US stocks narrowly mixed on more earnings reports. Semiconductors weigh on Nasdaq, S&P 500
U.S. stocks remained narrowly mixed in early afternoon trade as investors digested more earnings reports.
The broad S&P 500 and tech-heavy Nasdaq scored record highs to start the week amid solid earnings reports from Domino's Pizza, Cleveland-Cliffs and Verizon. However, chip stocks are now weighing on the two indexes after the Wall Street Journal said SoftBank and OpenAI’s $500 billion artificial intelligence project scaled down its near-term plans. AI enthusiasm has lifted the semiconductor and technology sectors this year.
Of the more than 60 S&P 500 companies that have reported, more than 85% of those topped analysts’ estimates, according to FactSet data. Analysts on average expected S&P 500 companies to report a 6.7% increase in earnings for the second quarter, with big technology companies driving much of that gain, according to LSEG I/B/E/S.
Midweek, Tesla and Alphabet will be the first of the so-called Magnificent Seven megacap tech stocks to report results. Investors will be keen to dissect the earnings reports for signs of how President Donald Trump's tariffs have hit the economy and corporate spending.
At 12:35 p.m. ET, the blue-chip Dow added 0.09%, or 39.38 points, to 44,362.45, the S&P 500 slipped 0.16%, or 10.21 points, to 6,295.39, and the Nasdaq fell 0.59%, or 122.93 points, to 20,851.24. The benchmark 10-year Treasury yield fell to 4.334%.
Federal Reserve Chairman Jerome Powell continues to feel pressure to resign. Prominent economist Mohammed El-Erian said Powell should resign. “If Chair Powell’s objective is to safeguard the Fed’s operational autonomy (which I deem vital), then he should resign,” El-Erian said in a morning post on X.
Most Wall Streeters have backed Powell in his feud with Trump, who has berated Powell for months to resign or slash interest rates. Treasury Secretary Scott Bessent said earlier he saw no reason for Powell to step aside right now.
Meanwhile, Powell gave a speech this morning in Washington without mentioning the Trump administration's pressure campaign for him to step down or cut rates. Instead, he talked about banking rules.
Trade extension?
China and the U.S. will probably extend the deadline for a trade deal, Bessent said in an interview with Fox Business. He said he'll be meeting with his Chinese counterparts in Stockholm, Sweden, next week.
In May, the two countries had agreed to suspend most tariffs for 90 days to try to hammer out a trade deal. The 90-day suspension is due to be up on Aug. 12.
Bessent said the U.S. wanted to discuss, among other things, China's purchases of sanctioned Iranian and Russian oil and any support it might be giving Russia in its war with Ukraine.
Corporate news
- Goldman Sachs held talks for a roughly $25 billion takeover of wealth management firm Northern Trust earlier this year and almost closed a $6 billion deal for Cliffwater, Semafor reported. Goldman shares were just lower and Northern Trust was up 1.46%.
- Kohl's and Opendoor shares rallied 37.08% and 2.02%, respectively, as investors piled in to squeeze out short positions, according to reports. About 49% of Kohl's outstanding shares available for trading are shorted, LSEG data showed. During the pandemic, shares of stocks like GameStop became so-called meme stocks that became popular among retail investors who bought to squeeze out institutional short positions.
- GM topped second-quarter estimates and reaffirmed its full-year outlook despite Trump's tariffs. Tariffs cost the automaker $1.1 billion, in line with what the company had predicted. Shares fell 6.69%.
- Coca-Cola's second-quarter results were better than expected, helped by European sales. The beverage giant sees its full-year earnings per share at the top end of its prior guidance. Shares dropped 0.76%.
- D.R Horton shares jumped 14.66% after the company said its fiscal third-quarter results beat expectations despite a soft housing market.
- Lockheed Martin's adjusted earnings per share in the second quarter topped estimates but revenue fell short. Shares lost 8.19%.
- Philip Morris' adjusted second-quarter earnings per share beat analysts' forecasts but sales were just shy of estimates. It boosted its full-year earnings outlook. Shares slumped 6.84%.
- RTX lowered its full-year earnings forecast as the aerospace and defense giant took a hit from Trump's tariff war. Shares shed 1.77%.
- NXP Semiconductors' second-quarter results topped analysts' forecasts, but the company said it expected sales to continue falling in the current quarter, albeit at a slower pace. Shares were off fractionally.
- Danaher posted stronger-than-forecast quarterly results and raised its annual earnings outlook. Shares dipped.
- Steel Dynamics' second-quarter results missed expectations. Shares lost 2.95%.
- AstraZeneca said it plans to invest $50 billion in the U.S. by 2030, due to the threat of tariffs. Shares rose 2.2%.
- Zions Bancorp reported second-quarter earnings per share above Wall Street's estimates. Shares gained less than 1%.
- Sarepta Therapeutics said it will pause all shipments of its Elevidys gene therapy in the United States after a muscular dystrophy patient who received a different, experimental treatment died. Initially, the company refused to do so after a FDA request. The stock rose 5.93%.
Cryptocurrency
JPMorgan Chase is considering lending money backed by customers' cryptocurrency holdings as early as next year, according to the Financial Times, citing sources. This could be a sign of a wider acceptance of cryptcurrency in the mainstream, some experts said.
Bitcoin was last up 1.37% at $119,062.80.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.