Global equity markets began the week on a cautious note, with U.S. indices showing modest movements and investors anticipating a flurry of corporate earnings and monetary policy updates. While the S&P 500 and Nasdaq both posted record closes, the Dow Jones edged slightly lower.
Key drivers behind Monday’s market moves
Markets opened with cautious optimism on Monday, particularly in the tech sector. However, gains moderated as investors became more conservative ahead of the start of earnings season and upcoming central bank commentary.
Tech stocks lift Nasdaq and S&P 500
Alphabet shares climbed more than 2.5% ahead of its earnings release on Wednesday, giving the technology sector a noticeable boost. Tesla is also slated to report the same day, kicking off earnings season for the high-profile “Magnificent Seven” group.
Bond yields fall amid cooling inflation
Yields on U.S. Treasuries retreated following weaker-than-expected June inflation figures. The 10-year Treasury yield dropped to around 4.38%. With inflation moderating and the Federal Reserve maintaining a cautious stance, markets are increasingly pricing in a potential interest rate cut before the year ends.
European markets mixed as trade uncertainty persists
European stocks opened the week in a tight range, with the STOXX 50 and STOXX 600 barely moving. Uncertainty over potential new U.S.-EU tariffs continues to weigh on sentiment. However, strong performances from BP, which gained 0.6% on leadership news, and Ryanair, which jumped over 5% on strong quarterly earnings, helped offset weakness in the auto sector. Stellantis fell 1.7% after projecting a €2.3 billion net loss in the first half of the year.
Q2 earnings season shows early strength
Corporate earnings are off to a strong start this quarter, providing positive signals amid broader macro uncertainty.
Financials lead gains
So far, 86% of S&P 500 companies reporting have beaten expectations. Financial firms are leading the way, benefiting from strong trading revenues and capital markets activity. While earnings growth forecasts had been revised lower in recent months, current results suggest full-year growth could reach the mid to high single digits.
Trade and tariff effects are still contained
Despite lingering concerns about tariffs, inflation, and consumer spending, remains resilient. Businesses have been mitigating cost pressures through stockpiling, absorbing costs, and benefiting from lower energy prices. Hopes for progress in trade policy may further stabilize the outlook moving forward.
Asia, Europe, and US futures hold steady amid event risks
Tuesday’s session reflected investor caution across major global markets, with geopolitical and economic updates in focus.
Asia trades cautiously
Asian markets traded in narrow ranges. Japan saw volatility following the ruling coalition’s loss of its upper house majority. Chinese, Hong Kong, and South Korean stocks edged down, while Australia and India held steady.
US equity futures are stable
Futures for major U.S. indices remained flat after a choppy Monday. The S&P 500 and Nasdaq hit record highs, boosted by tech gains, before easing. Key earnings from Coca-Cola, Philip Morris, and Lockheed Martin are expected to influence investor mood. Attention is also focused on Federal Reserve Chair Jerome Powell’s speech, which may signal upcoming changes in monetary policy.
Europe opens flat
European markets were subdued amid ongoing U.S.-EU tariff discussions. Stellantis dropped 1.7% after forecasting a €2.3 billion first-half loss, with €300 million in tariff-related costs already incurred and expectations of doubling that figure in H2. On the upside, Ryanair surged more than 5% on strong earnings, and BP gained 0.6% on leadership updates.
Currency and commodity updates
Traders kept a close eye on major currency pairs and energy prices amid shifting global trade dynamics.
USD and EUR in focus
The U.S. Dollar Index hovered below 98 after a two-day dip, while EUR/USD steadied near 1.1690, supported by dollar softness and investor caution ahead of Powell’s remarks. Treasury Secretary Scott Bessent hinted at flexibility in the August 1 tariff deadline, fueling some market optimism. Separately, Bessent also called for major reforms to the financial regulatory system, criticizing the dual capital requirements of the Biden era and proposing relief for smaller banks to support lending and growth.
