S&P 500 and Nasdaq 100 Jump to Record Highs as Bond Yields Fall

The S&P 500 Index ($SPX) (SPY) today is up +0.54%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.41%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.72%.  September E-mini S&P futures (ESU25) are up +0.53%, and September E-mini Nasdaq futures (NQU25) are up +0.73%.

Stock indexes are moving higher today, with the S&P 500 and Nasdaq 100 posting new all-time highs.  Lower bond yields are supportive of stocks, with the 10-year T-note yield down -6 bp to a 1-week low of 4.36%.  Also, the strength in chip stocks today is boosting technology stocks and leading the broader market higher.

Some favorable corporate news is also supporting gains in stocks today.  Block is up more than +7% after S&P Dow Jones Indices announced that the company will replace Hess Corp in the S&P 500 before the opening of trade on Wednesday.  Also, Domino’s Pizza is up more than +2% after reporting better-than-expected Q2 revenue, and Verizon Communications is up more than +2% after raising the lower end of its full-year earnings forecast.

Recent trade news has put some downward pressure on stocks.  Last Wednesday, President Trump announced that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1.

Also, President Trump recently announced that the US will impose 30% tariffs on US imports from the European Union and Mexico, effective August 1.  In addition, Mr. Trump said that a 35% tariff on some Canadian products would take effect on August 1, up from the current 25%.  Mr. Trump also imposed a 50% tariff on copper imports, which will include semi-finished goods, and stated that drug companies could face tariffs as high as 200% on imports if they don’t relocate production to the US within the next year.

The markets this week will focus on any tariff news along with the announcement of any new trade deals.  On Wednesday, June existing home sales are expected to fall -0.7% m/m to 4.00 million. On Thursday, weekly initial unemployment claims are expected to climb by +6,000 to 227,000.  Also, the July S&P US manufacturing PMI is expected to slip -0.4 to 52.5.  Finally, on Thursday, June new home sales are expected to climb +4.3% m/m to 650,000. On Friday, June capital goods new orders nondefense ex-aircraft and parts are expected to increase by +0.2% m/m.

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 5% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17.

The markets are awaiting a heavy slate of quarterly corporate earnings results this week, including Alphabet and Tesla on Wednesday.  About one-fifth of the companies in the S&P 500 are expected to report their Q2 earnings results this week.  Early results now show S&P 500 earnings are on track to rise +3.2% for the second quarter, better than the pre-season expectations of +2.8% y/y, according to Bloomberg Intelligence.  Also, only six of the eleven S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research. 

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.42%.  China’s Shanghai Composite rallied to a 9.5-month high and closed up +0.72%.  Japan’s Nikkei Stock 225 was closed today for the Marine Day holiday.

Interest Rates

September 10-year T-notes (ZNU25) today are up +14 ticks.  The 10-year T-note yield is down -5.8 bp to 4.358%.  Sep T-notes today rose to a 1-week high, and the 10-year T-note yield fell to a 1-week low of 4.354%.  T-notes are climbing today on carryover support from last Friday when Fed Governor Christopher Waller said he backs a Fed rate cut at the July 29-30 FOMC meeting. T-notes also have carryover support from today’s rally in 10-year German bunds to a 2-week high. 

European government bond yields today are moving lower.  The 10-year German bund yield fell to a 2-week low of 2.611% and is down -7.7 bp to 2.618%.  The 10-year UK gilt yield is down -6.1 bp to 4.613%.

Swaps are discounting the chances at 1% for a -25 bp rate cut by the ECB at Thursday’s policy meeting.

US Stock Movers

Strength in chip stocks is supporting gains in the broader market.  ARM Holdings Plc (ARM) is up more than +3% to lead gainers in the Nasdaq 100.  Also, GlobalFoundries (GFS), ON Semiconductor Corp (ON), NXP Semiconductors NV (NXPI), Qualcomm (QCOM), and Broadcom (AVGO) are up more than +2%.  In addition, Lam Research (LRCX), Intel (INTC), Advanced Micro Devices (AMD), and Applied Materials (AMAT) are up more than +1%. 

Block (XYZ) is up more than +7% after S&P Dow Jones Indices announced that the company will replace Hess Corp in the S&P 500 before the opening of trade on Wednesday. 

Verizon Communications (VZ) is up more than +4% to lead gainers in the S&P 500 and Dow Jones Industrials after raising the lower end of its full-year earnings forecast to +1% to 3% from a previous estimate of 0% to +3%. 

Equinix Inc. (EQIX) is up more than +2% after Elliot Investment Management said it has built up a stake in the company in an effort to get it to take steps to boost its share price. 

Pinterest (PINS) is up more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $45. 

Dollar Tree (DLTR) is up more than +1% after Barclays upgraded the stock to overweight from equal weight with a price target of $120. 

Invesco Ltd (IVZ) is up more than +1% after TD Cowen upgraded the stock to buy from hold with a price target of $25.   

Natural gas producers are under pressure today, with nat-gas futures (NQQ25) plunging more than -6% to a 1-week low on forecasts for cooler US temperatures later this month.  As a result, EQT Corp (EQT) is down more than -6% to lead losers in the S&P 500.  Also, Antero Resources (AR) is down more than -6%, and Cheniere Energy (LNG) and Expand Energy (EXE) are down more than -5%. 

Sarepta Therapeutics (SRPT) is down more than -4% after it refused to pause all shipments of its Elevidys treatment after three deaths were linked to the company’s gene therapies. 

Biogen (BIIB) is down more than -2% to lead losers in the Nasdaq 100 after Truist Securities downgraded the stock to hold from buy.

Molina Healthcare (MOH) is down more than -2% after TD Cowen cut its price target on the stock to $283 from $369.

Centene (CNC) is down more than -1% after TD Cowen downgraded the stock to hold from buy.

Earnings Reports (7/21/2025)

AGNC Investment Corp (AGNC), Alexandria Real Estate Equities (ARE), BOK Financial Corp (BOKF), Cleveland-Cliffs Inc (CLF), Crown Holdings Inc (CCK), Domino’s Pizza Inc (DPZ), Equity LifeStyle Properties In (ELS), Medpace Holdings Inc (MEDP), NXP Semiconductors NV (NXPI), RLI Corp (RLI), Roper Technologies Inc (ROP), Steel Dynamics Inc (STLD), Verizon Communications Inc (VZ), W R Berkley Corp (WRB), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).