Mid-Day Buzz
July 15th, 2025
Markets Open Mixed as Inflation Meets Expectations; Earnings Season Begins on Strong Note
U.S. equities opened with a mixed tone on Tuesday, following a June CPI inflation report that came in largely as expected. The S&P 500 and Nasdaq posted gains, while the Dow Jones edged slightly lower. The start of Q2 earnings season added to the day’s significance, with major banks such as J.P. Morgan beating forecasts.
Stock markets continue their gradual upward trend, with the S&P 500 now up over 25% since its April 8 low.
Economic Takeaways:
- In fixed income, Treasury yields moved modestly lower, with the 10-year yield down about 0.01% to 4.3%. Yields have remained range-bound during the equity rebound.
- Analysts expect 4.8% second quarter S&P 500 earnings per share growth, down from above 13% in the first quarter.
- The Consumer Price Index rose 2.7% over the prior year in June, an uptick from May’s 2.4%.
- Rate cut odds remain low—just 3% for July—but markets are pricing in a 61% chance of at least one cut by September, per the CME FedWatch Tool.
- Technically, a warning signal emerged as the S&P 500 hit new highs while its Relative Strength Index (RSI) declined—a pattern last seen in July 2024, which preceded a sell-off. “Seasonality turns more bearish in late July, so I read the technical tea leaves through cautious eyes,” said Schwab’s Nathan Peterson.
- Market breadth stayed positive with 70% of S&P 500 stocks trading above their 50-day moving averages. Last week’s strength in utilities, materials, and energy suggests a defensive shift. ETF inflows remained strong but tapered slightly.
Inflation Remains Contained Despite Slight Increase
June’s CPI inflation report was in line with expectations, reinforcing the view that price pressures remain relatively contained. Headline CPI rose 2.7% year-over-year, slightly above the 2.6% forecast and up from 2.4% the prior month.
Core CPI, which excludes food and energy, increased 2.9% year-over-year—matching estimates and slightly above May’s 2.8%. On a monthly basis, headline CPI rose 0.3%, in line with forecasts, while core CPI edged up 0.2%, just below the 0.3% estimate.
Prices for several categories, including meat, dairy, new and used cars, and airline fares, declined during the month. Despite tariff hikes since the start of the year, inflation has held within the 2.5% to 3.0% range*. Companies may have mitigated price pressures through inventory management and supply chain adjustments. Looking ahead, we anticipate a potential rise in inflation above 3.0% in the near term, likely representing a one-time adjustment that may ease over the next 12 months.
Positive Start to Earnings Season
Earnings season began on a strong note Tuesday, with major financial institutions like J.P. Morgan, Citibank, and Wells Fargo reporting second-quarter results.
So far, results have exceeded expectations, with J.P. Morgan notably benefiting from higher trading and investment banking revenues.
While S&P 500 earnings growth for Q2 is projected at roughly 5%—down from the 11% forecast earlier this year—full-year 2025 growth is still expected to reach high single digits, with a potential acceleration to double-digit growth by 2026.
Factors that could support this rebound include possible Federal Reserve rate cuts, modest fiscal stimulus tied to next year’s tax legislation, and some regulatory easing. These tailwinds could bolster both the economy and corporate earnings heading into 2026.
Crypto Nears Historic Milestone as Congress Moves Toward Landmark Legislation
This week is being dubbed “Crypto Week” on Capitol Hill, as lawmakers edge closer to passing the first comprehensive cryptocurrency law in U.S. history. The House is set to vote on a bill regulating stablecoins—digital assets pegged to the U.S. dollar—which has already cleared the Senate. If approved, it will head to the president’s desk for signing. In addition, the House will review a second, broader bill aimed at establishing a comprehensive regulatory framework for the entire crypto industry.
“It would clarify who is in charge of overseeing the crypto space… and set up some guardrails for the industry,” said Michael Townsend, managing director of legislative and regulatory affairs at Schwab.
