Latest news with #MichaelArone
Economic Times
a day ago
- Business
- Economic Times
US stock market today: Dow, S&P 500, and Nasdaq face key week that could shape summer rally
U.S. stock market is entering a high-stakes week as investors brace for fresh inflation data and a looming U.S.–China tariff deadline that could reshape market sentiment. With the S&P 500 and Dow Jones Industrial Average hovering near record highs and the Nasdaq Composite setting new milestones, optimism is running high—but so are risks. U.S. stock market is bracing for what could be one of the most defining weeks of 2025, with investors closely watching two major events: the July Consumer Price Index (CPI) report and the impending deadline on the U.S.–China tariff truce. As the S&P 500 and Dow Jones Industrial Average hover near all-time highs and the Nasdaq Composite pushes fresh records, the stakes have never been higher. Market optimism fueled by strong technology earnings and enthusiasm over artificial intelligence innovation now meets headwinds of inflation concerns and trade uncertainties. Dow Jones Industrial Average (DJIA) — up ~77 points (+0.20%) — (+0.20%) S&P 500 — near flat (slightly negative to unchanged) — (slightly negative to unchanged) Nasdaq Composite — down ~0.20% U.S. stocks are heading into one of the most consequential weeks of the summer, with Wall Street's record-breaking rally now facing a critical test from fresh inflation data and looming tariff deadlines. The S&P 500 and Dow Jones Industrial Average closed last week near all-time highs, fueled by robust earnings from mega-cap tech companies, while the Nasdaq Composite set another record. But analysts warn that a combination of elevated valuations, inflation risks, and trade policy uncertainty could shift market momentum in the days ahead. The July Consumer Price Index (CPI), due Tuesday, is expected to be the single biggest driver of market sentiment in the short term. Economists forecast a modest month-over-month rise, but any upside surprise could challenge investors' confidence in a near-term Federal Reserve rate cut. 'Markets have been pricing in roughly an 89% chance of a September rate cut,' said Michael Arone, chief investment strategist at State Street Global Advisors. 'If CPI runs hotter than expected, those odds could drop quickly, and that's where volatility would spike.' The stakes are high because recent economic readings have shown stubbornly strong prices in some categories—particularly goods impacted by tariffs—despite cooling elsewhere. Micron Technology surged about 5–5.6 % , soaring on the strength of raised quarterly guidance tied to improving DRAM pricing and solid execution. surged about , soaring on the strength of raised quarterly guidance tied to improving DRAM pricing and solid execution. Tegna stood out with a remarkable up ~29 % gain , triggered by reports that Nexstar is in advanced talks to acquire the broadcaster. stood out with a remarkable , triggered by reports that Nexstar is in advanced talks to acquire the broadcaster. Albemarle climbed roughly 10 %, buoyed by news that China's CATL closed a lithium mine, tightening supply and boosting optimism for lithium producers. The upcoming inflation data arrives just as Washington approaches a key deadline in U.S.–China trade talks. The temporary tariff truce, set to expire this week, has traders on edge. If no extension is reached, new import duties on billions of dollars' worth of goods could take effect, potentially accelerating price pressures. Bloomberg reported Sunday that White House officials are still weighing whether to extend the truce, with business groups warning that fresh tariffs could undercut recent economic resilience. In recent weeks, the administration's earlier levies on coffee, automobiles, and select electronics have already pushed up consumer costs, feeding concerns over a stagflation scenario—slowing growth coupled with persistent inflation. Nvidia (NVDA) rose 0.43% to $182.91 AMD (AMD) gained 2.64%, closing at $177.33 Apple (AAPL) declined 1.4% to $226.14 Microsoft (MSFT) increased 0.7% to $525.69 Alphabet (GOOGL) fell 0.5% to $200.38 Amazon (AMZN) dropped 0.5% to $221.60 Tesla (TSLA) jumped 4.2% to $343.38 For now, earnings strength continues to support equity markets. According to FactSet, S&P 500 companies are on track for 11.8% year-over-year earnings growth in the second quarter, led by technology and AI-related investments. Mega-cap stocks such as Apple, Nvidia, and Google-parent Alphabet have led gains, with several breaking out to fresh highs. 'AI remains the most powerful driver of investor enthusiasm,' said Quincy Krosby, chief global strategist at LPL Financial. 'The market has a cushion thanks to earnings, but that doesn't make it immune to a policy shock.' Since April, the U.S. and China have maintained a 90-day pause on tariff escalations as part of ongoing trade negotiations. That truce expires this week, and investors are nervously awaiting the outcome. Any rollback or extension of tariffs will have ripple effects beyond just the companies directly involved, influencing global supply chains, corporate profits, and consumer prices. A re-escalation of trade tensions could trigger market volatility, especially in sectors like technology, manufacturing, and consumer goods that rely heavily on cross-border supply chains. Conversely, a positive resolution or extension would likely soothe concerns and support equity gains. Technology stocks continue to lead gains, with the Nasdaq benefiting from robust earnings reports and renewed investor enthusiasm for artificial intelligence applications. Semiconductor