Market Snapshot
| Dow | 44458.30 | +217.54 | (0.49%) | | Nasdaq | 20611.34 | +192.87 | (0.94%) | | SP 500 | 6263.26 | +37.74 | (0.61%) | | 10-yr Note |
|
|
|
| | NYSE | Adv 1773 | Dec 1001 | Vol 1.08 bln | | Nasdaq | Adv 2935 | Dec 1583 | Vol 10.0 bln |
Industry Watch
| Strong: Communication Services, Utilities, Technology, Consumer Discretionary, Industrials |
| | Weak: Consumer Staples, Energy, Real Estate |
Moving the Market
President Trump sends additional tariff letters today, but recipients are not major trading partners
Resistance near last week's record highs
Mega-cap outperformance
Rate cut optimism
|
Closing Stock Market Summary
09-Jul-25 16:25 ET
Dow +217.54 at 44458.30, Nasdaq +192.87 at 20611.34, S&P +37.74 at 6263.26
[BRIEFING.COM] The stock market started today on a higher note, following the lead of NVIDIA (NVDA 162.88, +2.88, +1.80%), which topped a $4 trillion market capitalization. The S&P 500 quickly ran into resistance as it moved up toward last week's highs, but it eventually regrouped and marched steadily higher in the afternoon, supported by falling interest rates.
The 2-yr note yield dropped five basis points to 3.86%, and the 10-yr note yield fell eight basis points to 4.34%. Any inflation angst that one might associate with the tariff letters that have been sent this week was set aside today. Participants continued to operate on the assumption that better trade deals will be struck and that the tariff actions won't lead to untenable inflation rates or to much weaker growth.
Accordingly, the bull market action persisted, accented by the inclination to buy on weakness, the leadership of the mega-cap stocks, and a broadening out of the buying interest.
NVIDIA provided the lead headline today, but it was not the biggest gainer among the mega-cap cohort. That distinction belonged to Broadcom (AVGO 277.90, +6.10, +2.24%). Other key supports included Meta Platforms (META 732.78, +12.11, +1.68%), Amazon (AMZN 222.54, +3.18, +1.45%), Alphabet (GOOG 177.66, +2.50, +1.43%), and Microsoft (MSFT 503.51, +6.89, +1.39%), the latter of which was upgraded to Outperform from Perform at Oppenheimer.
Their showing powered the Nasdaq Composite to a record high and kept the market cap-weighted S&P 500 on positive ground throughout today's trade. Elsewhere, the small-cap stocks had another good day. The Russell 2000 rose 1.1%. Mid-cap stocks were also on the move, but the S&P Midcap 400 Index registered a more modest 0.5% gain.
The drop in market rates contributed to those advances, providing a tailwind for growth stocks and an added boost for rate-sensitive plays like the homebuilding and utilities stocks.
Market breadth favored advancers by a roughly 8-to-5 margin at the NYSE and by a 7-to-4 margin at the Nasdaq.
The S&P 500 utilities sector (+1.0%) was today's best-performing sector, followed by information technology (+0.9%), communication services (+0.9%), industrials (+0.7%), and consumer discretionary (+0.7%). The only sectors losing ground were the real estate (-0.02%), energy (-0.5%), and consumer staples (-0.6%) sectors.
Today's action included Merck's (MRK 83.71, +2.34, +2.88%) news that it is acquiring Verona Pharma (VRNA 104.77, +17.91, +20.62%) in a $10 billion deal, several more inconsequential trading partners receiving tariff letters, a solid 10-yr note auction, and the release of the FOMC Minutes for the June 17-18 meeting, which conveyed a stronger expectation of rate cuts before the end of the year than no rate cuts at all.
- Nasdaq: +6.7% YTD
- S&P 500: +6.5% YTD
- DJIA: +4.5% YTD
- S&P 400: +2.0% YTD
- Russell 2000: +1.0% YTD
Reviewing today's economic data:
- MBA Mortgage Applications Index +9.4% (prior +2.7%)
- May Wholesale Inventories -0.3% (Briefing.com consensus: -0.3%) following downwardly revised 0.1% increase (from 0.2%) in April
Consumer staples lags
09-Jul-25 15:35 ET
Dow +192.65 at 44433.41, Nasdaq +168.54 at 20587.01, S&P +31.90 at 6257.42
[BRIEFING.COM] The stock market has been trending higher with participation broadening out beyond the mega-cap space.