On the Move
- MP Materials Corp. (MP), a U.S.-based rare earth materials miner, saw its shares jump over 22% Tuesday following the announcement of a deal with Apple (AAPL).
- Nvidia (NVDA) stole the spotlight on a day otherwise focused on bank earnings and inflation data. Shares of the AI leader surged 4.5% after news broke that it would once again be allowed to sell its H20 chip in China.
- JPMorgan Chase (JPM) traded flat pre-market despite surpassing earnings expectations for the sixth consecutive quarter. The bank reported adjusted EPS of $4.96—well above the $4.48 consensus—boosted by a 15% rise in markets revenue, 5% growth in average loans, and a 6% increase in deposits. CEO Jamie Dimon noted rising momentum in investment banking as market sentiment improved but warned of risks from tariffs and trade uncertainty. JPM shares have risen 17% since May 1.
- Wells Fargo (WFC) dipped 2.3% despite a solid EPS beat ($1.60 vs. $1.41 forecast). Disappointment stemmed from a 2% drop in net interest income and the bank’s forecast for flat NII growth this year, though credit performance remained strong.
- Citigroup (C) edged higher after reporting EPS of $1.96, beating the $1.60 estimate. Revenue jumped 8%, with equities driving the markets division to its best Q2 since 2020. Banking revenue rose 18%, and wealth management climbed 20%. Guidance was in line with expectations.
- BlackRock (BLK) slipped nearly 2% despite topping EPS estimates. Revenue narrowly missed expectations, though assets under management hit a record high.
- Bitcoin (BTC) fell 2.3% early Tuesday after reaching record highs Monday ahead of “Crypto Week” in Washington. Crypto-linked stocks like MicroStrategy (MSTR), Circle (CRCL), and Coinbase (COIN) also fell 1–2% after gains Monday. MSTR was lifted previously by a bullish TD Cowen price target, citing its unmatched cost of capital.
- Royal Caribbean (RCL) eased slightly after hitting an all-time high Monday, following strong cruising sentiment sparked by Carnival’s (CCL) recent results. CCL also rose again Monday.
- Netflix (NFLX) held flat after a 1% gain yesterday as investors await its Thursday earnings report.
- Trade Desk (TTD) soared 14% after being added to the S&P 500. AppLovin (APP), expected by some to be included, dropped 1.7%. Palantir (PLTR) also slipped after Monday’s tech-driven rally.
- Tesla (TSLA) officially launched in India on Tuesday, making a small bet on a country with massive growth potential.
- S.-listed shares of Alibaba (BABA) and Baidu (BIDU) surged 6.4% and 7.8%, respectively, on Tuesday after news broke that Nvidia (NVDA) will resume sales of its AI chips to China.
- JPMorgan (JPM) CEO cautioned that President Trump’s growing pressure on the Federal Reserve to cut interest rates and replace Chair Jerome Powell could lead to unintended consequences.
What’s Ahead
July 16: June Producer Price Index (PPI), Fed Beige Book, and expected earnings from ASML (ASML), Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), Alcoa (AA), and United Airlines (UAL).
July 17: June retail sales and expected earnings from Abbott Laboratories (ABT), Marsh & McLennan (MMC), PepsiCo (PEP), Taiwan Semiconductor Manufacturing (TSM), Travelers Companies (TRV), and Netflix (NFLX).
July 18: June housing starts, June building permits, July preliminary University of Michigan Consumer Sentiment, and expected earnings from 3M (MMM) and SLB (SLB).
July 21: June leading indicators and expected earnings from Cleveland-Cliffs (CLF), Domino’s Pizza (DPZ), and Steel Dynamics (STLD).
July 22: Expected earnings from Coca-Cola (KO), General Motors (GM), Halliburton (HAL), Lockheed Martin (LMT), Northrop Grumman (NOC), Philip Morris (PM), Sherwin-Williams (SHW), Capital One (COF), and Texas Instruments (TXN).
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