The stock market rally marched on with the S&P 500 and Nasdaq hitting record highs, led by AI chips and strong economic data. Nvidia and Advanced Micro Devices will be allowed to sell certain AI chips to China once again. Taiwan Semiconductor, which makes chips for Nvidia, AMD and many others, reported strong earnings and guided higher.
Furthermore, a slew of AI and AI-related energy announcements also buoyed artificial intelligence plays. But chip-gear giant ASML tumbled on weak guidance. JPMorgan Chase and Citgroup led bank earnings. Charles Schwab and Interactive Brokers helped buoy online brokers, which also rallied on crypto-related enthusiasm.
Stock Market Rallies To Highs
The S&P 500 and Nasdaq moved to fresh highs, with the Dow Jones close. Inflation data was generally in line to tame, while retail sales and other reports signaled strong economic activity. Nvidia and Advanced Micro Devices led a strong week for AI chip stocks. Treasury yields rose for a third straight week, while the U.S. dollar continued to rebound after a sharp, long decline. Cryptocurrencies and related stocks had a strong week as pro-crypto legislation worked its way through Congress.
Inflation Still Tame, Economic Data Strong
June inflation data showed that Trump tariffs are pushing up goods prices, but the core consumer price index still only rose a less-than-expected 0.2% on the month. Prices for household appliances rose 1.9%, sporting equipment 1.8% and toys 1.8%. But hotel and motel rates fell 2.9%, holding down services prices. New and used vehicle prices dipped. Automakers have yet to pass along tariffs, but that may change in July. Retail sales rose a stronger-than-expected 0.6%, with a 0.5% gain excluding autos. However, the CPI's core goods prices excluding autos also rose 0.5%, suggesting little real underlying retail sales growth. The data basically left Fed rate-cut expectations unchanged. Markets see about 60% odds of an easing at the Sept. 17 meeting.
Nvidia Returns To China AI Market
The Trump administration cleared Nvidia and rival AMD to resume selling throttled AI processors to customers in China. The administration had halted sales of those chips to China in April over national security concerns. Nvidia will offer its H20 artificial intelligence chip to Chinese customers and AMD will sell its MI308 chip there. Nvidia stock and AMD jumped, along with many other AI plays.
Chip Industry Leaders Diverge
Top contract chip manufacturer Taiwan Semiconductor and leading semiconductor equipment firm ASML delivered second-quarter reports that got opposite investor responses. TSMC posted a beat-and-raise Q2 report with strength from artificial intelligence chip production. Its earnings surged 79% year over year while sales climbed 54%. TSMC shares jumped on the results and other AI news. Meanwhile, ASML beat Q2 views but disappointed with its soft guidance for the current quarter and full year. ASML stock tumbled after the report.
Market At Highs, But Getting Extended; Google, Tesla Headline Big Earnings
Big AI, Energy Investments
President Trump hosted an artificial intelligence summit in Pennsylvania. At the event, FirstEnergy and Constellation Energy touted investments in electricity generation for AI data centers. Alphabet-unit Google and CoreWeave announced plans to build data centers in the state. Private-equity firm Blackstone also said it will increase AI investments. Talen Energy spiked as it announced $3.5 billion in deals to buy two gas-fired power plants to serve data centers.
Citigroup Stands Out As Banks Report
JPMorgan Chase, Wells Fargo and Citigroup topped earnings and revenue estimates on Tuesday. JPM's net interest income rose during the quarter, but fell short of estimates. Wells saw net interest income decline, and cut its NII forecast for the year. JPMorgan CEO Jamie Dimon noted that investment banking activity started to slow during the quarter, but picked up as market sentiment improved. He called the U.S. economy "resilient" during the quarter, but noted that "significant risks persist," including tariffs, trade uncertainty, high deficits and elevated asset prices. Goldman Sachs and Morgan Stanley beat analyst estimates on Wednesday. Bank of America topped earnings views but missed revenue expectations. The CEOs for JPMorgan, Citi and Bank of America in the investor calls noted they are exploring ways to get involved with cryptocurrency stablecoins. The Senate's GENIUS stablecoin bill is working its way through the House.
Citigroup stock jumped, JPMorgan rose modestly while Wells Fargo fell slightly. Meanwhile Goldman and Morgan Stanley were little changed for the week.
