Wall Street Week Ahead: AI gains, strong earnings support US stocks as tariff woes linger
second quarter earnings
reported and stocks near record highs, company results have reassured investors about the artificial intelligence trade that has energized Wall Street, even if tariff worries curtailed buying.
With results in from 297 of the S&P 500 companies as of Thursday, year-on-year earnings growth for the second quarter is now estimated at 9.8%, up from 5.8% estimated growth on July 1, according to LSEG data.
Explore courses from Top Institutes in
Please select course:
Select a Course Category
Data Science
Public Policy
Data Science
Cybersecurity
healthcare
Others
Data Analytics
MCA
Artificial Intelligence
Operations Management
Degree
Healthcare
Design Thinking
PGDM
Technology
CXO
Digital Marketing
Management
others
Finance
Product Management
Leadership
Project Management
MBA
Skills you'll gain:
Duration:
10 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Prof Cert in DS & BA with GenAI India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
IIT Madras
CERT-IITM Advanced Cert Prog in AI and ML India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
10 Months
IIM Kozhikode
CERT-IIMK DABS India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
30 Weeks
IIM Kozhikode
SEPO - IIMK-AI for Senior Executives India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Postgraduate Cert in AI and ML India
Starts on
undefined
Get Details
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
No annual fees for life
UnionBank Credit Card
Apply Now
Undo
Next week investors will get a peek at earnings from Dow Jones Industrial Average constituents Disney, McDonald's and Caterpillar, for a look at the broader economy. Strong profit reports for these companies could propel the Dow, trading just shy of its December record high, to a fresh peak.
Some 81% of the companies have beaten analyst expectations on earnings, above the 76% average for the past four quarters.
"The earnings season has been unambiguously better than expected," Art Hogan, chief market strategist at B. Riley Wealth in Boston, said.
Live Events
The strength of corporate earnings is particularly reassuring for investors after the pummeling sentiment took in the prior quarter due to the twin threats of tariffs and worries over flagging economic growth.
"The first quarter was a bit more mixed and you had some questionable economic data ... which I think gave the market some pause," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
"But the second quarter seems to have just been a turnaround," Ghriskey said.
The strength of results for names linked to the artificial intelligence trade - the investment thesis that AI will be a transformative force, driving a significant portion of future economic growth and company profits - is particularly heartening, investors and analysts said.
"Overall it has been mega caps, growth/technology/AI that is driving a lot of the results," Ghriskey said.
"This is where we want to be exposed in terms of companies ... we're at maximum equity exposures and we're comfortable there."
Having boosted the market for several quarters, the trade ran into rough waters at the start of the year as the emergence of Chinese-founded artificial intelligence startup DeepSeek rattled investors, stoking concerns over heightened competition that could disrupt the dominance of established tech giants at the heart of the AI trade, including Nvidia.
Strong results from Microsoft and Meta Platforms reassured investors that massive bets on AI are paying off.
Worries over AI demand appear overblown, Macro Hive research analyst Viresh Kanabar said.
The trade related tumult earlier this year prompted many investors to pare equity exposure, particularly to higher-risk growth stocks.
Even after the market rebound - the S&P 500 is up about 6% for the year and near a record high - institutional investors have been slow to return to equities. Overall, investors' equity positioning is still only modestly overweight, according to Deutsche Bank estimates.
Strength in earnings from AI and technology names could draw more investors and lift markets further in coming weeks, analysts said.
"If you are trying to beat your benchmark and you were underweight any of the AI names you have to chase them," B. Riley Wealth's Hogan said.
After S&P 500's 2.2% gain in July, the seasonally volatile months of August and September, markets might face some short-term turbulence, Hogan said. Historically, August has marked a pick-up in stock market gyrations that peaks in October.
August kicked off with stocks selling off sharply on Friday as new U.S. tariffs on dozens of trading partners and Amazon's unimpressive earnings weighed on sentiment, while a weaker payrolls report added to risk aversion.
But any near-term market pullback should be seen as a buying opportunity, especially in some of the mega-cap, technology names, Hogan said.
