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This article covers a dynamic week in financial markets, highlighting Tesla's underwhelming quarterly results and Alphabet's strong earnings performance. Attention now shifts to upcoming earnings from tech giants Microsoft and Amazon, alongside a Federal Reserve interest rate decision. A significant focus is on TKO Group, formed by the WWE-UFC merger, following the death of wrestling legend Hulk Hogan at 71 from cardiac arrest. Hogan, a pivotal figure in popularizing wrestling globally during the 1980s, leaves behind a robust WWE business within TKO. The company recently secured a landmark 10-year, $5 billion deal to stream "Raw" on Netflix and reported impressive quarterly growth with a 23% sales increase and 38% rise in operating profits. TKO's stock has surged 57% over the past year, earning bullish ratings from most analysts. The article also notes WWE's potential for further international expansion and a new WWE Network deal in 2026, with earnings set for August 5. Additionally, it touches on broader market drama involving political and economic figures, underscoring a busy period for investors.
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US stocks hovered near record highs on Friday, with the Dow Jones, S&P 500, and Nasdaq each gaining roughly 0.1%, as investors digested a week of major earnings and trade news. A US-Japan trade agreement lifted spirits, though tensions over a $550 billion investment fund's profit-sharing terms and a looming US-EU deal added uncertainty. President Trump's unexpected Federal Reserve visit, initially raising fears of a clash with Chair Jerome Powell, ended with reassurances against dismissal, calming markets. Intel's stock fell despite strong earnings, hurt by layoffs and a pivot to internal manufacturing focus, casting doubt on its recovery. Meanwhile, crypto stocks declined as the US dollar strengthened, and Phillips 66 saw gains from robust refining margins. Investors are now eyeing a critical week ahead, featuring the Fed’s policy meeting, a US jobs report, earnings from giants like Apple and Microsoft, and an August 1 deadline for trade deals to avert tariff hikes. While optimism persists, some on Wall Street question if the rally is driven by FOMO rather than fundamentals, prompting profit-taking ahead of these pivotal events.
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Kia Corp, South Korea's prominent automaker and the world’s third-largest alongside Hyundai Motor, disclosed a substantial financial setback of 786 billion won ($570 million) due to U.S. tariffs in the second quarter of the year. This contributed to a 24% plunge in operating profit, which fell to 2.76 trillion won compared to the same period last year. Despite the profit downturn, Kia managed a 5% rise in U.S. sales, fueled by consumers purchasing vehicles ahead of anticipated price hikes resulting from the tariffs. The company also benefited from robust sales of its new Carnival hybrid SUV during the April to June timeframe. Meanwhile, South Korea is engaging in discussions to delay the imposition of these U.S. tariffs and seeks cooperation in mutual areas. Following the financial report, Kia’s shares dropped by 1.7%, reflecting investor concerns over the impact of tariffs on the company’s profitability.
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New U.S. single-family home sales in June grew by a modest 0.6% to an annualized rate of 627,000 units, falling short of economists' expectations of 650,000 units, as reported by the Commerce Department's Census Bureau. This slowdown, attributed to mortgage rates hovering just under 7% for a 30-year fixed-rate loan, has led to an inventory of unsold homes reaching 511,000 units—the highest since October 2007. With a supply duration of 9.8 months, the glut is pressuring prices, with the median new home price dropping 2.9% to $401,800 year-over-year. Builders are increasingly cutting prices to attract buyers, a trend noted in a recent National Association of Home Builders survey. Regionally, sales rose in the South and Midwest but plummeted in the Northeast and West. Meanwhile, the Federal Reserve, having cut rates three times in 2024, is expected to maintain its benchmark rate between 4.25%-4.50% at its upcoming meeting. Economic concerns, including potential inflation from protectionist trade policies, alongside declining homebuilding and permits, suggest residential investment will continue to drag on GDP growth in the second quarter.
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President Trump has introduced a new tariff baseline of 15% to 50% for US trading partners, with higher rates for less cooperative nations, as announced at an AI summit in Washington, DC. This shift from the previous 10% rate coincides with progress on trade deals, including a 15% tariff agreement with Japan, which also involves a $550 billion investment in the US. A similar deal with the EU is nearing completion, potentially at 15% instead of the threatened 30%, though the EU has prepared retaliatory tariffs on over $100 billion of US goods if negotiations fail. Additional agreements with the Philippines and Indonesia set tariffs at 19%, with favorable terms for US exports. Meanwhile, potential deals with India and Canada face higher proposed tariffs of 25% to 35%. The tariffs are already impacting industries, with Brazil's citrus sector reeling from a possible 50% rate and Keurig Dr. Pepper reporting a 22% drop in brewer sales due to tariff-related pressures and commodity inflation. These trade policies are creating global economic ripples, influencing prices, production, and business strategies even before full implementation.
