Market Recap - Monday, July 28, 2025

US Stocks End Higher, Focus on Trade Deals and Earnings Ahead

Stocks ended Monday's session mostly higher, with the S&P 500 and Nasdaq achieving fresh record closes, marking their sixth straight day of gains. The Dow and Russell 2000, however, showed modest declines. The market's overall performance was influenced by positive earnings reports and trade deal developments, particularly the ongoing US-EU tariff agreement discussions. Certain sectors like energy, semiconductors, and airlines performed well, while others, including telecom, media, and pharma, lagged behind.

Treasuries were weaker, with yields up slightly across the curve. The dollar index rose by 1%, while gold finished down 1.1%. Bitcoin futures increased by 0.8%, and WTI crude oil climbed by 2.4%.

Key Drivers: Trade Deals, Earnings, and Fed Expectations

A significant focus remained on trade deals, with the US and EU nearing a final agreement on a 15% tariff rate for EU imports. The US and China also reportedly agreed to extend their tariff truce for another 90 days, easing some concerns. In terms of earnings, companies like Nike (NKE) and Tesla (TSLA) outperformed expectations, while Intel (INTC) and Cisco (CSCO) faced challenges.

Meanwhile, there was continued discussion about the Federal Reserve's stance on interest rate cuts, with the market still pricing in a higher chance of easing later in the year. There were also mixed economic data points, such as the weaker-than-expected durable goods orders and new home sales, which continue to show pressure on key parts of the economy.

Upcoming Events: Peak Earnings Week and FOMC Meeting

The market is gearing up for peak earnings season this week, with major tech companies like Meta (META), Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL) set to report their Q2 earnings. Additionally, the July FOMC meeting on Wednesday will be closely watched for any clues about future Fed rate cuts. Economic reports on consumer confidence, job openings, and GDP growth are also due this week, adding to the uncertainty about the health of the economy.

Here's Our Take

The market remains in a holding pattern, supported by solid earnings results and the ongoing resolution of trade tensions, particularly between the US and the EU. However, there are risks from ongoing tariff pressures and weaker housing data, which could weigh on growth in the coming months. Investors are awaiting key earnings results from major tech companies and the Federal Reserve's commentary this week, which could provide further direction. With earnings season peaking and trade talks continuing, the market may face increased volatility, but the resilience in US macro data and AI-related growth remains a key bullish factor.

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