Online Brokers Hot
Charles Schwab and Interactive Brokers both easily beat Q2 earnings forecasts amid a strong pickup in trading activity and year-over-year gains in margin lending. Schwab earnings per share leapt 56% as revenue grew 25% to $5.851 billion. Net interest margins rose to 2.65% from 2.03% a year ago, helped by Schwab's paying down $10.4 billion in high-cost bank funding. Schwab also announced a near-term launch of spot bitcoin and ethereum trading, calling it a "meaningful growth driver." Interactive Brokers' EPS climbed 16% as revenue grew 15% to $1.48 billion. Commission revenue grew 27% on higher trading volumes. Both stocks rallied to fresh highs Friday, adding to weekly gains, with other online brokers rallying, partly on crypto momentum.
GE Aerospace Beats, Guides Up
GE Aerospace reported a 38% earnings increase with Q2 revenue up 21% to $11.02 billion. Commercial engines revenue grew 30%, beating views, while orders increased 28%. Defense and propulsion technology revenue rose 7%, missing. GE Aerospace now expects its commercial segment to deliver high-teens revenue growth for the year. The defense unit is expected to deliver mid- to high-single-digit revenue growth. GE also lifted its 2025 and 2028 outlooks. GE stock reversed lower Thursday from a record high, but rose for the week.
Uber Forges Lucid, Baidu Deals
Uber Technologies announced the latest in a string of new robotaxi partnerships as it fends off frenemy Waymo, owned by Google-parent Alphabet and a potential challenge from Tesla. First, ride-hailing company Uber said it would team up with China tech giant Baidu to offer its Apollo Go autonomous rides on the Uber app in the Middle East and Asia. Two days later, Uber announced a six-year plan to deploy 20,000 or more Lucid electric vehicles on its app in the U.S., which will run autonomously using technology from the startup Nuro. Uber said it is investing "hundreds of millions" in both Lucid and Nuro through the deal. After selling its self-driving division in 2020, Uber has focused on partnering with robotaxi developers, including Waymo, as well as China-based WeRide and Pony AI. Uber is up 50% year to date after robotaxi concerns weighed on the stock in 2024. But Uber fell solidly in the latest week.
Stock Market News In Brief
Travelers rebounded back above its 200-day line after the Dow Jones insurance giant reported a 159% EPS gain, easily beating. Home-and-auto insurer Progressive reported GAAP profit more than doubled in Q2. Shares edged higher from their lowest levels in nearly six months.
Cintas earnings per share climbed 18% with revenue up 8% to $2.61 billion, both narrowly beating fiscal Q4 views. The corporate uniform supplier reversed higher on results, retaking the 50-day line.
3M beats Q2 views with EPS up 12% and revenue rising 2% to $6.2 billion. The Dow Jones giant raised full-year guidance. Shares reversed solidly lower Friday, below a buy point.
American Express reported a 17% EPS gain with Q2 revenue up 9% to $17.86 billion, both beating. The Dow Jones credit card giant reaffirmed full-year EPS targets. Shares fell Friday.
MP Materials continued to surge as Apple committed $500 million to help launch a rare-earth metals recycling facility. The partnership includes a long-term supply agreement for MP to provide the iPhone maker rare earth magnets from 100% recycled materials. That followed the Defense Department's $400 million investment a week earlier, with an agreement to buy neodymium-praseodymium oxide for a minimum of $110 per kilogram, nearly double the market price. The deals mean that MP has essentially sold out its expanding capacity. MP will no longer be vulnerable to China's efforts to hold down rare-earths pricing to maintain dominance over the industry, Deutsche Bank said. Shares have nearly doubled in July.
Union Pacific jolted railroad stocks with news that it's on the prowl for an acquisition to create an intercontinental rail network. The Wall Street Journal reported late Thursday that merger talks with Norfolk Southern are ongoing. Norfolk and CSX operate networks across the Eastern U.S. Meanwhile, Union Pacific and BNSF, owned by Berkshire Hathaway, operate networks covering the western two-thirds of the U.S. CSX remained higher on the week amid speculation that BNSF could make an offer. An intercontinental railroad network is seen as possible under President Trump's antitrust policy. Consolidation could increase competition with the trucking industry.
