US equity markets reached new heights as gains in technology shares pushed the Nasdaq Composite up by 0.2% to close at 21,058, while the S&P 500 rose 0.1% to 6,363.4, recording a fourth consecutive record close. Optimism around artificial intelligence investments and robust quarterly results from Alphabet, showing strong double-digit revenue growth in cloud and services, fueled the rally.
However, market performance was uneven. Tesla shares fell 8.2% after disappointing earnings, dragging sentiment. The Dow Jones slipped 0.7%, and the Russell 2000 also declined. Energy stocks outperformed other sectors, whereas consumer discretionary names lagged.
Global market sentiment improves on trade hopes
Renewed hopes for progress on trade negotiations helped boost global equity markets. The Nikkei led gains across Asia, while European and South Korean markets also posted positive results. Optimism followed potential deals between the United States, the European Union, and South Korea, though the EU warned that tariffs on over 100 billion dollars worth of US goods remain on the table if talks break down.
Economic indicators send mixed signals
Fresh US economic data highlighted a slowdown in certain areas:
- New home sales came in weaker than expected, pointing to ongoing challenges in the housing sector.
- Manufacturing activity remained under pressure.
- Jobless claims suggested that hiring momentum continues to slow.
US Treasury yields ticked slightly higher, and the US dollar was largely stable despite these data releases.
Trump’s visit to the Federal Reserve
President Trump made an unusual visit to the Federal Reserve, pressing for steep interest rate cuts and criticizing the central bank’s 3.1 billion renovation project. Although tensions between Trump and Fed Chair Jerome Powell were evident, the president confirmed he has no intention to remove Powell from his position. Markets anticipate no change to interest rates in the upcoming policy meeting.
Latest market and economic developments
Below is a breakdown of key global market movements and economic highlights.
Asian market performance
Asian markets closed the week with gains despite a softer Friday session:
- Japan and Hong Kong posted strong weekly advances.
- China and Singapore also finished higher.
- South Korea saw limited movement.
- Australia declined due to profit-taking.
- India struggled with muted gains.
US market futures
US equity futures edged higher overnight following Thursday’s mixed results, with the S&P 500 and Nasdaq hitting record highs. Strong earnings from Alphabet continued to drive positive sentiment, while investors remain cautious after Tesla’s share price plunge. Attention now turns to the upcoming Federal Reserve meeting.
European market trends
European equities also posted moderate gains, with the STOXX 50 and STOXX 600 up 0.3 percent. Markets digested the European Central Bank’s decision to leave interest rates unchanged and welcomed signs of progress on potential tariff reductions between the EU and the US.
Currency and commodity updates
Currency markets:
The US dollar stayed close to two-week lows, marking its largest weekly loss in a month. The euro held firm at 1.175 dollars, near a four-year high, supported by trade optimism.
Oil prices:
Oil prices held steady in Asian trading on Friday after climbing more than 1 percent in the previous session, supported by easing US trade tensions and expectations of tighter Russian gasoline export controls. Brent crude was steady at 69.29 dollars a barrel, and WTI traded at 66.13 dollars. Hopes for further trade deals and limited US approval of Venezuelan oil operations also buoyed sentiment.
Key stock movers
Several companies saw significant price action due to earnings reports, analyst ratings, and strategic developments:
Notable earnings results
- Deckers Outdoor: Strong international sales of Hoka and UGG brands boosted net sales 16.9 percent to 964.5 million dollars despite 20 percent tariff-related cost pressures from Vietnam. International sales surged nearly 50 percent, offsetting a slight decline in the US. Second-quarter sales are expected to align with estimates.
- American Airlines: Shares dropped over 9 percent after issuing a wide earnings range for 2025, citing weak domestic demand. It expects adjusted earnings between a 20-cent loss and an 80-cent profit per share. Domestic revenue fell 6.4 percent while the international market remains strong.
- Chipotle: Shares fell 13 percent due to weaker quarterly results and a trimmed outlook despite aggressive digital marketing.
- TotalEnergies: Reported a 23 percent earnings drop from lower energy prices but announced 2 billion dollars in quarterly share buybacks and a 3 percent rise in hydrocarbon production for Q3.
- Deutsche Bank: Posted a strong 1.485 billion euro profit, driven by fixed-income trading gains.
- Puma: Lowered its 2025 outlook, forecasting losses from US tariffs that are expected to cut gross profit by 80 million euros.
- Blackstone: Distributable earnings rose 25 percent to 1.6 billion dollars, with assets under management at 1.2 trillion dollars.
- Honeywell: Delivered strong results with sales up 8.1 percent to 10.35 billion dollars and adjusted profit per share at 2.75 dollars, raising 2025 profit and revenue guidance, but shares fell 4.7 percent due to tariff-related concerns.
- Newmont: Surpassed profit estimates, aided by a 40 percent increase in average gold prices year on year despite an 8 percent production drop. Earnings came in at 1.43 dollars per share. The company also launched a 3 billion share buyback and continued asset divestments to reduce debt.
Key corporate updates
- Google Cloud: Secured a 1.2 billion deal with ServiceNow.
- McGraw-Hill: Made its NYSE debut at 17 dollars per share, valuing the company at 3.25 billion dollars. The IPO raised 415 million dollars, priced below its target range. Despite market uncertainty, McGraw-Hill remains a leading education publisher serving most US K-12 and higher education institutions.
- ASML: Upgraded to Buy by New Street Research with a 790 euro price target due to strong 2026 positioning and high exposure to leading-edge chipmaking, despite low visibility in wafer fab equipment spending.
- Spotify: Upgraded to Outperform by Oppenheimer with an 800-dollar target, citing forecasts of 75 million net new users annually through 2030 and 10 billion euros in ad revenue if Spotify narrows its free-tier gap.
- Tesla: Barclays maintained an Equal Weight rating, highlighting a growing gap between its AI narrative and weakening fundamentals. Risks include expiring US EV tax credits, tariffs, and lower regulatory credit sales.
- Alibaba and JD.com: Mizuho warned that rising competition in food delivery is squeezing margins, cutting Q2 EBITDA forecasts due to heavy subsidies. The bank maintained Outperform ratings but sees profitability delayed unless regulation curbs subsidies.
- Birkenstock: Goldman Sachs upgraded to Buy, citing strong pricing power, resilient margins, and global growth potential. It expects 15 percent annual EBIT growth and a 26 percent margin in 2025.
Upcoming data and events
Investors are watching:
- US durable goods orders data for insights into business spending.
- Germany’s IFO business sentiment index.
- Volkswagen’s Q2 earnings report will be closely analyzed for EV performance and profit margins.
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