giants Nvidia and AMD have been under the spotlight recently. Despite regulatory complexities surrounding chip exports to China, Nvidia shares rose 0.4% while AMD surged 3.3%, signaling confidence in their growth prospects. Beyond tech, consumer discretionary and healthcare sectors have shown resilience, balancing out risks from inflation and trade. However, high valuations across many sectors mean investors remain cautious. While markets have shown remarkable strength, risks remain. Elevated stock valuations, persistent inflationary pressures, and geopolitical uncertainties around trade create a fragile backdrop. The July CPI report and tariff negotiations are the immediate catalysts that could trigger a shift from optimism to caution or even a correction. "Investors should prepare for increased volatility," said James Li, portfolio manager at Horizon Capital. "The data and trade talks will either extend the rally or mark a turning point." Following Tuesday's CPI release and the tariff truce deadline, market participants will scrutinize Federal Reserve communications, corporate earnings updates, and global economic signals for guidance. A clear inflation slowdown paired with trade stability could pave the way for further gains, while signs of economic stress or trade disruption would warrant defensive positioning. Even bulls acknowledge that valuations are stretched. The S&P 500's price-to-earnings ratio now sits above 22, well above historical averages. That leaves little room for disappointment if economic data or corporate results falter. 'The market is priced for perfection,' warned David Kelly, chief global strategist at JPMorgan Asset Management. 'If inflation data or tariffs go the wrong way, we could see a sharp repricing.' Asian and European markets opened cautiously Monday, reflecting a wait-and-see approach ahead of the U.S. inflation print. Oil prices held steady, while the dollar traded narrowly against major currencies. Analysts expect any surprise in Tuesday's CPI to ripple quickly through currency, bond, and commodity markets. In India, analysts have circled August 12 as a turning point for domestic stocks, with inflation readings, corporate earnings, and tariff news likely to set the tone for the rest of the quarter. The record-setting U.S. stock rally is about to face a week of hard data and hard decisions. Inflation readings, tariff deadlines, and Federal Reserve signals will likely determine whether markets extend their summer surge—or start to cool under the weight of economic reality. Q1: Why is the U.S. stock market focused on the CPI report this week? It could decide whether the Federal Reserve cuts rates soon or keeps them steady. Q2: How can U.S.–China tariff talks affect the stock market? New tariffs could raise prices and slow growth.
CNBC
28-07-2025
- Business
- CNBC
Market will rally despite lofty valuations, says State Street's Michael Arone
Michael Arone, State Street chief investment strategist, joins 'Power Lunch' to discuss why nothing's stopping this markets, if the Fed needs to hint at cutting rates and potential market risks.
Yahoo
28-07-2025
- Business
- Yahoo
S&P 500 Rally Faces $11 Trillion Gauntlet of Big Tech Earnings
(Bloomberg) -- The S&P 500 Index's relentless advance to record highs faces a crucial test this week, with four technology behemoths worth a combined $11.3 trillion reporting earnings over a two-day stretch. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Budapest's Most Historic Site Gets a Controversial Rebuild Trump Administration Sues NYC Over Sanctuary City Policy This earnings season is off to a solid start, but now all eyes are on quarterly results from Microsoft Corp. and Meta Platforms Inc. on Wednesday, and Apple Inc. and Inc. on Thursday. The announcements will give investors a key glimpse into the health of businesses ranging from electronic devices and software to cloud-computing and e-commerce. A strong showing is critical to sustaining the S&P 500's rally. The four firms — members of the Magnificent Seven — account for a fifth of the market-capitalization-weighted benchmark. What's more, Meta and Microsoft are among the top three point gainers in the S&P this year, after Nvidia Corp. With valuations climbing, the focus will be not only on whether they beat estimates, but also on their outlook for the coming quarters. 'The bar is set pretty high,' said Michael Arone, chief investment strategist at State Street Investment Management. 'The Magnificent Seven in particular, they really need to deliver now to keep this momentum going.' So far, Corporate America appears to be taking President Donald Trump's tariffs in stride. With about a third of S&P 500 members having reported, roughly 82% have beaten profit forecasts, on track for the best quarter in about four years, data compiled by Bloomberg Intelligence show. The performance has helped lift the benchmark by about 2% since the cycle kicked off around two weeks ago. To be fair, analysts had slashed estimates over the past few months amid concerns about the impact of tariffs on consumer spending and profit margins. While Big-Tech projections have come down too, the surge in stock prices has kept expectations elevated. The Magnificent Seven, which also includes Nvidia, Alphabet Inc. and Tesla Inc., is projected to deliver combined year-over-year earnings growth of 16% in the second quarter, according to data compiled by BI. That's down from expectations of 19% at the end of March, before Trump announced his sweeping tariffs. Nvidia is the final member of the group to report, in late August. The S&P 500, meanwhile, is expected to show annual profit growth of 4.5%, down from the 7.5% projected in March. It's all amping up the pressure on Big Tech. Many of the companies may need to give rosy forecasts to justify valuations, according to Anthony Saglimbene, chief market strategist at Ameriprise Advisor Services. 