AI Cushions Market as Tariff Fears Lift Utilities, Sink Dow

Friday Midday Recap – July 11 2025#

Wall Street is coping with a tug-of-war between buoyant artificial-intelligence leaders and a fresh volley of trade-war headlines. By lunchtime the S&P 500 has eased -0.23% after setting another intraday record at the opening bell, the Dow Jones Industrial Average is on the back foot (-0.61%), and the Nasdaq Composite is barely positive (+0.06%) thanks to persistent demand for AI hardware suppliers such as NVDA and AMD. Defensive buying of rate-sensitive utilities is the other notable feature, while Healthcare, Consumer Cyclical and several mega-cap payment names drag on broader performance.

According to Monexa AI real-time breadth data, only 41% of NYSE-listed stocks are higher at midday even as the Nasdaq flirts with another record, underscoring how narrow leadership has become. The CBOE Volatility Index (^VIX) is up +2.60% to 16.19, its highest intraday reading in two weeks, mirroring the market’s unease over tariff brinkmanship and next week’s June inflation print.

Market Overview#

Intraday Indices Table & Commentary#

The S&P’s pullback is modest in points terms but masks a wider rotation underway. Eight of eleven S&P sectors are negative intraday even as the index hovers less than 0.4% below yesterday’s record close. Utilities continue to act as a quasi-bond surrogate, adding more than +2% on the session, while Energy enjoys a bid in oil-service bellwethers. At the opposite end, Healthcare and Consumer Cyclical shares remain under pressure following tariff chatter aimed at Brazil and Canada.

Macro Analysis#

Economic Releases & Policy Updates#

There are no tier-one U.S. data releases on today’s calendar, leaving the market to parse Thursday’s jobless claims decline to a 30-month low and look ahead to June CPI next Wednesday. Fed officials have entered the usual media blackout ahead of the July FOMC, yet the central bank still looms large after former President Donald Trump renewed public calls for rate cuts. Bloomberg notes the White House pressure risks entrenching a “higher-for-longer” bias at the Fed as policymakers try to preserve their independence.

The rates market is reflecting that standoff. Two-year Treasury yields are unchanged near 4.71%, while December 2025 Fed-funds futures imply just 45 basis points of easing over the next 18 months – down from 55 bps earlier this week, according to CME FedWatch.

Global/Geopolitical Developments#

Trade rhetoric is the other macro swing factor. Overnight, Mr. Trump floated a 50% tariff on all Brazilian imports, adding to this week’s new levies on Canadian aluminum and speculation of further China measures. Strategists at GlobalData tell Reuters the immediate economic hit looks “manageable,” yet corporate guidance from tariff-sensitive names such as HELE and CAG shows margins are already compressing.

In currency markets, the DXY dollar index is fractionally firmer, supported by a 19-month low in weekly jobless claims and a record Bitcoin print above $118,000, which some traders see as underpinning dollar liquidity via crypto-related capital flows.

Sector Analysis#

Sector Performance Table#

Utilities dominate the leaderboard as investors rotate toward yield and defensive characteristics. Constellation Energy (CEG) jumps +1.96% to another all-time high, while NEE eases -1.39% on valuation concerns.

The Technology group inches up even though the semis are mixed. NVDA adds +1.24% after yesterday’s landmark $4 trillion market-cap milestone, offsetting declines in IT-services names such as ACN. Thin-film memory supplier Western Digital and cloud-networking specialist Arista also post solid midday gains.

Energy’s advance is concentrated in traditional oilfield services. HAL is up +3.09% after Bloomberg flagged a pickup in North American rig counts, and BKR follows suit. Solar equipment makers remain a drag; ENPH is down -4.08% amid rotation out of high-multiple renewables.

On the downside, Healthcare hurtles lower as large-cap pharma undergoes a mini-correction. GILD slides -3.71% after a sell-side note warned of slower HCV franchise growth. Managed-care plays such as MOH and UNH also retreat on fears that next week’s CPI medical-care component could surprise on the upside.

Company-Specific Insights#

Midday Earnings or Key Movers#

AI bellwether Nvidia trades at $166.14 (+1.24%) after CEO Jensen Huang’s Thursday White House visit. Bloomberg reports Huang will meet Chinese officials next week to discuss export-control waivers, a potential catalyst for the stock’s China-exposed data-center segment.

