Stocks closed mostly higher today, with the S&P 500 and Nasdaq hitting fresh record highs. However, the rally was uneven, with the S&P 500 just slightly above its previous close and the Nasdaq seeing a slight pullback from yesterday’s gains. The Dow and Russell 2000 closed lower. The rotation from growth to value stocks continued, with homebuilders, department stores, and housing-linked sectors leading the charge. Big tech stocks, like Nvidia (NVDA), had a tough day, and the energy and pharma sectors were among the worst performers.
Key Market Developments:
Growth vs. Value Rotation: The shift from growth to value stocks continued, but there was no clear catalyst for this. Market participants are positioning themselves ahead of earnings reports, and many traders are cautious about the upcoming earnings season.
Tariff Concerns: President Trump mentioned that the Philippines and Indonesia will face a 19% tariff, with the market still focusing on the broader trade situation, especially as the deadline for tariff decisions on August 1st approaches.
Economic Data: The Richmond Fed Index saw a significant drop, marking its weakest level since September 2024, signaling continued weakness in the manufacturing sector. However, housing data showed positive momentum, with June existing home sales coming in strong.
Notable Gainers:
Medpace Holdings (MEDP): +12.5% – The company beat earnings expectations and raised full-year guidance, sparking optimism.
IQVIA Holdings (IQV): +17.9% – Another solid earnings beat, raising full-year guidance and showing strength across its segments.
D.R. Horton (DHI): +17% – The homebuilder beat earnings and orders expectations, raising their buyback forecast for the year.
Verizon Communications (VZ): +4.0% – Verizon exceeded expectations, raising its full-year guidance for free cash flow.
Notable Decliners:
Bruker (BRKR): -12.1% – Missed earnings expectations due to weaker academic demand and struggles in the biopharma market.
Lockheed Martin (LMT): -10.8% – The aerospace giant reported missed earnings with significant program charges.
Sarepta Therapeutics (SRPT): -5.4% – The company faced a setback after the FDA put its trials on clinical hold, leading to a sharp drop in its stock.
Here's Our Take
The market saw a mixed day of trading with a shift from growth to value stocks and some mixed earnings reports. While big tech stocks like Nvidia and Lockheed Martin faced challenges, sectors like homebuilding and consumer goods showed strength. The ongoing tariff concerns, especially with the looming August 1st deadline, remain a key focus. Trade talks, particularly with the EU, continue to make headlines, but the broader market has largely priced in some level of uncertainty. The market’s path remains uncertain, but with strong consumer resilience and favorable earnings reports, there is cautious optimism for the months ahead. Keep an eye on the upcoming earnings reports, especially from big tech, as they will likely set the tone for the rest of the earnings season.
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