This content was published on

July 22, 2025 – 20:24

(Bloomberg) — Wall Street traders gearing up for the start of the megacap earnings season sent stocks wavering near a record, with investors also parsing the latest tariff developments. Treasury yields fell alongside the dollar.

About 400 shares in the S&P 500 rose even as the benchmark was little changed. A gauge of the “Magnificent Seven” big techs halted a nine-day advance before Tesla Inc. and Alphabet Inc.’s results. President Donald Trump unveiled a trade deal with the Philippines while Canada’s Prime Minister Mark Carney said he’s looking to stabilize the relationship with the US. D.R. Horton Inc. led a rally in homebuilders. Kohl’s Corp. soared 40%.

Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.    

“Fading momentum in technology weighs on the major benchmarks, but breadth is strongly positive,” said Jose Torres at Interactive Brokers. “The bifurcation illustrates how significant the performance of the Magnificent Seven is for the overall equity market.”

That “overreliance” is contributing to Wall Street tilting towards a defensive posture today, as participants scoop up Treasuries, Torres also noted.

Treasury Secretary Scott Bessent said he will meet his Chinese counterparts in Stockholm next week for their third round of trade talks aimed at extending a tariff truce and widening the discussions. He predicted a “rash” of trade deals between now and the Aug. 1 deadline.

Bessent told Fox Business he sees no reason for Federal Reserve Chair Jerome Powell to step down. Meantime, Trump stressed his belief that the Fed’s benchmark rate should be 3 percentage points lower. Bessent, in the same Oval Office event, said that “based on the way they cut rates last fall, they should be cutting rates now.”

“We expect market volatility to pick up in the lead-up to the August tariff deadline, with threats to Federal Reserve independence and geopolitical uncertainty lingering in the background,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

Meantime, big tech’s strength will be on full display over the next few weeks as they begin unveiling their quarterly earnings. Two of this year’s laggards among the Magnificent Seven — Tesla and Alphabet — are on deck Wednesday.

The lion’s share of S&P 500 earnings growth continues to come from beneficiaries of advancements in artificial intelligence. 

The Magnificent Seven companies are expected to post a combined 14% rise in second-quarter profits, while earnings for the rest of the US equity benchmark are predicted to be relatively flat, according to Bloomberg Intelligence data.

“We expect solid earnings growth from big tech coupled with significant spending on artificial intelligence infrastructure by the hyperscalers,” said Richard Saperstein at Treasury Partners. “This AI spending and investment is set to support future earnings growth.”

Saperstein said most of the Magnificent Seven should continue leading the market due to impressive earnings growth, copious levels of cash flow and continued demand for their businesses. 

“The AI tailwinds are in the early innings, and are set to benefit the biggest players in tech the most,” he added.

“Tech heavyweights remain critical to market health,” said Lauren Goodwin at New York Life Investments. “We expect AI-driven firms to continue anchoring tech sector growth. AI adoption at the corporate level is improving, but the application layer of this technology is only just being tested.”

Read: Alphabet Earnings Optimism Outweighs Looming Antitrust Risks

Bank of America Corp. clients were net buyers of US equities in the week ended last Friday, with purchases most pronounced among individual investors, followed by hedge funds.

BofA clients funneled $1.8 billion into US stocks last week, with buying across all size segments, the team led by equity and quantitative strategist Jill Carey Hall wrote Tuesday in research note.

“Is this running of the bulls with the S&P 500 and Nasdaq at record highs sustainable?” said Craig Johnson at Piper Sandler. “The weight of the technical evidence suggests that breadth remains bullish and we would welcome ‘healthy’ pullbacks of less than 5% to add to positions.”

What Bloomberg Strategists say…

“An ugly start to US equity trading is far from across the board. The frothier tech and growth stocks are leading declines, but value stocks and defensive sectors are up on the day still. Coupled with the decline in bond yields, this looks like the market paring a little risk, perhaps ahead of Tesla and Alphabet earnings on Wednesday.” – Sebastian Boyd, Macro Strategist, Markets Live. 

For the full analysis, click here.

Corporate Highlights:

Microsoft Corp. accused Chinese state-sponsored hackers of using flaws in its SharePoint document management software in a hacking campaign that has targeted businesses and government agencies around the world.Hershey Co. is raising prices on its candy due to historically high cocoa costs. OpenAI and Oracle Corp. announced they will develop 4.5 gigawatts of additional US data center capacity in an expanded partnership, furthering a massive plan to power artificial intelligence workloads.Lockheed Martin Corp., the world’s largest defense contractor, reported earnings that missed analyst estimates, lowered its outlook for the year and racked up $1.6 billion in charges.Northrop Grumman Corp. raised its earnings guidance for the full year after getting a boost from its Sentinel ballistic missile and B-21 bomber programs.RTX Corp. lowered its full-year profit outlook as the company digests the impact of tariffs that have roiled the aerospace industry, even as strong demand boosts sales above Wall Street’s expectations.General Motors Co. earned $2.53 per share on an adjusted basis, above the Bloomberg consensus forecast of $2.33 but short of the $3.06 it made a year ago. GM’s profits also suffered from higher warranty costs and a buildup in inventory of electric vehicles.Coca-Cola Co. posted second-quarter sales growth that beat Wall Street expectations as consumers continue to pay higher prices for the company’s soft drinks.Philip Morris International Inc.’s shipments of its Zyn nicotine pouches accelerated by less than analysts had expected.Synovus Financial Corp., a regional bank in the southeastern US, is weighing options including a potential merger after drawing interest, people familiar with the matter said.Oscar Health Inc. slashed its guidance and reported preliminary results below Wall Street estimates, the latest health insurer to be rocked by trouble in Affordable Care Act marketplaces.Sarepta Therapeutics Inc. announced that the company plans to temporarily pause all shipments of its gene therapy to treat Duchenne muscular dystrophy, Elevidys, in a reversal of its prior stance.ASM International NV’s second-quarter orders missed expectations due to lower bookings from its advanced logic/foundry business segment.Nokia Oyj cut its profit guidance for the year, citing a weaker US dollar and tariffs.

Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 2:23 p.m. New York timeThe Nasdaq 100 fell 0.5%The Dow Jones Industrial Average rose 0.3%The MSCI World Index was little changedBloomberg Magnificent 7 Total Return Index fell 0.5%The Russell 2000 Index rose 0.8%

Currencies

The Bloomberg Dollar Spot Index fell 0.4%The euro rose 0.4% to $1.1745The British pound rose 0.2% to $1.3523The Japanese yen rose 0.6% to 146.55 per dollar

Cryptocurrencies

Bitcoin rose 2.1% to $119,459.87Ether fell 1.6% to $3,699.24

Bonds

The yield on 10-year Treasuries declined five basis points to 4.33%Germany’s 10-year yield declined two basis points to 2.59%Britain’s 10-year yield declined three basis points to 4.57%

Commodities

West Texas Intermediate crude fell 1.3% to $66.30 a barrelSpot gold rose 1% to $3,430.26 an ounce

©2025 Bloomberg L.P.