July 17th, 2025
Stocks Rise on Strong Labor and Retail Data; Bond Yields Retreat
U.S. stocks climbed on Thursday as investors digested a fresh batch of corporate earnings while keeping a close eye on President Trump’s ongoing efforts to remove Federal Reserve Chair Jerome Powell.
The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) each rose around 0.3%, while the Nasdaq Composite (^IXIC) advanced 0.6%, continuing its streak of record highs driven by strong tech performance.
Overseas, Asian markets closed mostly higher, and European stocks are also in the green after eurozone CPI inflation came in at 2.0% for June—right in line with expectations and the European Central Bank’s target.
Economic Takeaways:
- Treasury yields declined, with the 10-year U.S. note falling to 4.43%, down from its May peak of nearly 4.60%.
- Initial jobless claims dropped to 221,000 last week, below consensus estimates of 232,000. Continuing claims held steady at approximately 1.95 million.
- Retail and food-service sales rose 0.6% in June, outperforming expectations for a 0.2% gain. Auto sales were a major driver, jumping 1.2% from the prior month.
- Bitcoin (/BTC) dropped 1% despite reports from ABC News that the House of Representatives advanced three cryptocurrency-related bills for floor debate. Crypto-linked stocks were mixed: MicroStrategy (MSTR) and Coinbase (COIN) traded in different directions, while Circle Internet Group (CRCL) pulled back after yesterday’s double-digit surge.
- As of now, over 45 S&P 500 companies have reported earnings this season, with 87% beating consensus estimates, according to FactSet.
- The CME FedWatch Tool placed the odds of a Federal Reserve rate cut in July at less than 3%, while the chance of at least one cut by September stood at around 55% early Thursday.
- The U.S. dollar is strengthening against major global currencies.
- WTI crude is trading higher after Israeli airstrikes on Syria escalated regional geopolitical tensions.
June Retail Sales Beat Forecasts as Consumers Power Through Tariff Concerns
Retail sales rose more than expected in June, signaling that consumer spending remains resilient despite ongoing tariff pressures from President Trump’s trade policies.
Headline retail sales increased 0.6% month over month, outpacing economists’ expectations for a 0.1% rise. That followed a revised 0.9% decline in May, according to Census Bureau data.
Capital Economics North America economist Thomas Ryan wrote in a note that the latest data should “dispel any fears that overall consumer spending is faltering in response to tariffs.”
The control group—which strips out volatile components and factors into quarterly GDP—rose 0.5%, beating the 0.3% estimate and accelerating from a 0.2% rise in May.
Retail sales excluding autos and gas also grew 0.6% in June, ahead of the 0.3% forecast. In May, that measure was flat. Leading June’s strength were a 1.8% gain in miscellaneous store retailer sales and a 1.2% increase in motor vehicle and parts dealers.
Coca-Cola Responds to Trump’s Sugar Claim, Says It Appreciates His ‘Enthusiasm’
Coca-Cola (KO) could be the latest food and beverage giant to revise its ingredients under the Trump administration’s influence.
On Wednesday, President Trump announced on social media: “I have been speaking to Coca-Cola about using REAL Cane Sugar in Coke in the United States, and they have agreed to do so.”
In response, Coca-Cola issued a statement saying: “We appreciate President Trump’s enthusiasm for our iconic Coca‑Cola brand. More details on new innovative offerings within our Coca‑Cola product range will be shared soon.” The company is scheduled to report quarterly earnings on July 22. Shares of Coca-Cola remained relatively flat early Thursday.
At a recent investor event, when asked about “general health and wellness considerations,” Coca-Cola CFO John Murphy admitted, “It’s one that we’ve wrestled with. We’ve at times embraced and at times not done a great job, honestly, over our long history.”
Currently, Coca-Cola sweetens most of its U.S. beverages with high fructose corn syrup (HFCS), a more cost-effective alternative to cane sugar. Both Coca-Cola and PepsiCo (PEP) are among the country’s largest HFCS consumers. This shift in ingredients could have ripple effects across the supply chain.
On the Move
- United Airlines (UAL) dipped 1.3% in early trading. Although its Q2 earnings per share came in above Wall Street estimates and its forward guidance aligned with analyst expectations, revenue slightly missed the mark. On the upside, United noted that business travel demand improved in early July amid easing geopolitical and macroeconomic uncertainties, and emphasized that its current outlook remains conservative.
- Taiwan Semiconductor Manufacturing (TSM) surged more than 3% pre-market after posting a more than 60% jump in second-quarter profit and a 39% revenue increase. The company expects full-year revenue to climb about 30%, fueled by accelerating AI demand. As a key contract chipmaker, TSM’s performance is often seen as a broader industry bellwether. The news boosted other chip stocks like Broadcom (AVGO) and Nvidia (NVDA), which also gained early Thursday.
- Netflix (NFLX) edged up 0.6% ahead of its earnings release later today, which could move markets as past results have done. The stock has pulled back in recent weeks after a strong spring rally. Wall Street expects earnings of $7.08 per share, up 45% year-over-year, on $11.1 billion in revenue—a 15.76% increase. Following its strong revenue beat last quarter, expectations are high.
- Abbott Laboratories (ABT) fell nearly 5% before the open, despite exceeding analysts’ expectations on both earnings and revenue. Reuters reported robust demand for medical devices, but the company’s Q3 earnings forecast came in below consensus.
- PepsiCo (PEP) jumped nearly 2% after topping earnings estimates. The company now projects a smaller decline in 2025 adjusted EPS, helped by favorable currency movements.
- Starbucks (SBUX) slipped 1.6% after Jefferies downgraded the stock to Underperform from Hold, cautioning that recent gains may have outpaced any near-term improvements in company fundamentals.
- Sarepta Therapeutics (SRPT) soared nearly 30% pre-market following its announcement of a cost-cutting plan that includes reducing its workforce by 36%. The company also added a black box warning to its gene therapy, Elevidys—a move analysts say could lessen the risk of market withdrawal following two reported patient deaths.
- Archer-Daniels-Midland (ADM) lost more than 2% in early action after former President Trump claimed Coca-Cola (KO) agreed to switch to real cane sugar in its U.S. beverages. ADM is a major producer of high-fructose corn syrup used in some Coke products, and the move could potentially impact its sales.
What’s Ahead
Consumer demand took the spotlight today with June retail sales and earnings from Netflix (NFLX) are arriving after the bell.
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