With big AI names, Alphabet, Microsoft, Nvidia, Meta Platforms and Amazon, commanding about a quarter of the weight in the S&P 500, the health of the AI trade bodes well for the market at an index level, analysts said.
"We're not saying the weakness isn't there in other parts of the economy," Kanabar said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
26 minutes ago
- Time of India
Tesla's brand loyalty collapsed after Musk backed Trump, show numbers
Tesla for years had more repeat US customers than any other major automotive brand but its loyalty has plunged since chief executive officer (CEO) Elon Musk endorsed President Donald Trump last summer, according to data from research firm S&P Global Mobility shared exclusively with Reuters. The data, which has not been previously reported, shows Tesla's customer loyalty peaked in June 2024, when 73 per cent of Tesla-owning households in the market for a new car bought another Tesla, according to an S&P analysis of vehicle-registration data in all 50 states. That industry-leading brand loyalty rate started to nosedive in July, that data showed, when Musk endorsed Trump following an assassination attempt in Pennsylvania on the Republican nominee. The rate bottomed out at 49.9 per cent last March, just below the industry average, after Musk launched Trump's budget-slashing Department of Government Efficiency in January and started firing thousands of government workers. Tesla's US loyalty rate has since ticked back up to 57.4 per cent in May, the most recent month the S&P data is available, putting it back above the industry average and about the same as Toyota but behind Chevrolet and Ford. S&P analyst Tom Libby called it "unprecedented" to see the runaway leader in customer loyalty fall so quickly to industry-average levels. "I've never seen this rapid of a decline in such a short period of time," he said. Tesla and Musk did not respond to requests for comment. The timing of Tesla's plunging brand loyalty suggests the CEO's involvement in politics turned off customers in the EV pioneer's eco-conscious customer base, some analysts said. "If they have Democratic leanings, then perhaps they consider other brands in addition to Tesla," said Seth Goldstein, an analyst at Morningstar. Tesla's aging model lineup also faces stiffer competition from an array of EVs from legacy automakers including General Motors, Hyundai and BMW.
Hans India
26 minutes ago
- Hans India
Congress, TOMCOM launch overseas jobs drive for minority youth
Hyderabad: The Congress party, in partnership with the Telangana Overseas Manpower Company Ltd. (TOMCOM), has launched an overseas recruitment drive to promote the economic empowerment of Muslim youth. The initiative, held on Monday at the Siasat Auditorium in Hyderabad, saw a significant turnout of job seekers aspiring for opportunities in countries such as Japan, Qatar, the United Arab Emirates, and Fiji. Amer Ali Khan, a Member of the Legislative Council (MLC) and Siasat News Editor, said that the recent collaboration between Siasat Hub Foundation (S-Hub) and TOMCOM marks a new chapter in structured overseas recruitment. Khan explained that the Telangana Government, through TOMCOM, is now proactively identifying overseas job vacancies and facilitating the recruitment process. 'This is not just about sending people abroad—it's about building a roadmap for economic stability,' he said. The MLC added that S-Hub and TOMCOM have signed a Memorandum of Understanding to hold more such programmes and guide young people in finding credible job opportunities overseas. The screening event saw professionals from various disciplines participate, including those in IT, Computer Science, Civil and Mechanical Engineering, and other technical fields. Amer Ali Khan also pledged to expand S-Hub's partnerships with other government departments, ensuring that deserving students and unemployed young people have access to national and international employment pipelines.
Time of India
38 minutes ago
- Time of India
China's 996 workweek is knocking on America's door: Is Silicon Valley falling for the 70-hour grind?
