Dow Jones falls while Nasdaq rises on Nvidia boost
The Dow fell by 313 points, or 0.5%, weighed down by inflation concerns and underwhelming bank earnings. Meanwhile, the Nasdaq gained 0.5%, lifted by a more than 4% rise in Nvidia shares after the chipmaker announced that it hopes to resume sales of its H20 GPUs to China soon. The S&P 500 edged down 0.1%, despite touching a new record high earlier in the session.
New inflation numbers for June were released, showing a monthly rise of 0.3%, which puts annual inflation at 2.7%, in line with expectations. However, this was still an uptick compared to May. Core inflation, which excludes food and energy prices, rose 0.2% from the previous month and 2.9% from the year before. Experts say while the numbers met forecasts, they still reflect a slight heat-up in inflation, possibly due to tariffs that haven't fully shown up in the data yet.
Big banks reported earnings, but most of the results disappointed investors. Wells Fargo beat expectations but lowered its outlook for interest income, sending its stock down over 4%. JPMorgan also posted better-than-expected numbers, but its shares slipped slightly. BlackRock tumbled more than 6% after missing on revenue. Citigroup was the exception, with its stock rising about 1% after beating estimates.
Despite the weak bank results, Wall Street is cautiously hopeful that the overall second-quarter earnings season will help keep the stock market near its record highs. Analysts predict the S&P 500 will show earnings growth of about 4.3% compared to last year, not huge, but still positive.
One technical signal from the S&P 500 is raising eyebrows. The index has stayed above its 20-day moving average for 55 days straight, the longest stretch since early 2021. Analysts at BTIG say this kind of streak is usually bullish in the long run, but it could mean a short-term pullback is coming. They expect some market choppiness as we move into late July and August.
In individual stock news, MP Materials soared over 25% after landing a $500 million deal with Apple to supply rare earth magnets made from recycled materials. The magnets will be produced at MP's plant in Fort Worth, Texas. This follows another recent boost for MP when the Pentagon took an equity stake in the company, sending its stock up nearly 50% last week.
Meanwhile, former President Donald Trump chimed in on the inflation report, using it as an opportunity to once again call on the Federal Reserve to cut interest rates. He argued on his Truth Social platform that rates should be cut by 3 full percentage points to save the U.S. economy money and support growth. His comments came after the June CPI report showed moderate price increases that, while not alarming, were higher than the previous month.
All in all, it was a day of mixed messages for the markets, with solid tech performance offset by concerns about inflation, rate policy, and bank earnings.
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