However, the S&P 500 consumer staples sector is on the outside looking in at today's gains. Most components in the countercyclical sector are down in a session that has been more about taking on risk than avoiding it.
Hershey Foods (HSY 162.88, -7.04, -4.15%) is the weakest performer today, falling below its 50-day moving average (166.64). Estee Lauder (EL 86.53, +0.97, +1.13%), on the other hand, is bucking the sector trend and stands as today's top performing sector component.
For the week, the sector is down 1.7%, and it is up 4.3% for the year.
Plenty of green on stock monitors
09-Jul-25 15:00 ET
Dow +194.97 at 44435.73, Nasdaq +167.51 at 20585.98, S&P +30.80 at 6256.32
[BRIEFING.COM] There is an ample amount of green covering stock monitors today, as the majority of stocks are trading higher. That is an improvement from earlier when the action was more mixed and skewed largely in favor of the mega-cap stocks.
The mega-cap class continues to lead, yet small caps have turned in another good showing, with the Russell 2000 up 0.7%, and mid-cap stocks are playing along, with the S&P Midcap 400 up 0.3%.
Nine of the 11 S&P 500 sectors are higher. Only the energy (-0.8%) and consumer staples (-0.5%) sectors find themselves underwater.
Elsewhere, Treasuries have retraced their losses from earlier in the week, bolstered by rate-cut hope, signs of decent dollar demand at the 10-yr note auction, and the FOMC Minutes for the June meeting, which conveyed a stronger expectation of rate cuts before the end of the year than no rate cuts at all.
The 2-yr note yield is down five basis points to 3.86%, and the 10-yr note yield is down eight basis points to 4.34%. Those moves have afforded the rate-sensitive utilities sector (+1.0%) some relative strength today.
Stocks steady as FOMC Minutes show split on rate cuts, cautious inflation outlook
09-Jul-25 14:30 ET
Dow +153.25 at 44394.01, Nasdaq +153.94 at 20572.41, S&P +26.14 at 6251.66
[BRIEFING.COM] The major averages mostly held their lines following the release of the FOMC minutes which revealed a split among participants over the timing of rate cuts, with a couple open to reducing the federal funds rate as early as the next meeting, while others favored holding steady through year-end due to persistent inflation risks. Some noted the current policy rate may already be near its neutral level.
Inflation was viewed as likely to face upward pressure from increased tariffs, though the impact's timing and magnitude remain uncertain.
Participants acknowledged moderating wage growth and some signs of labor market softness, though most still saw overall economic and job conditions as solid.
Several expressed concern that immigration restrictions and rising tariffs could weigh on labor supply and demand. Overall, the Committee signaled a patient stance, awaiting more data before adjusting policy, though most agreed that some easing this year could be appropriate if inflation trends downward and economic conditions soften.
Treasury yields are little changed following the minutes, the yield on the 10-yr down about 6.5 basis points at 4.346%.
Gold edges up ahead of FOMC minutes as safe-haven demand offsets stronger dollar, yields
09-Jul-25 13:55 ET
Dow +135.80 at 44376.56, Nasdaq +129.62 at 20548.09, S&P +23.21 at 6248.73
[BRIEFING.COM] The FOMC minutes are due at the top of the hour.
Gold futures settled $4.10 higher (+0.1%) at $3,321/oz, as investors balanced fresh safe-haven demand against rising Treasury yields and a firmer dollar. The uptick came amid cautious market sentiment around possible delays in U.S. tariff actions, which lent some support to non-yielding assets, while firm bond yields, reflecting growing concerns over inflation and the Federal Reserve's likely delay of rate cuts, constrained more robust rallies.
Meanwhile, the U.S. Dollar Index is up +0.1% to $97.57.
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.
