Market Snapshot
| Dow | 44537.55 | +442.78 | (1.00%) | | Nasdaq | 20223.37 | -146.38 | (-0.72%) | | SP 500 | 6202.91 | -2.04 | (-0.03%) | | 10-yr Note |
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| | NYSE | Adv 2080 | Dec 704 | Vol 586 mln | | Nasdaq | Adv 2553 | Dec 1908 | Vol 7.37 bln |
Industry Watch
| Strong: Consumer Staples, Health Care, Materials, Financials, Energy, Consumer Discretionary |
| | Weak: Technology, Communication Services |
Moving the Market
Senate approves its version of reconciliation bill in 51-50 vote; VP Vance casts tiebreaker vote
Reports of potential narrower trade deals ahead of July 9 deadline
Some rotation away from mega-cap stocks and into broader market; small-cap and mid-cap stocks outperform, as do value stocks
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ttention to trade matters
01-Jul-25 15:35 ET
Dow +442.78 at 44537.55, Nasdaq -146.38 at 20223.37, S&P -2.04 at 6202.91
[BRIEFING.COM] It is a new quarter, but the market's buy-the-dip inclination has remained intact. Shortly after the top of the hour, Bloomberg TV reported that the president isn't thinking about extending the tariff pause past July 9 and that he doubts the U.S. will make a deal with Japan. The president added that Japan could pay "30%, 35%, or whatever tariff we determine."
The market hit an air pocket when those headlines hit but wasted little time getting back on track and returning to levels seen just before those headlines hit. Arguably, it clung to its belief that this tough-sounding rhetoric from the president might simply be a negotiating tactic and that, ultimately, a worst-case scenario will be avoided.
Time will tell if that is the case, but with the closing bell less than 30 minutes away, the market cap-weighted S&P 500 is little changed and much closer to its high for the session (6,210.78) than it is to its low (6,177.97).
Broader market in good shape
01-Jul-25 15:05 ET
Dow +425.25 at 44520.02, Nasdaq -184.98 at 20184.77, S&P -7.31 at 6197.64
[BRIEFING.COM] The mega-cap stocks dominated the price action in the recovery from the April 7 lows, but the start of the third quarter has seen a rotation away from several stocks in the space and into other parts of the market that trailed those names during the second quarter.
Accordingly, today's upside leaders are found in the small-cap stocks and mid-cap stocks, as well as the "other 493 stocks" in the S&P 500, evidenced by the 1.3% gain in the equal-weighted S&P 500.
The market cap-weighted S&P 500 is down 0.2%, pressured by losses in the likes of Tesla (TSLA 300.71, -16.95, -5.34%), NVIDIA (NVDA 153.19, -4.80, -3.04%), Meta Platforms (META 716.82, -21.27, -2.88%), Microsoft (MSFT 491.67, -5.74, -1.15%), and Alphabet (GOOG 175.87, -1.52, -0.86%).
Elsewhere, the value factor is outperforming the growth factor today. The Russell 3000 Value Index is up 1.1% versus a 0.8% decline for the Russell 3000 Growth Index.
S&P 500 edges lower as BLDR, LVS, and PKG lead gainers; WMB slips on nat gas weakness
01-Jul-25 14:30 ET
Dow +441.23 at 44536.00, Nasdaq -120.14 at 20249.61, S&P -2.24 at 6202.71
[BRIEFING.COM] The S&P 500 (-0.04%) is in second place on Tuesday afternoon, down just 2 points.
Briefly, S&P 500 constituents Builders FirstSource (BLDR 127.34, +10.65, +9.13%), Las Vegas Sands (LVS 47.32, +3.81, +8.76%), and Packaging Corp. (PKG 202.73, +14.28, +7.58%) pepper the top of the standings. LVS jumps on Macau gaming data, while PKG outperforms after announcing a $1.8B all-cash acquisition of Greif's (GEF 69.33, +4.34, +6.68%) containerboard business, a deal seen as strategically additive and immediately accretive to earnings.
Meanwhile, Williams Cos (WMB 59.11, -3.70, -5.89%) is underperforming, slipping a bit as nat gas futures also display weakness.
Gold surges 1.3% to record high on tariff jitters and Fed cut bets
01-Jul-25 14:00 ET
Dow +426.87 at 44521.64, Nasdaq -108.65 at 20261.10, S&P +0.93 at 6205.88
[BRIEFING.COM] The Nasdaq Composite (-0.53%) is in last place on Tuesday afternoon.
Gold futures settled $42.10 higher (+1.3%) at $3,349.80/oz, amid a softening dollar and growing macro uncertainty. Looming trade policy risk tied to President Trump's impending July 9 tariff deadline, up to 50% tariffs on China and other countries, continues to feed safe-haven demand. Additionally, markets are pricing in potential Fed rate cuts later this year, fueled partly by political pressure from the White House to ease policy, further lifting gold as a classic hedge.
