Stocks Supported by Positive Trade News

The S&P 500 Index ($SPX) (SPY) today is up +0.08%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.34%.  September E-mini S&P futures (ESU25) are up +0.05%, and September E-mini Nasdaq futures (NQU25) are up +0.34%.

Stock indexes are mostly higher, with the S&P 500 and Nasdaq 100 posting new record highs.  Positive trade news is bullish for stocks after the European Union (EU) and the US reached a trade deal on Sunday, which will see the EU face 15% tariffs on most of its exports, lower than the previous threats from President Trump of tariffs as high as 50%.  Stocks also rose after the South China Morning Post reported that the US and China are expected to extend their tariff truce by another 90 days from August 12, when US Treasury Secretary Bessent and Chinese Vice Premier He Lifeng meet in Stockholm today.

The markets this week will focus on any news of new trade deals before Friday's deadline.  On Tuesday, the Jun JOLTS job openings are expected to decline by -219,000 to 7.55 million.  Also on Tuesday, the Conference Board's US Jul consumer confidence index is expected to climb by +3.0 to 96.0.  In addition, the 2-day FOMC meeting begins on Tuesday, and the Fed is expected to keep the fed funds target range unchanged at 4.25% to 4.50%.  On Wednesday, the Jul ADP employment change is expected to climb by +80,000.  Also on Wednesday, Q2 GDP is expected to expand by +2.4% (q/q annualized) and the Q2 core PCE price index is expected to ease to +2.3% from +3.5% in Q1.  On Thursday, weekly initial unemployment claims are expected to rise +6,000 to 223,000 and the Q2 employment cost index is expected to climb by +0.8%.  Also, Jun personal spending is expected to climb +0.4% m/m and Jun personal income is expected to rise +0.3% m/m.  In addition, the Jun core PCE price index, the Fed's preferred inflation gauge, is expected to climb +0.3% m/m and +2.7% y/y.  Finally, on Thursday, the Jul MNI Chicago PMI is expected to increase by +1.6 to 42.0.  On Friday, Jul nonfarm payrolls are expected to increase by +109,000 and the Jul unemployment rate is expected to rise by +0.1 to 4.2%.  Also, Jul average hourly earnings are expected +0.3% m/m and +3.8% y/y. In addition, the Jul ISM manufacturing index is expected to increase by +0.2 to 49.5.  Finally, the University of Michigan Jul consumer sentiment index is expected to be unrevised at 61.8. 

The markets are awaiting President Trump's August 1 deadline for trade deals to avoid high tariffs.  On July 16, Mr. 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.  As an update, Mr. Trump last Wednesday said, "We'll have a straight, simple tariff of anywhere between 15% and 50%," an indication that the floor for tariffs is rising and suggesting that he would not go below 15%. 

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 62% at the following meeting on September 16-17.

This week kicks off the earnings season's busiest week, with 38% of the stocks in the S&P 500 reporting quarterly earnings, double the amount reported last week. Magnificent Seven member earnings results will be front and center, with Apple, Amazon.com, Microsoft, and Meta Platforms reporting this week.  Early results now show S&P 500 earnings are on track to rise +4.5% for the second quarter, better than the pre-season expectations of +2.8% y/y, according to Bloomberg Intelligence.  Around 80% of the S&P 500 companies that have reported have exceeded profit estimates. 

Overseas stock markets today are mixed.  The Euro Stoxx 50 rose to a 2-week high and is up +0.26%.  China's Shanghai Composite closed up +0.12%.  Japan's Nikkei Stock 225 closed down -1.10%.

Interest Rates

September 10-year T-notes (ZNU25) today are down -4 ticks.  The 10-year T-note yield is up +2.0 bp to 4.408%.  T-notes are under pressure from today's rally in the S&P 500 to a new record high, which reduces safe-haven demand for T-notes.  Also, supply pressures are weighing on T-notes as the Treasury will auction $69 billion of 2-year T-notes and $70 billion of 5-year T-notes later today.  Losses in T-notes are limited after the US and EU agreed on a trade deal, which eases concerns about inflation.

European government bond yields today are mixed.  The 10-year German bund yield is down -2.3 bp to 2.695%. The 10-year UK gilt yield is up +1.8 bp to 4.654%.

ECB Governing Council member Kazimir said the ECB shouldn't cut interest rates in September unless there's evidence of a major deterioration in the economy.

Swaps are discounting the chances at 14% for a -25 bp rate cut by the ECB at the September 11 policy meeting.

US Stock Movers

Chip stocks are climbing today after the EU and the US reached a trade deal.  Advanced Micro Devices (AMD) is up more than +3% to lead gainers in the S&P 500 and Nasdaq 100.  Also, ASML Holding NV (ASML), Lam Research (LRCX), and Texas Instruments (TXN) are up more than +2%.  In addition, GlobalFoundries (GFS), Marvell Technology (MRVL), On Semiconductor Corp (ON), Intel (INTC), Applied Materials (AMAT), and KLA Corp (KLAC) are up more than +1%.

Energy stocks and energy service providers are higher today with the price of WTI crude oil up more than +2% to a 1-week high.  Devon Energy (DVN), APA Corp (APA), and Diamondback Energy (FANG) are up more than +2%.  Also, Haliburton (HAL), Phillips 66 (PSX), Marathon Petroleum (MPC), ConocoPhillips (COP),  Baker Hughes (BKR), Occidental Petroleum (OXY), and Valero Energy (VLO) are up more than +1%.

LNG stocks are moving higher after the EU committed to big purchases of American energy products as part of the EU-US trade deal.  Cheniere Energy (LNG) and Venture Global (VG) are up more than +3%.

Nike (NKE) is up more than +1% to lead gainers in the Dow Jones Industrials after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $93.

Weatherford International Plc (WFRD) is up more than +4% after Piper Sandler upgraded the stock to overweight from neutral with a price target of $73. 

Revvity (RVTY) is down more than -9% to lead losers in the S&P 500 after cutting its full-year adjusted EPS estimate to $4.85-$4.95 from a previous estimate of $4.90-$5.00, the midpoint below the consensus of $4.93. 

Cisco Systems (CSCO) is down more than -1% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to inline from outperform. 

Gilead Sciences (GILD) is down more than -1% to lead losers in the Nasdaq 100 as analysts note a potential risk to the company's HIV preventative drugs after HHS Secretary Kennedy was reported to be planning the dismissal of an advisory panel that determines what preventive health measures insurers must cover.

Centene (CNC) is down more than -1% after Cantor Fitzgerald downgraded the stock to neutral from overweight,

Accenture Plc (ACN) is down more than -1% after HSBC initiated coverage on the stock with a recommendation of reduce and a price target of $240. 

GE Vernova (GEV) is down more than -1% after Mizuho Securities downgraded the stock to neutral from outperform and Guggenheim Securities downgraded the stock to neutral from buy. 

Earnings Reports (7/28/2025)

Amkor Technology Inc (AMKR), Brixmor Property Group Inc (BRX), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Cincinnati Financial Corp (CINF), Crane Co (CR), Exelixis Inc (EXEL), Hartford Insurance Group Inc/The (HIG), Kilroy Realty Corp (KRC), NOV Inc (NOV), Nucor Corp (NUE), Olin Corp (OLN), Principal Financial Group Inc (PFG), Revvity Inc (RVTY), Rithm Capital Corp (RITM), Simpson Manufacturing Co Inc (SSD), Universal Health Services Inc (UHS), Veralto Corp (VLTO), Waste Management Inc (WM), Welltower Inc (WELL), Western Union Co/The (WU), Whirlpool Corp (WHR), Woodward Inc (WWD).