Kick off your portfolio as the FIFA Club World Cup heads into its final week
While many are familiar with the World Cup, the Club World Cup may be less well known. After its relaunch in 2005, it became an annual event until 2023. Now, in 2025, it has been revamped into a larger tournament featuring 32 teams from all six confederations, held every four years, similar to the World Cup format.
The 2025 Club World Cup is being hosted in the US. With the event in its final week and the highly anticipated 2026 World Cup taking place in the US as well, we thought it may be good to look at some companies that have a lot of exposure to these events.
- One clear beneficiary from these events is the suppliers of apparel and equipment. The majority of kit (uniforms, equipment etc.) providers in the Club World Cup are Nike (NKE), Adidas (ADDYY), and Puma. Adidas, which also provides the official match ball, has replicas available in stores and online. According to the FIFA website, the 57 licensed stores across the 12 venues sell replica kits, t-shirts, scarves, and related collectibles and memorabilia of the event. The venues have sold nearly 119,000 units, with T-shirts and club scarves among the best sellers.
- Sponsors have also benefited from the event. Coca-Cola (KO) has delivered almost 1 mln products and over 320 fridges to 70 key locations across the tournament. Additionally, Lenovo (LNVGY) has over 9,000 devices and accessories in use across all stadiums and tournament sites.
- Other industries to benefit include the hospitality industry. With the Club World Cup taking place across 12 states and 11 cities, and clubs from around the world participating, people from all places have an interest in these games. Companies like Marriot (MAR), Hilton (HLT), Hyatt (H), as well as other travel stocks like AirBnB (ABNB) are worth watching. Also travel websites like Expedia (EXPE) and Booking.com (BKNG). Hopefully, the Club World Cup will be able to offset some of the reduction we have seen from fewer foreigners visiting the US in 2025. So far, there have been more than 46,300 hospitality guests, with 44.2% of the sales to international clients, notably from the UK, Qatar, Saudi Arabia, and Brazil.
- On a final note, the event has generated a lot of buzz digitally. The FIFA website has seen 16 million unique visitors in June, more than in the previous 5 months. Additionally, the content posted across social media platforms has made 2.7 bln impressions, boosting visibility for sponsors and affiliated brands. This could be good for online ad companies like TTD and MGNI.
With the 2025 Club World Cup in its final stretch and the 2026 World Cup on the horizon, global enthusiasm for soccer is heating up. The companies helping to bring these events to life are likely to benefit from the excitement generated by these soccer events. Investors may want to keep an eye on these companies as there is likely to be positive commentary on the Q2 calls coming up in a few weeks.
Exxon Mobil braces for 2Q25 earnings hit as weak crude oil prices weigh on upstream results (XOM)
Exxon Mobil’s (XOM) disclosure of factors expected to impact its 2Q25 results highlights softer crude oil and natural gas prices as significant headwinds, driven by increased crude supply from OPEC+’s decision to unwind production cuts. Over the past three months, Brent crude prices have declined by over 10%, averaging around $67 per barrel, reflecting oversupply concerns and weaker global demand signals, exacerbated by OPEC+’s planned output hike.
Despite these pressures, XOM has partially offset the impact through robust production growth, particularly from its Permian Basin assets, bolstered by the $60 bln acquisition of Pioneer Natural Resources in May 2024. The company’s record Permian output, combined with strong performance in Guyana, has driven a 20% yr/yr increase in net production to 4.6 mln oil-equivalent barrels per day, providing a critical buffer against declining commodity prices.
- In its upstream segment, XOM anticipates a yr/yr earnings decline of $800 mln to $1.2 bln due to lower crude oil prices and a further $300 mln to $700 mln reduction from weaker natural gas prices. These projections reflect the challenging commodity price environment, with U.S. natural gas prices remaining volatile amid high inventories and subdued demand forecasts.
- For 1Q25, upstream non-GAAP earnings rose by $1.1 bln yr/yr to $6.8 bln, despite softer crude realizations, driven by a 767,000 oil-equivalent barrels per day production increase, primarily from the Pioneer acquisition’s contribution to Permian growth. This underscores XOM’s ability to leverage advantaged assets to mitigate price volatility, though the magnitude of 2Q25 price declines may outpace volume gains, pressuring segment profitability.