Oil prices ease
Crude prices dipped slightly in Asian trade, with Brent and WTI down 0.5%. EU sanctions on Russia had minimal impact on global supply, while broader trade tensions between the U.S. and the EU dampened sentiment. Analysts warned that continued tariff escalations could impact global oil demand, although current sanctions are unlikely to reduce Russian exports significantly.
Notable stock movers
A number of individual stocks saw significant price moves driven by earnings, analyst calls, and macro developments.
Ryanair
Ryanair’s Q1 profit more than doubled to €820 million, driven by stronger last-minute fares and favorable Easter timing. Despite industry-wide fare softness, the airline remains optimistic and is seeking exemption from U.S. tariffs on Boeing aircraft.
Verizon
Shares jumped 4% as Verizon raised its annual profit forecast. Strong demand for premium wireless plans and a $20 billion acquisition of Frontier Communications helped offset a surprise loss of 9,000 wireless subscribers. Broadband growth and fiber-optic investments supported performance.
Domino’s Pizza
Domino’s beat U.S. same-store sales expectations with a 3.4% increase in Q2. Strong digital orders and third-party delivery contributed to growth, although rising ingredient costs cut gross margins by 2% for U.S. company-owned stores.
Stellantis
Stellantis reported a €2.3 billion H1 loss due to U.S. tariffs and restructuring costs, including cancelled projects. Tariff costs totaled €300 million so far and are expected to double in the second half of the year. CEO Antonio Filosa expressed confidence in gradual improvement despite external headwinds.
Other movers
Equinix rose 1.5% after Elliott Investment Management increased its stake, following a sharp equity sell-off triggered by unexpected capital expenditure news. Elliott is reportedly in talks with the company, betting on growing AI-related data centre demand.
BP came under pressure from Elliott, which urged new Chairman Albert Manifold to address operational issues urgently. The activist investor cited recent cuts in renewables spending and a declining share price, which have fueled takeover and break-up speculation.
Royal Caribbean was downgraded to Hold by Truist Securities due to record-high valuation and weakening bookings. While Truist raised its price target to $337, the firm noted that 2026 earnings may no longer justify a Buy rating.
General Motors received a Buy rating from Benchmark, which highlighted GM’s $24 billion in cash reserves, strong free cash flow, and measured EV expansion in the U.S. Despite tariff risks, the firm sees GM as operationally efficient and undervalued.
Pinterest was upgraded to Overweight by Morgan Stanley, citing improved macro conditions and reduced China tariff risks. Amazon remains Morgan Stanley’s top pick, driven by AWS growth. Alphabet is favored over Meta due to valuation and stronger AI monetization. The firm also forecasts a sharp rise in overall data center spending among major tech players.
OpenAI and SoftBank’s Project Stargate, a proposed $500 billion AI infrastructure plan, has stalled, according to the Wall Street Journal. No data center deals have been finalized, and the plan has been scaled back to a single smaller facility in Ohio by the end of 2025. SoftBank, which pledged $30 billion, remains OpenAI’s largest backer alongside Microsoft.
What’s next for investors
Key data and events scheduled for today could provide direction for markets in the short term.
Today’s highlights
Key earnings today include Coca-Cola, Philip Morris, and Raytheon Technologies. Fed Chair Jerome Powell’s speech is expected to provide critical insight into potential rate decisions, influencing market sentiment for the days ahead.
Disclaimer: This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. The information does not take into account your personal circumstances and is provided to you on the express understanding that it does not constitute advice and should not be relied upon in making any investment decision. Investing in financial instruments involves risk. You should conduct your own research before making any investment decisions and seek the assistance of a licensed financial advisor if you are unsure. No person should act on any opinion or information contained in this document without first obtaining appropriate professional advice. Calamatta Cuschieri Investment Services Limited does not accept liability for any actions, proceedings, costs, demands, expenses, damages, or losses suffered as a result of reliance on the information herein.