Meanwhile, the U.S. Dollar Index is little changed at $96.82.
Dow leads market rally, powered by Amgen, Merck, and Nike; NVIDIA lags
01-Jul-25 13:30 ET
Dow +434.05 at 44528.82, Nasdaq -118.79 at 20250.96, S&P -1.36 at 6203.59
[BRIEFING.COM] The Dow Jones Industrial Average (+0.98%) is hardily in first place, attempting to rally to session highs in recent trading.
A look inside the DJIA shows that Amgen (AMGN 289.95, +10.74, +3.85%), Merck (MRK 81.92, +2.76, +3.49%), and Nike (NKE 73.08, +2.04, +2.87%) are among today's top gain getters.
Meanwhile, NVIDIA (NVDA 154.17, -3.82, -2.42%) is lagging its counterparts.
The DJIA is now +6.07% off last Monday's lows.
General Motors speeds higher as Q2 U.S. sales jump 7%, fueled by record EV and crossover demand (GM)
General Motors (GM) is rallying sharply higher after releasing its 2Q25 sales report, which showcased a robust 7% yr/yr sales increase, totaling approximately 746,588 vehicles. This performance underscores GM’s resilience in a challenging automotive market, driven by strong product execution and sustained customer demand across its diverse portfolio of internal combustion engine (ICE) vehicles and electric vehicles (EVs). The company also maintained consistent pricing and low incentives despite macroeconomic uncertainties and potential tariff concerns.
- The Chevrolet brand, GM’s volume leader, posted a 6% sales increase in Q2, driven by record-breaking crossover and EV sales that reinforced its position as a market favorite. The Chevrolet Equinox, encompassing both ICE and EV variants, achieved its best-ever sales quarter, with the Equinox EV alone moving 17,420 units, a standout performance in its first full year on the market. The Chevrolet Trax continued its upward trajectory, with sales momentum from its affordable subcompact SUV positioning, following an 84% annual increase in 2024 to 200,689 units. The Chevrolet Traverse also saw strong demand, driven by its redesigned 2024 model, indicating sustained consumer interest into Q2.
- GM’s electric vehicle segment was a standout, with EV sales surging 111% yr/yr to 46,280 units in Q2, securing a 16% U.S. EV market share and solidifying GM’s position as the second-largest EV manufacturer behind Tesla (TSLA). The Chevrolet Equinox EV led the charge as GM’s top-selling EV, followed closely by the Chevrolet Blazer EV with approximately 8,000 units sold. The Cadillac Lyriq also contributed significantly, with around 5,000 units sold, maintaining its status as the best-selling electric mid-size luxury SUV.
- These models, built on GM’s Ultium battery platform, have resonated with consumers seeking affordable and luxury EV options, with the Equinox EV’s sub-$35,000 starting price (before potential tariffs) broadening its appeal. GM’s EV growth, nearly doubling its market share from a year ago, reflects its strategic push toward electrification despite looming policy uncertainties.
- GMC and Buick also delivered impressive results, with GMC posting 6% sales growth in Q2, fueled by strong performances from the redesigned GMC Acadia, the Sierra pickup, and the Yukon SUV. Buick achieved a remarkable 19% sales growth, driven by the Buick Enclave, which saw a 46% sales increase in the first half of 2025, building on its 2024 momentum as consumers gravitated towards the Enclave’s redesigned appeal and competitive pricing.
GM’s Q2 U.S. sales performance reflects the company’s robust product lineup and strategic execution in a challenging business environment. Strong demand for models like the Chevrolet Equinox, Trax, Traverse, GMC Acadia, Sierra, Yukon, and Buick Enclave, alongside a 111% surge in EV sales, positions GM for continued growth, provided it navigates potential tariff and policy headwinds effectively.
Progress Software under pressure after Q2 results fall short of high expectations
Progress Software (PRGS -10%) is sharply lower today after reporting its Q2 (May) results last night. While there are some positives for this software provider, including a beat on EPS and raised FY25 guidance, investor reaction is negative as expectations were high following a strong Q1 (Feb). PRGS typically issues conservative guidance, so its 7% beat on EPS, its smallest in seven quarters, and its first revenue miss in 19 quarters, disappointed investors.
- Top-line performance was still strong for PRGS. While the EPS beat was smaller than in recent quarters, it still came in $0.06 above the upper end of guidance. Revenue landed at $237.36 mln, which was basically in line with expectations. That said, revenue grew 35.6% yr/yr, its strongest in 15 quarters and up nicely from 28.9% in Q4 (Nov).
