The S&P 500 Index ($SPX) (SPY) Friday closed up +0.78%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.47%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.95%.  September E-mini S&P futures (ESU25) rose +0.84%, and September E-mini Nasdaq futures (NQU25) rose +1.05%.

Stock indexes settled higher on Friday, with the S&P 50 posting a 1-week high and the Nasdaq 100 setting a new record high.  Stocks are supported by robust corporate earnings results and hopes that the Fed will soon cut interest rates to support the economy. 

Monster Beverage rose more than +6% after beating Q2 EPS estimates.  Also, Expedia Group closed up more than +3% after reporting better-than-expected Q2 EPS and raising its full-year forecast.  On the negative side, Trade Desk plunged more than -38% after giving an outlook that analysts said was underwhelming.  Also, Microchip Technology fell more than -5% after pausing most factory expansions and cutting its full-year capital expenditures.   

Stocks extended their gains Friday after Bloomberg News reported that the US and Russia are aiming for a deal to end the war in Ukraine.  Russia said it would halt its offensive in the Kherson and Zaporizhzhia regions of Ukraine along the current battlelines as part of the deal if Ukraine cedes its entire eastern Donbas area to Russia as well as Crimea.   

Friday’s comments from St. Louis Fed President Alberto Musalem were slightly hawkish and bearish for stock and bonds when he said the Fed is missing more on the inflation side of its dual mandate, so "Given the economy where it stands today, it seems appropriate for the Fed to maintain the policy rate at a constant for now." 

Stocks are seeing support from speculation that weaker-than-expected US economic news and recent dovish Fed commentary will push the Fed to lower interest rates as soon as next month.  On Thursday, President Trump nominated Stephen Miran to be a temporary replacement for Adrianna Kugler as Fed Governor until the end of the year.  Miran is currently chairman of the Council of Economic Advisors and is seen as dovish and supporting President Trump’s calls for lower interest rates.  The chances of a Fed rate cut at the September FOMC meeting rose to 90% from 40% last Friday.

In recent tariff news, President Trump announced Wednesday that he will impose a 100% tariff on semiconductor imports.  Still, companies would be eligible for exemptions if they demonstrate a commitment to building their products in the US.  However, the US will levy a separate tax on imports of electronic products that employ semiconductors.  Also, President Trump announced Wednesday that he will double tariffs on US imports from India to 50% from the current 25% tariff, due to India’s purchases of Russian oil.  On Tuesday, Mr. Trump said that US tariffs on pharmaceutical imports would be announced “within the next week or so.” According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced. 

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 90% at the September 16-17 FOMC meeting and 63% at the following meeting on October 28-29.

Earnings reports released thus far suggest that S&P 500 earnings for Q2 are on track to rise +9.1% y/y, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence.  With over 82% of S&P 500 firms having reported Q2 earnings, around 82% exceeded profit estimates. 

Overseas stock markets on Friday settled mixed.  The Euro Stoxx 50 closed up +0.29%.  China’s Shanghai Composite closed down -0.12%.  Japan’s Nikkei Stock 225 climbed to a 2-week high and closed up sharply by +1.85%.

Interest Rates

September 10-year T-notes (ZNU25) on Friday closed down by -8.5 ticks.  The 10-year T-note yield rose +3.5 bp to 4.285%.  T-notes moved lower on Friday as strength in stocks has reduced safe-haven demand for government securities.  Also, rising inflation expectations are negative for T-notes as the 10-year breakeven inflation rate rose to a 1-week high Friday of 2.417%. T-note prices dropped to their lows on hawkish comments from St. Louis Fed President Alberto Musalem, who said inflation is still a problem.

Losses in T-notes were limited Friday after President Trump late Thursday nominated Stephen Miran for Fed Governor to replace Adriana Kugler for the rest of the year.  Miran views President Trump’s policies as disinflationary and would support a more dovish Fed policy. 

European government bond yields on Friday moved higher.  The 10-year German bund yield rose +6.0 bp to 2.690%.  The 10-year UK gilt yield rose +5.4 bp to 4.601%.

Swaps are discounting the chances at 9% for a -25 bp rate cut by the ECB at the September 11 policy meeting.

US Stock Movers

Gilead Sciences (GILD) closed up more than +8% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q2 product sales of $7.05 billion, above the consensus of $6.94 billion, and raising its full-year product sales forecast to $28.3 billion-$28.7 billion from a previous forecast of $28.2 billion-$28.6 billion.

Gen Digital (GEN) closed up more than +7% after reporting Q1 revenue of $1.26 billion, stronger than the consensus of $1.19 billion, and forecasting full-year revenue of $4.80-$4.90 billion, better than the consensus of $4.76 billion. 

Monster Beverage (MNST) closed up more than +6% after reporting Q2 net sales of $2.11 billion, stronger than the consensus of $2.08 billion. 

Apple (AAPL) closed up more than +4% to lead gainers in the Dow Jones Industrials and has rallied more than 12% in the last three sessions after President Trump on Wednesday said the company will announce that it will commit to spending another $100 billion on domestic manufacturing.

Expedia Group (EXPE) closed up more than +4% after reporting Q2 revenue of $3.79 billion, better than the consensus of $3.71 billion, and raising its full-year gross bookings forecast to +3% to +5% from a previous estimate of +2% to +4%, the midpoint above the consensus of +3.3%. 

Live Nation Entertainment (LYV) closed up more than +3% after reporting Q2 revenue of $7.01 billion, above the consensus of $6.89 billion. 

Tempus AI (TEM) is up more than +3% after reporting Q2 net revenue of $314.6 million, stronger than the consensus of $297.7 million. 

Tesla (TSLA) closed up more than +2% after it was granted a rideshare permit in Texas for operating its robotaxi service. 

Trade Desk (TTD) closed down more than -38% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q2 adjusted EPS of 41 cents, above the consensus of 40 cents but considered underwhelming by several analysts. 

Sweetgreen (SG) closed down more than -22% after reporting a Q2 EPS loss of -20 cents, wider than the consensus of -13 cents, and cut its full-year same-store sales forecast to down -4% to -6% from a previous forecast of no change. 

Twilio (TWLO) closed down more than -19% after forecasting Q3 adjusted EPS of $1.01-$1.06, weaker than the consensus of $1.14. 

Goodyear Tire & Rubber (GT) closed down more than -18% after reporting an unexpected Q2 loss per share of -17 cents versus expectations of a +19 cent profit. 

GoDaddy (GDDY) closed down more than -11% after it reported Q2 revenue of $1.20 billion, below the consensus of $1.21 billion. 

Pinterest (PINS) closed down more than -10% after reporting Q2 adjusted EPS of 33 cents, below the consensus of 36 cents. 

Microchip Technology (MCHP) closed down more than -6% after forecasting Q2 net sales of $1.11 billion-$1.15 billion, the midpoint right on the consensus of $1.13 billion, considered disappointing by analysts.   

Earnings Reports (8/11/2025)

AAON Inc (AAON), AST SpaceMobile Inc (ASTS), Celanese Corp (CE), Ralliant Corp (RAL), Roivant Sciences Ltd (ROIV).