Advanced Micro Devices rallies +1.91% to $146.91 as HSBC upgrades to Buy and lifts its FY-2026 AI revenue forecast by +57%. Traders are watching the $150 level, near the June swing high, as the next technical hurdle.

Coinbase eases -0.29% to $387.83 after H.C. Wainwright downgraded the crypto exchange to Sell citing a 56× forward multiple that “races ahead of fundamentals.” The modest pullback suggests stable demand from momentum funds tied to Bitcoin’s latest surge.

Vertiv rebounds +2.66% to $123.94 despite Amazon unveiling a competing liquid-cooling solution. Wolfe Research reiterated Outperform with a $155 target, arguing hyperscale demand remains “far deeper than any single entrant can service.”

Albemarle sinks -3.77% to $71.47 after UBS cut the stock to Sell and slapped a $57 price objective, warning lithium carbonate spot prices could fall another 15%. The downgrade caps an exceptionally volatile week that saw the stock swing >12% peak-to-trough.

Among earnings reporters, Helen of Troy collapses -6.43% after posting EPS of $0.41 (vs $0.93 est.) and blaming tariffs for a near-11% revenue shortfall. Management also flagged “muted order books” from big-box retailers for Q2.

Delta Air Lines is off -1.04% at $56.19 following yesterday’s +11% surge on revived guidance. Ongoing labor-cost pressures temper enthusiasm, but option flow tracked by Cboe LiveVol shows call buyers still favor the $60 strike into next week’s earnings call.

Elsewhere, McDonald’s grinds +0.22% higher to $299.05 after Goldman Sachs upgraded to Buy, predicting the return of Snack Wraps could lift same-store sales +2.5%. Insider selling by CMO Edith Flatley (1,000 shares) does little to dent sentiment.

Extended Analysis#

Intraday Shifts & Momentum#

The session opened on a buoyant note as traders attempted to extend Thursday’s melt-up, but sentiment rolled over within the first hour once newswires carried fresh tariff headlines. S&P futures faded from an overnight high of 6,290 while Dow futures briefly erased -350 points. The reversal coincided with a sharp 4-point pop in the VIX and notable buying in Utilities SPDR (XLU), a classic haven when growth fears resurface.

Liquidity remains thin as dealers position ahead of Monday’s quarterly S&P rebalancing and next week’s CPI/PPI double-header. Market-on-close imbalances compiled by Banks of New York Mellon show an early $1.4 billion sell skew, suggesting passive funds could add incremental pressure into the close if the tariff narrative intensifies.

Under-the-hood momentum continues to favor a three-horse race in AI infrastructure (chips, cooling, and networking). The equal-weight S&P 500 is off -0.9% today and is lagging the cap-weighted benchmark by 680 bps year-to-date, the widest first-half spread since 1999, according to Bloomberg Intelligence. That divergence heightens tail risk: a single earnings stumble from Nvidia or Microsoft now has outsized potential to drag the entire index.

At the same time, rotation into Energy names hints at latent inflation hedging. Brent crude is holding above $89 and calendar spreads have tightened on geopolitical risk premium. Service majors like SLB remain a favored liquid vehicle for systematic trend-followers, and today’s bid appears to be the re-engagement of those quants after a two-week pause.

Conclusion#

Midday Recap & Afternoon Outlook#

The lunchtime tape paints a picture of uneven leadership: AI darlings and defensive utilities on one side; cyclical consumer plays, healthcare, and tariff-exposed manufacturers on the other. Rising volatility and a softening Dow underscore investor unease ahead of next week’s inflation releases and the Fed’s blackout period.

For the afternoon, traders will watch whether the Nasdaq can defend the 20,600 area and whether the VIX retreats below 16. A close under Thursday’s S&P low (6,255) could invite algorithmic selling into the weekend. Conversely, continued bid in heavyweight tech could again mask broader softness, keeping the index near all-time highs.

Key Takeaways#

The AI theme remains the market’s ballast, but breadth is deteriorating and concentration risk is growing.
Tariff rhetoric is no longer background noise; it is directly influencing sector rotation and corporate outlooks.
Utilities and Energy are finding buyers as defensive and inflation hedges respectively.
Earnings season begins in earnest next week. Early misses (HELE, CAG) show the bar is high, and any stumble by megacap tech could trigger a broader derating.
Investors may consider tightening risk controls or layering hedges into next week’s macro catalysts, while selectively adding to high-quality names showing operational resilience such as DAL and VRT.