Positive momentum in US markets despite cautious end to the week
US stock markets wrapped up the week with moderate gains, although the final trading session showed signs of fatigue. The S&P 500 and Nasdaq Composite both notched new intraday highs before retreating slightly, while the Dow Jones Industrial Average edged marginally lower. Renewed trade tension between the US and the European Union, with President Trump reportedly seeking tariffs of at least 15-20%, introduced caution into markets ahead of a key August 1 deadline.
Despite this geopolitical uncertainty, investor optimism remained resilient. Stronger-than-expected retail sales, declining jobless claims, and a five-month high in consumer sentiment painted a picture of continued economic strength. Meanwhile, inflation expectations eased, and dovish remarks from Federal Reserve Governor Waller fuelled speculation that interest rate cuts could arrive sooner than expected.
Sector and index performance
Over the week, the S&P 500 climbed 0.6%, ending just below Thursday’s all-time high. Optimism surrounding the economic outlook and robust corporate earnings underpinned sentiment. Technology stocks led gains, supported by defensive sectors such as utilities, while energy and materials lagged due to falling oil prices and mixed sector earnings.
Shifting focus to Federal Reserve policy
The latest data continues to support a “Goldilocks” economic narrative – steady growth without excessive inflation – but questions remain regarding the timing and scale of any Fed rate adjustments. Markets currently price in a strong likelihood of rate cuts in September, although some policymakers hint at earlier action.
Global market roundup
Global equity markets showed mixed results to start the week, influenced by policy decisions, earnings expectations, and geopolitical developments. Below is a breakdown by region:
Asia: Mixed performance with China and Hong Kong leading
Asian equity markets opened the week on a mixed note. Chinese and Hong Kong stocks led regional gains after the People’s Bank of China maintained its record-low lending rates. South Korea and Singapore also advanced, the latter reaching a fresh record high. However, Australian shares slipped 1%, weighed by profit-taking and trade-related uncertainty. Trading in Japan was muted due to a national holiday.
Europe: Cautious sentiment amid trade talks
European equities ended last Friday on a weaker note as initial gains reversed. The STOXX 50 fell 0.3%, while the STOXX 600 closed marginally below the flat line. Technology, luxury, and automotive sectors were among the weakest, with names like ASML, LVMH, and Mercedes under pressure. In contrast, Vivendi and Saab surged over 13% and 16%, respectively, on positive company-specific developments.
US futures: Earnings take center stage
US equity futures edged higher late Sunday, with investors eyeing a week loaded with corporate earnings from major firms such as Alphabet and Tesla. Verizon and Domino’s Pizza are also set to report. So far, 86% of reporting S&P 500 companies have beaten analyst expectations, reinforcing the positive sentiment.
Currency and commodities
Markets are watching currencies and energy markets closely, with dollar strength, euro fluctuations, and oil price stability being shaped by policy expectations and trade-related news.
USD and EUR stay range-bound
The US dollar index remained steady near 98.4, supported by Fed rate cut expectations and persistent trade tensions. The euro rose slightly, with EUR/USD trading around 1.1621, as investors weighed potential dollar softness against geopolitical developments in Japan and global trade concerns.
Oil prices hold steady
Oil prices were largely unchanged in Asian trading. Brent crude hovered around $69.27, and WTI at $67.44 per barrel. Traders remain cautious amid new EU sanctions on Russian oil and potential demand impact from US tariffs. Analysts anticipate a trading range of $64–$70 for the week ahead.
Key equities in the spotlight
Several major companies experienced notable share price moves, driven by earnings, analyst calls, and regulatory developments. Here are the key highlights:
Microsoft issues security patch amid cyber threats
Microsoft released a security update addressing a vulnerability in SharePoint Server, following reports of cyberattacks targeting on-premise versions used by global organizations. SharePoint Online remains unaffected.
Nvidia faces supply constraints in China
Nvidia notified Chinese clients of the limited availability of its H20 AI chip, following halted production due to April’s US export ban. Production may take up to nine months to resume. In response, the company is developing a compliant RTX Pro GPU tailored for the Chinese market.
Invesco shares soar on fund structure shift
Invesco Capital Management surged 13% after proposing to convert the Invesco QQQ Trust Series 1 into an open-ended fund. This could increase Invesco’s revenue stream, shifting fees away from BNY Mellon and Nasdaq. Shares in Nasdaq fell slightly on the news.
Porsche targets further cost cuts
Facing slowing sales in China and high US import tariffs (27.5%), Porsche’s CEO is initiating a second phase of cost-reduction plans. The company had previously announced 1,900 job cuts by 2029 following a lacklustre market performance post-IPO.
Block Inc added to S&P 500
Block Inc. gained 8.5% after being selected to join the S&P 500, replacing Hess Corp post-Chevron acquisition. The change takes effect on July 23, 2025, prompting index-tracking funds to rebalance holdings. In contrast, Robinhood and Applovin dropped roughly 1% following their exclusion.
Sarepta Therapeutics shares crash
Sarepta Therapeutics saw its shares plummet by 36%, followed by an additional 5% drop in after-hours trading, after a patient death linked to its gene therapy trial. This led to new safety warnings and internal restructuring amid clinical and financial headwinds.
Microsoft price target lifted by BofA
Bank of America raised its target for Microsoft to $585, driven by cloud growth, AI Copilot adoption, and strong feedback ahead of Q4 earnings. Despite rising capital expenditures, Microsoft remains BofA’s top tech pick.
Chipotle upgraded on margin recovery expectations
BMO Capital Markets upgraded Chipotle Mexican Grill to “Outperform” with a target price of $65, expecting a rebound in same-store sales and improved margins in the second half of 2025. Easing food costs and better efficiency are expected to drive this recovery.
Citi sees challenges for European banks
Citi analysts forecast weaker performance from European banks compared to US peers, citing FX headwinds, regional market conditions, and lower investment banking revenue. Barclays was downgraded to “Neutral” after a 125% surge in share price.
What to watch this week
- Investors will keep a close eye on:
- Global PMI data, US consumer confidence, and Japan’s upper house election results
- US-EU trade negotiations ahead of the August 1 deadline
- Corporate earnings from firms like Alphabet, Tesla, Coca-Cola, T-Mobile, and IBM
- Central bank decisions from the ECB, Russia, and Turkey
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