Introduction#
According to Monexa AI data, the major U.S. equity benchmarks finished Wednesday modestly higher—S&P 500 up +0.32 % to 6,263.70, the Dow Jones Industrial Average up +0.53 % to 44,254.78, and the Nasdaq Composite up +0.25 % to 20,730.49—even as fresh tariff rhetoric, inflation worries, and a high-profile tussle between President Trump and Fed Chair Powell kept traders on edge. Overnight, a stronger U.S. dollar, steady Treasury yields, and Asia-Pacific indecision hint at a choppy start to Thursday’s session. Traders are also digesting stellar numbers from Taiwan Semiconductor Manufacturing (TSM and bracing for a wave of U.S. earnings led by GE Aerospace, PepsiCo, and Netflix after the close.
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Market Overview#
Yesterday’s Close Recap#
The day’s advance was powered by financials, real estate, and healthcare, while energy lagged on the back of softer crude prices. Equity volatility remained subdued, with the CBOE VIX inching up +0.93 % to 17.32. The rotation into defensive pharma names such as JNJ and the continued melt-up in private-equity heavyweights like KKR underscored prevailing caution despite record highs on the Nasdaq.
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Morning Market Brief: Tech Strength And Energy Bid Into Friday
Stocks closed higher Thursday as tech and energy led while defensives fell; overnight AI, policy, and trade headlines set Friday’s tone.
Nvidia and cyclicals set the tone before Thursday’s open
Indexes closed higher as energy and software led. Overnight, Nvidia’s outlook and Fed independence headlines frame today’s risk tone.
Nvidia’s earnings loom as AI-led rally tests resilience
Stocks enter Wednesday with a cautious risk-on tilt as Nvidia’s report after the bell looms and China headlines shape sentiment. Here’s what to watch.
| Ticker | Closing Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6,263.70 | +19.94 | +0.32 % |
| ^DJI | 44,254.78 | +231.49 | +0.53 % |
| ^IXIC | 20,730.49 | +52.69 | +0.25 % |
| ^NYA | 20,493.15 | +118.77 | +0.58 % |
| ^RVX | 24.18 | -0.29 | -1.19 % |
| ^VIX | 17.32 | +0.16 | +0.93 % |
Overnight Developments#
Late-session Asia trade provided little follow-through. Hong Kong rallied on Nvidia-linked chip optimism, but mainland China slipped after a weaker-than-expected GDP update. In Taiwan, TSMC’s Q2 net profit surged +60.70 % YoY on blistering AI chip demand, yet management flagged tariff-driven uncertainty for Q4. Europe opened flat to slightly higher, with Stoxx 600 futures muted as eurozone investors weigh UBS’s fresh 1 % U.S. growth call for 2025. On the policy front, Treasury yields edged higher after President Trump denied an imminent Powell ouster while still lambasting the Fed for holding rates “too high.” The Dollar Index rose +0.30 % overnight to trade near 98.40.
Macro Analysis#
Economic Indicators to Watch#
Thursday’s calendar features weekly jobless claims, the July Philadelphia Fed manufacturing survey, and June housing starts. Consensus looks for initial claims around 234,000 after last week’s 236,000 print. In the wake of yesterday’s 2.9 % core CPI, even a small upside surprise in claims could temper fears of an overheating labor market. Later in the afternoon, the Treasury will auction $21 billion in 10-year TIPS—an event that could test demand for inflation hedges amid rising tariff chatter.
Global / Geopolitical Factors#
Trade remains the macro swing factor. Barclays estimates average applied U.S. tariffs have climbed from 2 % in 2024 to roughly 16 % as of July, with notable spikes in autos, steel, and consumer electronics. Morgan Stanley strategist Mike Wilson told Bloomberg he sees “no more than a 5–10 % correction” should fresh levies bite in Q3, but the risk skew is clearly asymmetric for highly global subsectors such as semiconductors, autos, and apparel. Meanwhile, national-security hawks in Washington have reportedly slowed a Nvidia-UAE AI-chip deal over potential Chinese leakage, illustrating the cross-currents between commerce and geopolitics.
Sector Analysis#
Sector Performance Table#
| Sector | % Change (Close) |
|---|---|
| Healthcare | +0.80 % |
| Financial Services | +0.38 % |
| Real Estate | +0.32 % |
| Industrials | +0.28 % |
| Technology | +0.15 % |
| Consumer Cyclical | +0.14 % |
| Basic Materials | -0.20 % |
| Communication Services | -1.03 % |
| Energy | -1.33 % |
| Consumer Defensive | -1.41 % |
| Utilities | -1.99 % |
Healthcare’s outperformance was spearheaded by JNJ jumping +6.19 % on upbeat pipeline commentary, while energy slumped as Brent pulled back toward $81/barrel on concerns that tariffs could slow industrial demand. Financials added +0.38 %, supported by another risk-on day for alternative-asset managers: APO up +4.80 %, BX up +3.83 %, and BLK up +3.45 %.
Company-Specific Insights#
Earnings and Key Movers#
Thursday’s U.S. docket features pre-market prints from GE Aerospace, Abbott Labs and PepsiCo, followed by heavyweight reports from NFLX after the bell. Options markets imply a ±6.4 % one-day move for Netflix, slightly above the five-quarter average of ±5.8 %. Analysts will dissect subscriber momentum as price hikes collide with intensifying competition.
In tech hardware, TSMC’s blockbuster report reaffirmed that AI demand is still outrunning supply, a bullish read-through for NVDA and AMD ahead of their own updates next month. However, TSMC’s tariff caveat underscores the eventual margin squeeze if 3 nm production migrates to pricier locales.
Among autos, TSLA gained +3.50 % despite UBS flagging it as one of the most shorted names into next week’s earnings. Short-interest tracking shows -6.99 crowding score—extreme by UBS methodology—setting the stage for potential volatility should Elon Musk deliver positive commentary on Cybertruck ramp or India expansion.
New-issue volatility remains a theme: GrabAGun, fresh off a 24 % IPO swoon, clawed back +2.00 % in thin pre-market dealings after the Trump-backed firearms e-retailer promised expedited 2025 profitability.
Conclusion#
Morning Recap and Outlook#
Thursday’s set-up combines three narratives. First, tariff anxiety is slowly seeping into inflation prints, sector leadership, and corporate guidance. Second, AI hardware demand is keeping tech multiples aloft, exemplified by TSMC’s blow-out numbers and persistent strength in NVDA despite export-control noise. Third, Fed-watch tensions have eased after Trump’s Powell walk-back, allowing Treasury yields and the dollar to normalize.
For the session ahead, watch jobless claims for signs of labor softening, track the dollar’s bid as a litmus test for global risk appetite, and monitor earnings commentary for fresh tariff disclosures. Given stretched positioning—Bank of America’s cash level “sell signal” sits at 3.90 %, the lowest in 18 months—any macro disappointment could provoke outsized index swings.
Key takeaways for investors: stick with high-quality financials that are leveraging fee income rather than net-interest spreads; use healthcare’s pricing power as a tariff hedge; stay nimble in semiconductors where AI upside battles policy risk; and remain cautious on energy until demand signals firm up. The path of least resistance is sideways-to-higher, but only as long as Washington’s trade bullets remain rhetorical rather than enacted.