The S&P 500 closed at a new all-time high on Tuesday, although gains were modest as chip stocks stumbled and investors processed a flurry of corporate earnings reports.
By the close at 4:00 p.m. ET, the Dow Jones Industrial Average rose 170 points (0.40%), and the S&P 500 edged up 0.03% to a record close of 6,307.67. Meanwhile, the Nasdaq Composite slipped 0.4%, weighed down by losses in chipmakers.
Chip Stocks Fall as AI Project Gets Scaled Back
Shares of major semiconductor companies — including NVIDIA, Broadcom, and AMD — declined after The Wall Street Journal reported that SoftBank and OpenAI have scaled back their ambitious $500 billion Stargate AI project. Originally announced in January with plans for a major investment and large-scale data centers, the effort has now been reduced to building a single, smaller facility. The news dampened enthusiasm about the AI infrastructure buildout in the U.S., dragging down chip and broader tech stocks.
Texas Instruments is scheduled to report earnings after the closing bell.
Earnings Season Accelerates
More than 85% of S&P 500 companies are set to report earnings this week. So far, about 12% of the index has reported, with 86% exceeding earnings-per-share forecasts and 67% topping revenue estimates — strong results that contributed to record levels for the S&P 500 and Nasdaq in the previous session.
Individual Stock Moves
- Coca-Cola shares slipped nearly 1% despite beating earnings expectations, as the company faces tariff-related headwinds. It reaffirmed guidance at the high end of its forecast.
- General Motors dropped after reporting a sharp decline in second-quarter profits, mainly due to weakness in its North American segment.
- Northrop Grumman gained after raising its annual profit forecast, citing ongoing demand for defense products amid global tensions.
- Philip Morris fell as its second-quarter revenue missed estimates, despite continued growth in its smoke-free product line.
- D.R. Horton rallied after beating expectations for third-quarter earnings and delivering 23,160 homes — above its guidance range.
- Intuitive Surgical will report earnings after market close.
Focus on Tesla and Alphabet
All eyes are on Tesla and Alphabet, the first of the so-called “Magnificent Seven” tech giants to report this season. Both will release results on Wednesday.
Tesla faces additional scrutiny after California data showed a 21.1% drop in registrations during Q2. Investors will also be watching for any signs of how Trump’s tariffs are affecting corporate results.
Tariff and Interest Rate Concerns Linger
While the major U.S. indexes have hit record highs recently, momentum has slowed as traders remain cautious about upcoming tariffs and interest rate uncertainty.
Trump’s proposed tariffs — set to begin August 1 — include duties of 20% to 50% on goods from major U.S. trading partners, a 50% tariff on copper imports, and a possible 200% tariff on pharmaceuticals. These measures have raised concerns about inflation and potential impacts on business costs.
The Federal Reserve is expected to keep interest rates unchanged at its meeting next week, citing tariff uncertainty as a key reason. Fed Chair Jerome Powell is scheduled to speak at a conference in Washington D.C. later Tuesday, but he may avoid commenting on policy due to the Fed’s pre-meeting blackout period.
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