July 23rd, 2025
Stocks Rise on U.S.-Japan Trade Agreement; Earnings Optimism Builds as Season Gains Momentum
Equities opened higher Wednesday as investors responded positively to the newly announced U.S.-Japan trade deal. Under the agreement, Japanese imports will now face a 15% tariff—down from the 25% rate previously slated to take effect on August 1. The deal also includes roughly $550 billion in planned Japanese investment across the U.S. economy. Early gains were led by industrial and health care sectors, while technology and communication services lagged behind.
The US pact with Japan places a 15% tariff on imports from the country, President Trump said — a step down from the threatened 25% duties set to hit next week. Tokyo will make $550 billion in US investment for its part. “It’s a great deal for everybody,” Trump said.
Overseas, Asian markets closed broadly higher, with Japan’s Nikkei hitting a record high. Meanwhile, the U.S. dollar strengthened against major global currencies, and WTI crude extended its recent slide.Bottom of Form
Economic Takeaways:
- Alphabet (Google’s parent company) and Tesla are set to report second-quarter earnings after the market close, with broader expectations on the rise.
- 88% of S&P 500 companies that have reported have exceeded analyst forecasts, delivering an average surprise of 6.9%.
- Bond yields edged higher, with the 10-year Treasury yield rising to 4.37%, still below its May peak of around 4.60%.
- Yesterday the S&P 500 index inched up to its 11th record high of 2025.
- The CME FedWatch Tool showed less than a 5% chance of a rate cut next week, but odds stand at 59% for at least one cut by September.
- After jumping in May, sales last month fell 2.7% to a seasonally adjusted annual rate of 3.93 million, according to National Association of Realtors data released on Wednesday.
GoPro and Krispy Kreme Ride Wave of Summer Meme Stock Frenzy, But Gains Cool Off
GoPro (GPRO) and Krispy Kreme (DNUT) emerged as the latest names in this summer’s meme stock revival, following in the footsteps of Opendoor (OPEN) and Kohl’s (KSS), which surged earlier in the week. The trend has captured investor attention, reviving memories of the retail-fueled rallies of 2020 and 2021.
GoPro shares skyrocketed as much as 90% in pre-market trading Wednesday before trimming gains to just over 10% by mid-afternoon. Krispy Kreme saw a similar spike, jumping up to 70% before the opening bell, then settling at a 4.5% gain later in the day. Both companies, valued at under $1 billion, became prime targets in the current wave of social media-driven trading activity.
GoPro, once a breakout hardware and media tech darling, peaked at $98.47 shortly after its 2014 IPO. However, the stock has since plunged about 98% over the past decade, closing Monday at $1.37. The company’s financials have also struggled: first-quarter revenue in 2025 fell to $134.3 million, down from $155.5 million a year earlier. Even the traditionally strong holiday quarter showed weakness, with Q4 2024 revenue dropping to $200.8 million from $295.4 million the year prior.
Krispy Kreme hasn’t experienced quite as dramatic a decline in market value but has also faced headwinds. After reaching an all-time high of $21.69 during the pandemic, the stock now trades below $5. Like GoPro, its revenue has dipped—falling 15% year over year in the first quarter of 2025 to $375.2 million from $442.7 million in Q1 2024.
Both companies are slated to report earnings in August, and until then, market speculation appears to be driving much of the price action. Retail traders seem focused on small-cap stocks with high short interest, echoing past meme rallies.
Still, GoPro and Krispy Kreme haven’t seen the same explosive moves as Opendoor and Kohl’s, which more than doubled on Monday and Tuesday, respectively. On Wednesday, both of those names reversed course, falling over 15%.
On the Move
- Texas Instruments (TXN) plunged 10% in pre-market trading, with investors reacting to a softer-than-expected third-quarter outlook. The company guided for earnings between $1.36 and $1.60 per share, with the low end falling short of the $1.51 consensus estimate. Despite topping Q2 expectations, the outlook weighed heavily. As Barron’s noted, Texas Instruments supplies semiconductors across industries including autos, industrial equipment, and consumer electronics, often making it a barometer of broader economic trends.
- Nvidia (NVDA) rebounded 1% after a 2% pullback Tuesday that appeared tied to profit-taking ahead of chip sector earnings. Nvidia won’t report until late next month, and analysts noted that TXN’s cautious outlook likely doesn’t reflect Nvidia’s AI-driven business. The focus now turns to whether top customers like Alphabet and Tesla will sustain their hefty AI hardware spending.
- IBM (IBM), one of the year’s standout performers, rose nearly 1% ahead of its post-close earnings report. Investors will be watching for software sales growth, which slowed to 7% last quarter; analysts expect a rebound to 10%. Amazon (AMZN) edged up 0.6% early Wednesday. The stock has been climbing over the past month, buoyed by record-setting Prime Day sales. On Tuesday, CNBC reported Amazon founder Jeff Bezos met with President Trump, though no details were disclosed. Amazon is among the companies most directly impacted by Trump’s tariff policies.
- Retailer Kohl’s (KSS) dropped 2% this morning following a staggering 38% rally Tuesday, which appeared driven by social media chatter rather than news, according to CNBC. Krispy Kreme (DNUT) surged 32% in a similar meme-fueled move, echoing Tuesday’s action in Kohl’s. Other heavily shorted stocks seeing outsized moves include Rocket Companies (RKT), up nearly 6%, and Opendoor Technologies (OPEN), which fell over 10%. GoPro (GPRO) and 1-800-Flowers (FLWS) were also in motion. With fundamentals taking a back seat, investors should remain cautious amid heightened volatility.
- AT&T (T) fell 3.4% pre-market despite an earnings beat, as its 2025 guidance came in mostly below expectations. Hasbro (HAS) jumped 5% after beating estimates and lifting its full-year outlook. GE Vernova (GEV) soared 6.5% on upbeat guidance and a strong earnings report. Biotech firm Abivax SA (ABVX) skyrocketed 478% after announcing successful Phase 3 trial results for its ulcerative colitis treatment.
- Homebuilders continued their rally Wednesday following blowout results from D.R. Horton (DHI) and PulteGroup (PLTE), both of which saw double-digit gains Tuesday. Lennar (LEN) and Toll Brothers (TOL) also posted strong moves. Falling Treasury yields helped, alongside Trump’s floated proposal to eliminate capital gains taxes on home sales.
What’s Ahead
Tech earnings season officially kicks off today after the close as Google’s parent company, Alphabet (GOOG, GOOGL), releases its results after the market close — with artificial intelligence set to be the central focus once again.
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