(Representative image) There was a time when Silicon Valley served a dream on a platter, not just of a technology to revolutionise the world, but of lives built on flexibility, creativity, and a certain renegade freedom. Today, in the fluorescent-lit offices of AI startups from Palo Alto to SoMa, the dream is morphed and has become a subject of mockery. 12 hour shifts and six days a week are becoming the new norm of the American job market. The 21st century opened with the narratives of work-life balance, with beanbags, open offices, and kombucha on tap, it appears the next chapter may be authored in the image of a far more punishing model: China's 996 work culture, 9 AM to 9 PM, six days a week. Once vilified and outlawed in the country of origin, 996 is now knocking on America's doors, looking for a new traction in the heart of its tech frontier. The question isn't whether this trend exists. It does. The question is: What does its rise say about the future of ambition in America? Will Silicon Valley keep championing the employees who trade their sleep and sanity for the sake of so-called progress? A peek into the new reality At Rilla, a San Francisco-based AI startup, there's no pretence. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Stylish New Mobility Scooters Available for Seniors (Prices May Surprise You) Mobility Scooter | Search Ads Search Now Undo The job listing doesn't mince words: 'Do not apply unless you're excited about working approximately 70 hours a week.' It's not just a warning, it's a filter. Meals are provided, Saturdays included. The message is etched in black and white: This is the place where work should be your optimum priority, and is for the ones who breathe hustle. And this story does not end with a single company, but is slowly redefining the very fabric of American work culture, where work is no longer a part of life, but a life itself. 996 isn't creeping , it's charging in What was once the whispered domain of overworked founders is now becoming institutionalised. Google co-founder Sergey Brin recently described 60-hour weeks as the 'sweet spot' for his Gemini AI team. Elon Musk offered a more ruthless ultimatum at X: commit to 'extremely hardcore' work hours or take severance and go. Other startups are less subtle. San Francisco-based Fella & Delilah recently introduced a two-tier system, a 25% salary bump and double the equity for those opting into 996. Just under 10% of staff signed on. Meanwhile, recruiters are adjusting to the new expectations. Adrian Kinnersley, a long-time tech headhunter, reports a surge in companies asking for 996 commitments upfront. He's already registered the domain not as a gimmick, but in anticipation of a job market that no longer hides its demands behind euphemisms like "fast-paced" or "growth-minded." Why now? Why again? The answer to why there is a resurgence of extreme work culture, one has to look beyond office walls, to the geopolitical battle being waged in code and silicon. China's DeepSeek AI recently stunned Western researchers with models rivalling, even threatening, the dominance of OpenAI and Google DeepMind. Silicon Valley, long accustomed to leading from the front, suddenly feels the heat at its back. The reflex is primal: work harder. Work longer. Outbuild. Enter the 996 revival. It's no longer just about building great products; it's about defending America's place in a global AI arms race. British venture capitalist Harry Stebbings, never known for understatement, suggested that even 996 might now be passé. 'China's on 007,' he quipped. 'Midnight to midnight, seven days a week.' For Stebbings, working five days a week builds $100 million companies. Seven days? That's the $10 billion game. It's a mindset that both inspires and alarms, depending on where you stand. The fine print: Dreams vs. labour law The glorification of relentless toil does not come without repercussions. Labour law experts forewarn that numerous companies are operating far outside compliance, especially in California, which boasts some of the strictest protections for overtime, rest, and worker safety. But the law, as always, lags behind the culture. And culture is shifting fast. The truth is, there is less appetite, at least in the Valley, to run the ethos. Investors don't reward moderation. Founders don't get applause for leaving early. And in a climate where Gen Z founders equate sleep with mediocrity, the gravitational pull of extreme work is hard to resist. A warning from the East It's worth remembering: China tried this. It scaled the heights of innovation on the backs of millions of overworked engineers, only to be forced into a reckoning. Burnout, protests, suicides, and eventually, government intervention. In 2021, China made 996 illegal. The social cost had become too high. And now, in a twist almost too ironic to script, the United States is embracing the very culture China deemed untenable. The bigger question: What are we building , and at what cost? Work, at its best, is a vehicle for meaning, progress, and transformation. But when the engine is pushed too hard, too often, even the best machines break down. There is a huge fascination and allure to the narrative that genius only emerges through grind. Silicon Valley has long mythologised its titans, the Jobses, the Musks, the Zuckerbergs, as monks of obsession. But it is one thing to admire their intensity. It is another thing to institutionalise it. What happens when a whole generation mistakes exhaustion for excellence? When working through weekends isn't the exception but the expectation? The race for AI dominance is real. But the deeper race, the one that will shape our culture, our health, our future, is how we define the value of a human hour. If America is to lead the world in innovation, it must ask itself: Is it enough to work harder than China, or must we work smarter too? Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