- Furthermore, ARR grew 46% yr/yr to $838 mln, which management feels is the best barometer of top-line performance. Net retention rate again came in at 100%, reflecting predictability and resilience in PRGS's top line.
- Guidance for Q3 (Aug) is roughly in line with analyst expectations, with expectations at the lower end of the midpoint of guidance. PRGS modestly raised its FY25 EPS guidance despite the $0.10 Q2 beat. In fact, it didn't raise it enough to account for the beat.
- Regarding PRGS's acquisition of ShareFile, integration remains ahead of schedule, with most key operational synergies completed. ShareFile adds a high-quality SaaS component that now accounts for over a quarter of total revenue. Building on that, PRGS announced the acquisition of Nuclia last night.
- The acquisition of Nuclia is not like some of PRGS's most recent acquisitions in that it is primarily driven as an investment in its product portfolio with benefits to its data platform business. That said, it's a relatively small acquisition and is not expected to have a material impact on FY25 results, potentially falling short of investor expectations.
Overall, the performance this quarter did not exceed investor expectations enough to warrant a positive reaction. The smaller-than-usual EPS beat and the modest bump in FY25 EPS guidance fed into the disappointment. Additionally, while the Nuclia acquisition adds to the product portfolio, its limited near-term impact likely fell short of investor expectations, contributing to the underwhelming reaction in the stock.
MSC Industrial beats Q3 EPS expectations, shares surge on pricing strength and volume gains (MSM)
MSC Industrial Supply Co. (MSM) reported 3Q25 results that modestly exceeded expectations, driven by strategic share buybacks, improved pricing discipline, and modest volume growth, which collectively offset broader market challenges. Despite a yr/yr revenue decline of 0.8%, the company’s performance reflects resilience in a softening industrial environment, with cost management and operational efficiencies providing a buffer to profitability.
- Average daily sales (ADS), a critical metric for MSM, declined 0.8% yr/yr in Q3, slightly better than the midpoint of the company’s prior guidance range. For Q4, MSM projects ADS growth of -0.5% to +1.5%, signaling a potential inflection point as industrial demand stabilizes. This anticipated improvement is driven by strengthening core customer engagement, particularly in metalworking and MRO (maintenance, repair, and operations) segments, alongside growing traction in high-touch solutions like vending and in-plant programs.
- Easing macroeconomic headwinds and targeted sales initiatives are also contributing to this cautiously optimistic outlook, though risks from industrial sector volatility remain.
- The company is making tangible progress in its three strategic pillars: reenergizing the core customer through enhanced sales efforts, maintaining leadership in high-touch solutions that deepen client relationships, and optimizing cost-to-serve through operational streamlining. These efforts are beginning to translate into improved order trends and customer retention, positioning MSM to capitalize on any industrial recovery while building a foundation for sustainable growth.
- However, challenges persist, as adjusted EPS fell 18.8% yr/yr, reflecting ongoing pricing pressures and a competitive industrial landscape. The non-GAAP operating margin contracted to 9.0% from 11.4% in the prior-year period, driven by lower gross margins and higher operating costs relative to revenue. While MSM’s focus on cost optimization and productivity initiatives mitigated some of the impact, the margin compression underscores the need for further operational leverage to restore profitability to historical levels.
MSM’s Q3 results and reaffirmed FY25 guidance, including free cash flow conversion of ~120% and capital expenditures of $100-$110 mln, highlight a company navigating a challenging industrial environment with measured progress. The reaffirmed commitment to achieving mid-teens operating margins, coupled with sequential improvements in core customer metrics and high-touch solutions, suggests building momentum that could drive stronger performance if macroeconomic conditions cooperate.
Tesla shares slide as Trump targets Musk's EV subsidies in public spat (TSLA)
President Donald Trump's public criticism of Tesla (TSLA) CEO Elon Musk, in response to Musk’s threat to unseat legislators supporting Trump's spending bill, is significantly pressuring TSLA's stock. Trump highlighted the substantial subsidies Musk’s companies, including TSLA, receive, suggesting that the Department of Government Efficiency (DOGE), co-led by Musk, should scrutinize these benefits. This high-profile feud introduces political risk, raising concerns among investors about potential regulatory retaliation, such as the elimination of EV tax credits, which could erode TSLA’s competitive pricing advantage.
- The personal nature of the conflict, amplified by Trump's comments implying TSLA’s reliance on subsidies for survival, has sparked fears of broader policy shifts targeting Musk’s business empire. This political uncertainty undermines investor confidence, particularly given TSLA’s high valuation. Shares of TSLA are currently trading with a forward P/E north of 160x.
