Tags: #NYSEBriefing #USMarkets #AIInvestments #CorporateEarnings #InterestRates
July 21 NYSE Briefing: S&P 500 Hits Record High on AI and Earnings
U.S. Stock Market Closing Trends
On Monday, July 21, the New York Stock Exchange ended mixed. The S&P 500 broke through the 6,300 mark for the first time, reaching an all-time high, and the Nasdaq also showed slight gains. However, the Dow Jones fell slightly.
In addition, the yield on U.S. long-term treasury bonds fell to 4.3%, easing overall interest rate pressure in the market.
Trade Negotiation Deadline Interpreted Flexibly by Market
The U.S. Department of Commerce emphasized the August 1 trade negotiation deadline, but the market believes talks may continue beyond the date. Negotiations with the EU and Japan show little progress, and Japan's election defeat could negatively affect U.S.-Japan talks.
Corporate Earnings Surprise: 85% of S&P 500 Companies Beat Expectations
Major companies including Verizon, Domino's Pizza, Tesla, and Alphabet reported Q2 earnings this week, most of which exceeded market expectations. According to FactSet, the 'Magnificent 7' are expected to see 14% profit growth in Q2.
Tesla's stock rebounded despite a decline in vehicle deliveries, and Alphabet (Google) is expected to perform well in YouTube and cloud services.
AI Investment Expansion and Upgraded Earnings Outlook
OpenAI CEO Sam Altman announced plans to invest in GPU infrastructure, indicating continued growth in AI-related technologies. Improved corporate earnings are also driving Wall Street to upgrade its earnings forecasts.
Economic Indicators and Tariff Impacts
U.S. retail sales, industrial production, and consumer sentiment are showing positive trends, suggesting a recession is not imminent. However, concerns remain that tariffs could increasingly impact the economy.
Morgan Stanley warns that the effective tariff rate could exceed 20%, posing long-term growth risks.
Interest Rate Outlook and Fed Policy Shifts
The decline in long-term rates is weakening the hawkish stance of the Federal Reserve (Fed). Citibank mentioned the possibility of a rate cut in September, and some experts are even discussing a potential leadership change at the Fed.
Nasdaq Rally Raises Overheating Concerns
The Nasdaq Index has stayed above its 20-day moving average for 60 consecutive days, drawing comparisons to the dot-com bubble. Speculative trading is increasing in stocks like Opendoor and high-beta names. JPMorgan considers this a red flag and urges caution.
This trend shows a continued rally led by AI and tech stocks, but also highlights the need for caution amid overheating signals and interest rate and tariff uncertainties.
