early strength as AI use cases are resonating strongly with clients.
- Consulting segment revenue was up +3% (flat CC) to $5.31 bln. This segment has been weak in recent quarters as clients have been delaying decision-making and there have been pricing pressures. However, IBM was slightly more positive this time, saying this segment stabilized in 1H25 and its backlog remains healthy, up 4% yr/yr, despite the challenging pricing environment.
IBM reported impressive upside in Q2 and its z17 launch is going well. So, why is the stock lower? First, we think IBM's decision not to raise FY25 top line guidance, despite strong upside in Q2 and with the F/X tailwinds, is being viewed as a disappointment. Second, IBM provided cautious commentary about client spend generally, and federal spend, in particular. Also, its Consulting segment remains a weak spot. And finally, the stock has made a strong run since its Q1 report, so it looks like investors are using Q2 results as an excuse to lock in some profits.
Tesla's better-than-feared Q2 results overshadowed by Musk's cautious outlook (TSLA)
Tesla’s (TSLA) Q2 earnings report, while aligning with EPS and revenue expectations, sparked a sharp selloff in the stock, primarily driven by cautious commentary from CEO Elon Musk and CFO Vaibhav Taneja. Musk warned of “a few rough quarters” ahead, citing the expiration of federal electric vehicle tax credits as a significant headwind, a sentiment echoed by Taneja, who highlighted a limited U.S. vehicle supply in Q3 due to the abrupt policy shift. This guidance, combined with broader concerns about TSLA’s demand and competitive landscape, has amplified investor unease, overshadowing the in-line results and contributing to post-earnings volatility.
- The Q2 results themselves were arguably better-than-feared, especially following back-to-back EPS misses and a reported 13.5% yr/yr drop in vehicle deliveries to 384,122 units, as disclosed earlier in July. Despite these challenges, TSLA posted revenue of $22.5 bln, down 11.8% yr/yr but slightly edging past estimates. However, the results underscored ongoing competitive and brand pressures, with automotive revenue declining 16% to $16.66 bln, reflecting TSLA’s struggle against lower-priced Chinese EV makers like BYD (BYDDY) and NIO (NIO), as well as backlash tied to Musk’s political activities.
- A positive in the report was the improvement in margins, signaling a potential stabilization. Total gross margin rose 90 bps qtr/qtr to 17.2%, with automotive gross margin excluding regulatory credits improving to 15% from 12.5% in Q1. This uptick suggests TSLA may have reached a margin trough, driven by cost-cutting efforts like the revised Model Y’s 20% production cost reduction. Still, average selling prices (ASPs) remain under pressure due to fierce competition, particularly in China and Europe, where TSLA’s aging product lineup faces newer, more affordable alternatives.
- TSLA reiterated its timeline for a more affordable model, with initial builds starting in June 2025 and volume production planned for the second half of the year. But the market seems disappointed by Musk’s comment that the new vehicle is “just a Model Y,” suggesting a lack of differentiation that could limit its ability to recapture market share. The slower-than-expected production ramp, as noted by Taneja, further tempers enthusiasm, particularly as TSLA prioritizes deliveries ahead of the tax credit expiration, potentially straining supply chains.
- The Cybercab, TSLA’s autonomous robotaxi, remains a cornerstone of its long-term growth narrative, with volume production still targeted for 2026. Investors view Cybercab as critical due to its potential to transform TSLA into a high-margin, AI-driven mobility platform. The small-scale robotaxi trial in Austin and progress toward regulatory approval for Full Self-Driving (FSD) in multiple U.S. states and the Netherlands signal momentum, though TSLA trails competitors like Alphabet's (GOOG) Waymo, and Musk’s history of missed autonomy deadlines warrants caution.
TSLA’s Q2 results, while better-than-feared with improved margins and in-line financials, are overshadowed by Musk’s sobering outlook for “rough quarters” ahead and supply constraints flagged by Taneja. The reaffirmed Cybercab timeline and affordable model production offer long-term promise, but near-term headwinds from tax credit changes and competitive pressures dominate investor sentiment.
GE Vernova soars after Q2 beat-and-raise, fueled by strong power and electrification demand (GEV)
GE Vernova (GEV) delivered an impressive beat-and-raise performance in 2Q25 fueled by robust demand for power and grid infrastructure systems, with CEO Scott Strazik characterizing the backdrop as an “investment supercycle” into reliable baseload power, grid infrastructure, and decarbonization solutions. The strong results, outlook, and bullish commentary have sent shares of GEV soaring higher.
Furthermore, the company’s backlog grew by a substantial $5.2 bln sequentially to $128.7 bln, primarily driven by rising orders for gas power equipment, reflecting strong market demand for reliable energy solutions. Gas power equipment backlog and slot reservation agreements expanded from 50 to 55 gigawatts, with 9 gigawatts of new gas equipment contracts signed in the quarter. This growth highlights GEV’s ability to capture demand from data centers, industrial electrification, and global power needs, particularly in markets like the U.S., Japan, and Romania, positioning the company for sustained revenue visibility.
- The Power segment was a standout, with orders surging 44% organically to $7.1 bln, led by robust demand for gas power equipment and services, including a notable contract for three H-class gas turbines for Japan’s Nanko power station. Segment revenue increased 6.8% to $4.76 bln, and EBITDA margin expanded 260 bps to 16.2%, driven by higher volume, improved pricing, and productivity gains, though partially offset by tariff-related costs.
- GEV also raised its FY25 Power segment guidance to 6-7% organic revenue growth (from mid-single digits) and 14-15% EBITDA margin (from 13-14%), reflecting confidence in sustained demand and operational efficiencies, particularly as gas turbine utilization rises to meet baseload power needs.
- The Electrification segment also performed strongly, with revenue jumping 23% (20% organically) to $2.2 bln, driven by Grid Solutions’ growth in high-voltage direct current (HVDC), switchgear, and transformer volumes, fueled by global grid modernization efforts. Segment EBITDA margin nearly doubled to 14.6%, up 740 bps, propelled by higher volume, favorable pricing, and productivity improvements, despite investments in capacity expansion. The equipment backlog grew by $2 bln, reflecting robust demand in North America, Europe, and Asia, while the segment’s outlook was upgraded to ~20% organic revenue growth and 13-15% EBITDA margin for FY25, underscoring its role as a key growth driver amid rising grid infrastructure investments.
- The Wind segment, a persistent laggard due to regulatory headwinds and tariff impacts, showed mixed results. Revenue increased 9% to $2.2 bln, driven by higher onshore wind deliveries, but segment EBITDA losses widened to $(165) mln from $(117) mln a year earlier, primarily due to elevated onshore wind services costs and tariffs affecting offshore wind. The company invested over $100 mln to improve its ~57,000 wind turbine installed base, aiming to enhance performance, but offshore wind challenges, including prior blade manufacturing issues, continue to weigh on profitability.
- Management noted that FY25 EBITDA losses are trending toward the lower end of the $200-$400 million range, with onshore wind margins expected to improve to high single digits, signaling cautious optimism for recovery.
GEV’s Q2 results highlight robust demand in its Power and Electrification segments, driven by global electrification and decarbonization trends. The company’s ability to grow its backlog and expand margins despite tariff pressures positions it as a leader in the energy transition, with strong growth prospects in gas power and grid infrastructure.
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