- Compounding this pressure, JPMorgan issued a cautious note yesterday, reiterating an Underweight rating on TSLA with a $115 price target, citing a likely delivery shortfall for Q2. The firm’s checks indicate that the softer demand observed in 1Q25, where TSLA delivered only 336,681 vehicles -- its worst performance since 2Q22 -- has persisted into 2Q25.
- Key factors dampening demand include Musk’s polarizing political involvement, particularly his role in DOGE and his support for right-wing policies, which have fueled consumer backlash and boycotts, notably in Europe and key U.S. markets like California. Additionally, TSLA faces intensified competition from rivals like BYD (BYDDY) in China and a broader slowdown in EV demand as consumers await a refreshed Model Y and an affordable next-generation vehicle, both delayed from earlier timelines.
- The combination of these negative developments has halted TSLA’s recent stock rally, which was driven by enthusiasm surrounding the June 22, 2025, Robotaxi launch in Austin, Texas. The robotaxi program, initially seen as a transformative growth driver, has faced some scrutiny due to early reports of erratic vehicle behavior, such as phantom braking and traffic violations, attracting attention from the National Highway Traffic Safety Administration.
- Still, investor optimism about TSLA’s AI and autonomous driving prospects had pushed the stock up by about 58% from its April lows through late June, but the Musk-Trump feud and delivery concerns are erasing some of these gains.
The tables have turned since the November 2024 election when Musk’s close alliance with Trump fueled a 169% surge in TSLA’s stock through mid-December. The souring relationship now poses a significant overhang, amplifying risks of subsidy cuts and regulatory scrutiny, while TSLA grapples with reigniting growth through new vehicle launches and robotaxi expansion amidst weakening demand and competitive pressures.
Home Depot's SRS to acquire GMS for $4.3 bln, strengthening professional contractor segment (HD)
Through its wholly owned subsidiary, SRS Distribution, Home Depot (HD) announced that it will acquire GMS Inc. (GMS) for approximately $4.3 bln, with SRS commencing a tender offer to purchase all outstanding shares of GMS at $110/share in cash. The news has driven GMS shares sharply higher, with the acquisition price representing a 14% premium to last Friday's closing price. On June 19, the Wall Street Journal broke a story that HD was aiming to make an offer for GMS, which sent the stock rocketing higher.
This acquisition also follows reports of a competitive bidding environment, with QXO Inc. (QXO) previously offering $95.20/per share, valuing GMS at $5 bln, and unconfirmed speculation of an earlier HD bid.
- GMS is a specialty distributor of building products, focusing on wallboard, ceilings, steel framing, and complementary construction products, operating over 320 distribution centers and nearly 100 tool sales, rental, and service centers across the United States and Canada. Its primary end markets include commercial and residential construction, serving contractors, builders, and professional remodelers. GMS’s business aligns seamlessly with SRS Distribution’s portfolio, which specializes in roofing, siding, and other exterior building products for professional contractors.
- The acquisition enhances SRS’s product offerings by adding GMS’s interior-focused product lines, creating a more comprehensive platform for professional customers. For HD, this bolsters its fast-growing professional business, which has been a strategic priority since the $18.25 bln acquisition of SRS in 2024. By integrating GMS’s network and expertise, HD strengthens its position in the $950 bln professional contractor market, diversifying beyond its core retail business and capturing higher-margin, recurring revenue from professional clients.
- GMS reported FY25 net sales of $5.5 bln, with a marginal yr/yr increase, though organic sales declined 5.4% on a same-day basis. At a P/E ratio of 34.3x, the acquisition price is significantly above GMS’s historical averages, suggesting a lofty valuation. However, the 9.7x trailing twelve-month EBITDA multiple (based on QXO’s $5 bln offer) is reasonable within the context of strategic acquisitions in the specialty distribution sector. Given GMS’s stable cash flows and market position, the premium appears justified to secure a leading player in a fragmented market, though it may reflect competitive bidding pressure from QXO.
- For HD, the immediate financial impact of the GMS acquisition is unlikely to significantly move the revenue needle, given its massive $153 bln in trailing twelve-month revenue. GMS’s $5.5 bln in sales represents roughly 3.6% of HD’s top line, suggesting a modest contribution to overall revenue. The deal’s impact on earnings accretion remains uncertain, as potential margin dilution due to GMS’s lower-margin profile compared to HD’s core operations could create a headwind.
Overall, the acquisition aligns with HD’s strategy of expanding its professional contractor ecosystem, following prior acquisitions like HD Supply and SRS, which could drive long-term synergies through cross-selling opportunities and operational efficiencies. The addition of GMS strategically strengthens its professional contractor business by adding a leading distributor of interior building products, enhancing its competitive position. While near-term earnings accretion may be limited, the deal enhances HD’s scale in the professional segment, potentially boosting profitability over time as integration matures.
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