Market Overview and Key Players
The S&P 500 and Nasdaq Composite extended their gains to record highs on Wall Street Monday, driven by positive news such as upcoming reports from Tesla and Alphabet this week and assurances that the United States will not face a recession.
- S&P 500 increased by 0.14% to 6,305.6 points
- Nasdaq Composite rose by 0.38% to 20,974.18 units
- Dow Jones Industrial Average remained virtually unchanged at 44,323.07 points
Among sectors, communications led the gains while energy led the declines.
Economic Indicators and Forecasts
The Conference Board’s leading economic index fell 0.3% in June, as expected according to a Bloomberg survey.
“The Conference Board does not forecast a recession, though economic growth is expected to slow considerably in 2025 compared to 2024,” said Justyna Zabinska-LaMonica, senior director of Economic Cycle Indicators at The Conference Board.
“Real GDP growth is projected to be 1.6% this year, and the impact of tariffs will become more apparent in the second half as consumer spending slows due to rising prices,” she added.
Corporate News and Stock Movements
Verizon Communications stocks rose 4.1%, the largest gain on the S&P 500, after raising the lower end of its full-year growth guidance following better-than-expected second-quarter results.
AES shares increased by 2.4% after Susquehanna raised its price target to $16 from $15 and maintained a positive rating.
Block’s stocks went up by 7.2%, as the company will join the S&P 500 starting Wednesday, replacing Hess. Molina Healthcare stocks fell by 3.7%.
TD Cowen lowered its price target from $369 to $283 and kept its “buy” recommendation.
Tech Giants’ Performance
Alphabet, the parent company of Google (+2.2%), recovered before its quarterly report on Wednesday. Both Alphabet and Tesla (-0.35%), which also reports on Wednesday, kick off the reporting season of the “Seven Majesties,” and their reports may set the tone for other large companies presenting results in the coming days.
Apple (+1.40%) and Amazon (+0.62%) also rose, contributing to the S&P 500’s gain.
With the August 1 deadline for tariffs imposed by Trump approaching, the S&P 500 has risen approximately 8% so far this year, as investors bet that the economic damage from tariffs will be less than feared.
Commerce Secretary Howard Lutnick expressed confidence on Sunday that the United States could reach a trade agreement with the European Union, even as EU members explored potential retaliatory measures.
Trump has threatened 30% tariffs on imports from Mexico and the EU, and has sent letters to other trade partners like Canada, Japan, and Brazil establishing tariffs ranging from 20% to 50%.
Investor Focus and Upcoming Data
As uncertainty surrounding trade remains a key concern for investors, Mexican stock markets started the week on a downward trend, influenced by local and international corporate financial news as well as the US trading environment with other nations.
- S&P/BMV IPC, Mexico’s primary stock market index, fell 0.77% to 55,841.30 points
- FTSE-BIVA, the most representative index of Mexico’s Institutional Securities Market, decreased by 0.86% to 1,122.39 units
The markets closely monitored the US trade policy to assess whether an agreement with the European Union and other countries receiving tariff implementation letters effective August 1 would be achieved.
“We maintain the view that the risk balance remains tilted negatively. Most factors injecting volatility into the market continue to stem from fluctuations in Donald Trump’s administration,” wrote Fernando Rodríguez, Invex analyst, in a report.
Key Questions and Answers
- Q: What drove the market surge? A: Positive news such as upcoming reports from Tesla and Alphabet, assurances of no US recession, and investor optimism regarding the potential impact of tariffs being less severe than feared.
- Q: How have key economic indicators performed? A: The Conference Board’s leading economic index fell 0.3% in June, with a projected real GDP growth of 1.6% for 2023 and tariff impacts expected to be more evident in the second half of the year.
- Q: Which stocks experienced significant movements? A: Verizon Communications (+4.1%), AES (+2.4%), Block (+7.2%), and Molina Healthcare (-3.7%).
- Q: What are the upcoming events influencing investor behavior? A: Investors will analyze unemployment claims data and the July business activity report, as well as listen to Fed Chair Jerome Powell’s speech for clues on potential interest rate cuts.
