Midday Recap — Thursday, July 31, 2025
Stocks opened with momentum after blockbuster prints from Microsoft and Meta Platforms, but the bid faded as fresh inflation data and renewed tariff uncertainty tempered risk appetite. By noon, the S&P 500 hovered just above the flat line, the Nasdaq Composite pushed deeper into record territory, and the Dow slipped as a drag from heavyweight health-care components offset tech strength. Treasury yields inched higher after a warmer-than-expected core PCE reading, and crude prices retreated, leaving the Energy complex under pressure.
Market Overview#
Intraday Indices Table & Commentary#
| Ticker | Current Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6,366.55 | +3.66 | +0.06% |
| ^DJI | 44,297.97 | –163.32 | –0.37% |
| ^IXIC | 21,207.67 | +77.99 | +0.37% |
| ^NYA | 20,597.50 | –33.38 | –0.16% |
| ^RVX | 23.20 | –0.14 | –0.60% |
| ^VIX | 15.68 | +0.20 | +1.29% |
| The Nasdaq’s advance is powered by mega-cap AI beneficiaries, with MSFT adding +4.03% intraday on the heels of a 39 % Azure growth print, and META jumping +11.54% after a 22 % top-line beat. In contrast, the Dow’s composition—heavier in health care and industrial staples—makes it more sensitive to sector rotation out of cyclicals and into defensive yield plays. |
Macroeconomic Analysis#
Economic Releases & Policy Updates#
The Commerce Department’s core PCE index rose 0.3 % m/m, nudging the year-over-year rate to 2.9 %, a tenth above consensus (Bloomberg). The surprise rekindled concerns that the Federal Reserve’s September meeting could remain “live,” even after yesterday’s hold. Bond traders marked the two-year Treasury yield up 4 bp to 4.90 %, a three-week high, while fed-funds futures trimmed the probability of a 25-bp cut this year to 48 % (CME FedWatch).
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Chicago PMI slipped to 47.1 versus 48.8 prior (CNBC), underscoring a slowing Midwest manufacturing base and capping upside in the Industrials sector despite robust earnings from logistics operator CH Robinson.
Global & Geopolitical Developments#
Overnight, President Trump extended 25 % tariffs on Mexican imports for 90 days and hinted at similar pauses for other regions. The move provided temporary relief to supply-chain-sensitive stocks but left corporate planners wary of September negotiations. Meanwhile, EU officials reiterated plans to broaden digital-privacy enforcement in March, a headline that briefly clipped gains in ad-centric platforms before dip buyers returned.
Sector Analysis#
Sector Performance Table#
| Sector | % Change (Intraday) |
|---|---|
| Consumer Defensive | +1.31% |
| Basic Materials | +1.17% |
| Industrials | +0.63% |
| Financial Services | +0.56% |
| Healthcare | +0.35% |
| Utilities | +0.07% |
| Real Estate | –0.18% |
| Communication Services | –0.19% |
| Energy | –0.31% |
| Consumer Cyclical | –1.14% |
| Technology | –1.81% |
| Defensive leadership reflects a modest flight to quality. Costco and Philip Morris each tack on more than +1 %, while Utilities inch higher on yield support. |
Technology’s sector-level weakness masks violent dispersion: chipmaker Qualcomm sinks –7.75 % after cautious handset commentary, and software name FICO slumps –9.65 %, outweighing rallies in cloud heavyweights. The internal rotation suggests investors are recycling AI gains into companies with clearer near-term cash-flow visibility.
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In Consumer Cyclicals, eBay soars +19.08 % on a clean beat across revenue, EPS, and GMV metrics, a stark contrast to travel name Norwegian Cruise Line, which gains +8.35 % on bookings momentum but fails to arrest broader sector weakness tied to valuation concerns.
Energy is lower even as WTI trades near $80; solar laggards First Solar and Enphase drop more than –3 %, echoing analyst downgrades tied to subsidy phase-outs.