'They're likely going to have to say that the rest of the year or the next quarter looks positive, either re-affirming guidance or even upping guidance,' he said. AI Divergence Some of Magnificent Seven have failed to live up to the moniker this year as artificial intelligence has again become the dominant theme separating winners from losers in the stock market. Meta, Microsoft and Nvidia account for nearly half of the S&P 500's gain this year, while shares of companies including Apple have weakened amid struggles with the technology. That divergence was on display last week, when Alphabet rose after reporting strong earnings growth, while a bleak outlook for electric-vehicle sales sent Tesla's stock tumbling. Investors will watch capital-spending plans particularly closely. Many companies have increased spending on AI infrastructure, which has made the makers of computing gear like Nvidia and Super Micro Computer Inc. some of the best-performing stocks of the year. All signs point to that continuing. In total, Microsoft, Alphabet, Amazon and Meta are projected to pump $317 billion into capital spending in their current fiscal years, with that figure rising to $350 billion in 2026, according to the average of analyst estimates compiled by Bloomberg. Awaiting Payoff Investors have rewarded such aggressive plans in recent months, especially Meta, shares of which have rallied about 22% this year. But ultimately, investors have to see the payoff, says Gabriela Santos, chief strategist for the Americas at JPMorgan Asset Management. 'Investors are becoming much more overt in saying, 'show me the money,'' she said. 'At these levels, especially for large-cap tech, we need to see monetization rather than a promise of monetization coming at some point down the line.' Magnificent Seven valuations have jumped from the depths of the tariff-induced selloff in April, but they still remain well below peak levels. The group is priced at 28 times projected profits, compared with a high of 34 in December while the S&P 500 is priced at 22 times. 'While Big Tech P/Es can look high on the surface, if you consider the growth and the high free cash flow and the strong return on invested capital, in many cases they're attractively priced,' said Tony DeSpirito, managing director and head of US fundamental equities at BlackRock. Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme Scottish Wind Farms Show How to Counter Nimby Opposition ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-07-2025
- Business
- Yahoo
Stocks rise Thursday after strong corporate earnings reports
Stocks closed higher on Thursday, thanks to a host of positive corporate earnings reports and better-than-expected economic data. Both the the S&P 500 and the Nasdaq closed at record highs, gaining 0.54% and 0.74%, respectively. The Dow Jones Industrial Average also rose 0.52%. Some of the biggest winners of the day include PepsiCo and United Airlines, which both posted better-than-expected results. Add on solid results from many big banks earlier in the week, a decent jobs report, and higher-than-anticipated retail sales, and investors are feeling confident. So far, around 50 S&P 500 companies have reported earnings results, and 88% have beat analysts' estimates, says Michael Arone, chief investment strategist at State Street Investment Management. Earnings are growing by more than 8% year-over-year on revenue growth of nearly 5%. 'Anxious investors are breathing a sigh of relief as corporate executives forecast strong results for the remainder of 2025,' Arone says. 'Second quarter earnings season is off to a strong start, propelling market indices higher.' This follows a frenzied Wednesday in the markets, thanks to reports that President Donald Trump was getting closer to firing Federal Reserve Chair Jerome Powell. Stocks rebounded when the claim was denied by the president. Still, investors remain on edge when it comes to Powell's potential ouster. 'The financial markets have provided the clearest guardrails to Trump's more extreme policy ideas this year, so the reaction yesterday may be enough to ensure that Trump does not follow through with trying to fire Powell,' writes Stephen Brown, deputy chief North America economist at Capital Economics. Instead, share prices of two high fructose corn syrup manufacturers took a hit today thanks to the president's actions. Trump posted on his social network that Coca-Cola had agreed to use real cane sugar in products in the U.S., causing the stock prices of Archer-Daniels-Midland (ADM) and Ingredion to drop 6% and 7%, respectively, at one point. Meanwhile, Coke was tight-lipped on whether the decision had been fully agreed to. 'We appreciate President Trump's enthusiasm for our iconic Coca-Cola brand,' a company spokesperson told Fortune's Paolo Confino. 'More details on new innovative offerings within our Coca-Cola product range will be shared soon.' This story was originally featured on
Yahoo
25-06-2025
- Business
- Yahoo
This could be the biggest threat to the rally, strategist says
The S&P 500 (^GSPC) is inching closer to another record high, but State Street Global Advisors US SPDR Business chief investment strategist Michael Arone cautions that there is something that could derail the rally. Find out what it is in the video above. To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
