The S&P 500 Index ($SPX) (SPY) Monday closed up +0.14%, the Dow Jones Industrials Index ($DOWI) (DIA) closed down -0.04%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.50%. September E-mini S&P futures (ESU25) rose +0.19%, and September E-mini Nasdaq futures (NQU25) rose +0.54%.
Stock indexes mainly settled higher on Monday, with the S&P 500 and Nasdaq 100 posting new all-time highs. Stocks found support as the 10-year T-note yield fell by -5 bp to a one-week low of 4.37%. Also, the strength in chip stocks on Monday boosted technology stocks and led the broader market higher. On the negative side, natural gas producers retreated Monday after nat-gas futures fell more than -6% to a 1-week low.
Some favorable corporate news supported gains in stocks on Monday. Block rose more than +7% after S&P Dow Jones Indices announced that the company will replace Hess Corp in the S&P 500 before the opening of trade on Wednesday. Also, Verizon Communications rose more than +4% after raising the lower end of its full-year earnings forecast.
Recent trade news has put some downward pressure on stocks. Last Wednesday, President Trump announced that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1. Also, President Trump recently announced that the US will impose 30% tariffs on US imports from the European Union and Mexico, effective August 1. In addition, Mr. Trump said that a 35% tariff on some Canadian products would take effect on August 1, up from the current 25%.
The markets this week will focus on any tariff news along with the announcement of any new trade deals. On Wednesday, June existing home sales are expected to fall -0.7% m/m to 4.00 million. On Thursday, weekly initial unemployment claims are expected to climb by +6,000 to 227,000. Also, the July S&P US manufacturing PMI is expected to slip -0.4 to 52.5. Finally, on Thursday, June new home sales are expected to climb +4.3% m/m to 650,000. On Friday, June capital goods new orders nondefense ex-aircraft and parts are expected to increase by +0.2% m/m.
Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 58% at the following meeting on September 16-17.
The markets are awaiting a heavy slate of quarterly corporate earnings results this week, including Alphabet and Tesla on Wednesday. About one-fifth of the companies in the S&P 500 are expected to report their Q2 earnings results this week. Early results now show S&P 500 earnings are on track to rise +3.2% for the second quarter, better than the pre-season expectations of +2.8% y/y, according to Bloomberg Intelligence. Also, only six of the eleven S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research.
Overseas stock markets on Monday settled mixed. The Euro Stoxx 50 closed down -0.30%. China's Shanghai Composite rallied to a 9.5-month high and closed up +0.72%. Japan's Nikkei Stock 225 was closed today for the Marine Day holiday.
Interest Rates
September 10-year T-notes (ZNU25) on Monday closed up +13 ticks. The 10-year T-note yield fell -4.4 bp to 4.372%. Sep T-notes rose to a 1-week high on Monday, and the 10-year T-note yield fell to a 1-week low of 4.350%. T-notes rallied Monday on carryover support from last Friday when Fed Governor Christopher Waller said he backs a Fed rate cut at the July 29-30 FOMC meeting. T-notes also have carryover support from Monday's rally in 10-year German bunds to a 2-week high.
European government bond yields on Monday moved lower. The 10-year German bund yield fell to a 2-week low of 2.611% and finished down -8.2 bp to 2.613%. The 10-year UK gilt yield fell -7.1 bp to 4.603%.
Swaps are discounting the chances at 2% for a -25 bp rate cut by the ECB at Thursday's policy meeting.
US Stock Movers
Strength in chip stocks on Monday supported gains in the broader market. ARM Holdings Plc (ARM) closed up more than +3% to lead gainers in the Nasdaq 100. Also, Qualcomm (QCOM) closed up more than +2%. In addition, NXP Semiconductors NV (NXPI), Broadcom (AVGO), Lam Research (LRCX), and Applied Materials (AMAT) closed up more than +1%.
Block (XYZ) closed up more than +7% after S&P Dow Jones Indices announced that the company will replace Hess Corp in the S&P 500 before the opening of trade on Wednesday.
Verizon Communications (VZ) closed up more than +4% to lead gainers in the S&P 500 and Dow Jones Industrials after raising the lower end of its full-year earnings forecast to +1% to 3% from a previous estimate of 0% to +3%.
Pinterest (PINS) closed up more than +2% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $45.
Dollar Tree (DLTR) closed up more than +2% after Barclays upgraded the stock to overweight from equal weight with a price target of $120.
Equinix Inc. (EQIX) closed up more than +1% after Elliot Investment Management said it has built up a stake in the company in an effort to get it to take steps to boost its share price.
Invesco Ltd (IVZ) closed up more than +1% after TD Cowen upgraded the stock to buy from hold with a price target of $25.
Natural gas producers retreated Monday after nat-gas futures (NQQ25) plunged more than -6% to a 1-week low. As a result, EQT Corp (EQT) closed down more than -9% to lead losers in the S&P 500. Also, Antero Resources (AR) closed down more than -10%, Expand Energy (EXE) closed down more than -8%, Cheniere Energy (LNG) closed down more than -7%, and Coterra Energy (CTRA) closed down more than -5%.
Sarepta Therapeutics (SRPT) closed down more than -5% after it refused to pause all shipments of its Elevidys treatment after three deaths were linked to the company's gene therapies.
Molina Healthcare (MOH) closed down more than -3% after TD Cowen cut its price target on the stock to $283 from $369.
American Express (AXP) closed down more than -1% to lead losers in the Dow Jones Industrials after issuing $4 billion in debt securities due in four and seven years.
Biogen (BIIB) closed down more than -1% after Truist Securities downgraded the stock to hold from buy.
Centene (CNC) closed down more than -1% after TD Cowen downgraded the stock to hold from buy.
Earnings Reports (7/22/2025)
Avery Dennison Corp (AVY), Baker Hughes Co (BKR), Capital One Financial Corp (COF), Chubb Ltd (CB), Coca-Cola Co/The (KO), CoStar Group Inc (CSGP), Danaher Corp (DHR), DR Horton Inc (DHI), Enphase Energy Inc (ENPH), EQT Corp (EQT), Equifax Inc (EFX), General Motors Co (GM), Genuine Parts Co (GPC), Halliburton Co (HAL), Interpublic Group of Cos Inc/The (IPG), Intuitive Surgical Inc (ISRG), Invesco Ltd (IVZ), IQVIA Holdings Inc (IQV), KeyCorp (KEY), Lockheed Martin Corp (LMT), MSCI Inc (MSCI), Northrop Grumman Corp (NOC), PACCAR Inc (PCAR), Pentair PLC (PNR), Philip Morris International In (PM), PulteGroup Inc (PHM), Quest Diagnostics Inc (DGX), RTX Corp (RTX), Sherwin-Williams Co/The (SHW), Synchrony Financial (SYF), Texas Instruments Inc (TXN).