Company-Specific Insights#
Midday Earnings and Key Movers#
Albemarle posted an unexpected $0.11 adjusted EPS versus a Street loss, leveraging a 15 % volume uptick to blunt a 28 % lithium pricing slide. Management’s $400 million cost-out target is now in the rear-view mirror, providing breathing room as contract renegotiations play out.
Sprouts Farmers Market trades off –3.94 % despite a Barclays upgrade to “Overweight.” Traders cite profit-taking after a multi-week run driven by a 10.2 % same-store sales jump.
Robinhood slips –2.70 % as investors digest a +35.48 % EPS beat against concerns that retail trading volumes plateaued in July following a meme-stock spike. Mizuho’s $120 target remains 13 % above last sale, but the market wants proof of sustained net-deposit growth.
Within mega-caps, GOOGL eases –2.33 % after an appeals panel upheld antitrust remedies in the Epic Games case, adding legal overhang just ahead of next week’s hardware event.
Extended Analysis#
Intraday Shifts & Momentum#
The opening hour resembled a textbook continuation of yesterday’s euphoric close, with the S&P sprinting to 6,427, a fresh intraday high. From there, programmatic sellers emerged as the core PCE print crossed, draining 0.9 % from the benchmark in under 20 minutes. Notably, liquidity thinned in high-multiple software names, evidenced by a 35 bp spike in bid-ask spreads (Bloomberg depth-of-book).
Volumes remain elevated: composite Nasdaq turnover sits at 5.6 billion shares, 25 % above its 20-day average, underscoring active factor rotation. Options flow skews defensive; S&P 500 30-day put/call is at 0.72, the highest since mid-June, while VIX futures term structure moved from mild backwardation to a flatter curve, hinting at modest protection demand rather than panic.
Meanwhile, the Russell Volatility Index (^RVX) receded, reflecting calm in small-cap land even as rate-sensitive domestic banks rallied in sympathy with better-than-feared credit-card delinquencies disclosed by Mastercard.
Thematically, traders continue to pay up for proven AI monetizers—Microsoft and Meta added roughly $500 billion in combined market cap overnight (Bloomberg). However, second-tier enablers such as Western Digital and PTC rallied +9.41 % and +6.74 % respectively, suggesting the market is willing to extend the valuation umbrella to adjacent beneficiaries, at least while earnings momentum remains intact.
Conclusion#
Midday Recap & Afternoon Outlook#
The tape tells a tale of bifurcation. AI bellwethers are doing the heavy lifting for the growth complex, yet cracks are visible in crowded technology trades and economically sensitive cyclicals. Hotter inflation and tariff noise have nudged investors toward Consumer Defensive and Utilities, though the bid is orderly rather than panicked.
Looking into the second half, liquidity around the 3 p.m. ET rebalance and tomorrow’s July Jobs Report are the next catalysts. Any upside surprise in non-farm payrolls could push yields higher and further test tech multiples, whereas a downside miss might reinforce the soft-landing narrative and keep the risk bid alive. Until then, expect a lighter-volume drift with desks focused on managing outsized earnings-related positions.
Key Takeaways#
- Mega-cap tech earnings once again masked underlying market fragility; breadth remains narrow with fewer than 45 % of S&P issues advancing at midday.
- Core PCE’s 0.3 % monthly rise stirred debate over the Fed’s glide path, lifting front-end yields and capping multiple expansion.
- Sector rotation favors defensives—Consumer Staples and Utilities eke out gains as investors seek shelter from valuation pushback and policy uncertainty.
- Lithium producer ALB and e-commerce stalwart EBAY illustrate that idiosyncratic cost control and demand resilience can still deliver upside even in challenged segments.
- Afternoon trade hinges on positioning into Friday’s labor data; watch the VIX term structure and high-beta tech for early tells on whether today’s cooling is a pause or the start of a broader pullback.