- The Energy Products segment, encompassing refining and fuels, is expected to see a modest earnings increase of $100 mln to $500 mln yr/yr in 2Q25, driven by improved industry refining margins. In 1Q25, this segment rebounded from a weak 4Q24, with earnings rising $425 mln qtr/qtr to $827 mln, fueled by stronger North American refining margins due to unplanned industry outages and favorable timing effects from derivatives.
- In 2Q25, refining margins continued to improve, supported by persistent supply constraints from maintenance turnarounds and geopolitical disruptions affecting global fuel markets, alongside steady U.S. demand for gasoline and diesel. However, the segment’s upside remains limited compared to the historically high margins of 2023, as new refinery capacity in Asia and Africa gradually comes online, potentially capping further gains.
- XOM’s structural cost savings program has been a critical factor in cushioning the impact of declining oil and gas prices, with cumulative savings reaching $12.7 bln since 2019, including $600 mln in 1Q25 alone. The company remains on track to achieve $18 bln in savings by 2030, outpacing peers and offsetting inflationary pressures and growth-related expenses. These efficiencies, combined with high-return investments in Permian and Guyana, have enhanced earnings resilience.
- However, the company’s adjusted EPS is still projected to decline 16% yr/yr to $6.58 for 2Q25, reflecting the significant drag from commodity prices. With Brent crude potentially facing further downside risk in 2025 due to global demand uncertainties and OPEC+ supply dynamics, XOM’s earnings estimates remain vulnerable.
Softening crude oil and natural gas prices pose a formidable headwind for XOM’s 2Q25 performance, a challenge shared across the oil and gas sector. While rising production from advantaged assets and ongoing structural cost reductions will mitigate these pressures, XOM’s earnings are still expected to contract, underscoring the persistent impact of commodity price volatility.
Skyworks has been buying back stock following previously-announced loss of Apple business (SWKS)
Skyworks Solutions (SWKS +4%) is a member of our YIELD leaders rankings, which focuses on companies that are good about returning cash to shareholders via share buybacks and dividends. Skyworks caught our eye because the stock has pulled back pretty aggressively in recent months, but management has been buying back stock at a good clip.
- The stock gapped lower in early February following its Q1 (Dec) report. The results were decent, but the bigger problem was Skyworks announcing that it was losing business with Apple (AAPL), its largest customer. The company explained that the last couple years have been challenging as the competitive landscape has intensified.
- Regarding the new iPhone launch expected this fall, Skyworks was able to secure multiple sockets, including several highly integrated RF modules. However, its content position is expected to be down 20-25%. This decline will start impacting revenue in Q4 (Sep) and throughout FY26. Analysts believe Broadcom (AVGO) is capturing this share with Apple.
- Looking ahead, Skyworks has already started developing a new suite of products for the next generation iPhone and it's continuing to pursue growth with its other mobile customers, although on a selective basis. Skyworks is focusing on those segments of the market that demand high performance RF. The company also noted that it continues to diversify, which should partially offset the revenue decline at Apple in FY26 and position the company for growth in FY27.
- The company also named a new CEO, Philip Brace, who took the helm in February 2025. Brace has extensive experience in the semiconductor, server, IoT and storage industries and has held various roles across software, hardware, engineering, marketing and sales. He served as executive chairman of Inseego since February 2024 and, before that, he was CEO of Sierra Wireless, where he led the company through significant operational improvements.
Clearly, the reduction in content in the iPhone was a big blow to Skyworks. It sounds like they are trying to reclaim some of that share, but that could be difficult to accomplish. Hopefully, it can recoup some of these losses with its other mobile customers. Also, Skyworks has exposure to other areas, including automotive, edge IoT, and Wi-Fi 7 adoption across consumer and enterprise devices. Hopefully, the new CEO can right the ship. In terms of share buybacks, the company has taken advantage of the pullback in its shares. In Q2 (Mar), it returned a record $600 mln to shareholders through share repurchases and dividends. |