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A critical security vulnerability in Microsoft’s SharePoint servers has led to a sharp rise in cyberattacks, with over 400 organizations compromised, a six-fold increase in days, as reported by Eye Security. Predominantly affecting US entities, the breaches also span Mauritius, Jordan, South Africa, and the Netherlands, impacting key institutions like the US National Nuclear Security Administration and the National Institutes of Health. Microsoft has pointed to Chinese state-sponsored groups, including Linen Typhoon and Violet Typhoon, as culprits, escalating US-China cybersecurity tensions. The flaws enable hackers to steal access keys and infiltrate networks, though patches have been issued. Experts caution that the actual victim count may be underreported, with potential for deeper espionage across government, education, and tech sectors worldwide. While no data breaches are confirmed, the US and affected nations are collaborating with Microsoft to mitigate risks. This incident underscores ongoing global cybersecurity challenges and the sophisticated nature of state-backed hacking campaigns.
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President Donald Trump has signaled a tougher stance on trade by setting a minimum tariff rate of 15%, up from a previously mentioned 10%, with potential rates reaching 50% for some countries, as part of his reciprocal tariff policy ahead of an August 1 deadline. Speaking at an AI summit in Washington, Trump outlined plans to impose duties on nearly all US trading partners, with over 150 countries receiving tariff notifications. While smaller nations in Latin America, the Caribbean, and Africa may face a 10% baseline, larger economies are under pressure to negotiate. Japan recently secured a reduction from 25% to 15% by easing restrictions on US products and supporting a $550 billion investment fund, with South Korea and the Philippines pursuing similar deals. The European Union and India are also pushing for agreements to mitigate tariff impacts. Trump has downplayed extensive negotiations, framing tariff letters as "deals," though he remains open to lowering rates for countries that expand market access for American businesses. Meanwhile, Vietnam fears a drastic reduction in US exports—potentially by a third—if higher tariffs take effect, underscoring the global economic stakes. These policies reflect Trump's aggressive approach to reshaping trade relationships, with significant implications for international commerce.
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The European Union has threatened to impose 30% tariffs on over $100 billion of US goods, including Boeing aircraft and whiskey, if no trade deal is reached by August 1, in response to potential US tariffs of the same rate. Meanwhile, President Trump announced new trade agreements with Japan, the Philippines, and Indonesia, featuring significant investments and reduced tariffs on US exports, with Japan committing $550 billion. Trump also advocated for zero tariffs on US goods in exchange for market access, as tensions rise with larger trade partners like the EU, India, and Canada, where he has threatened tariffs of 25% to 35%. Detroit automakers criticized the US-Japan deal for favoring Japanese imports over North American ones, while European auto stocks rallied on hopes of similar deals. However, trade uncertainties negatively impacted companies like SAP, despite strong cloud revenue growth. The global trade landscape remains volatile as Trump plans to set blanket tariff rates for over 150 smaller trade partners and as ships rush to US ports to avoid impending tariffs on goods like copper.
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GoPro (GPRO) and Krispy Kreme (DNUT) have emerged as the latest focal points in a meme stock resurgence dominating markets this summer. On Wednesday, GoPro's stock surged up to 90% in premarket trading before settling at a 40% gain, while Krispy Kreme rose as much as 70% before moderating to a 26% increase. This follows significant rallies for Opendoor (OPEN) and Kohl's (KSS) earlier in the week, though both saw declines exceeding 10% on Wednesday. Despite the hype, both GoPro and Krispy Kreme reported revenue drops in Q1 2025, with GoPro down 13% to $134.3 million and Krispy Kreme down 15% to $375.2 million. GoPro, once a high-flying stock post its 2014 IPO, has lost nearly 98% of its value, while Krispy Kreme's stock remains above $5 after a pandemic peak. Unlike other meme stocks with high short floats, GoPro's is under 10%, compared to Krispy Kreme's 28%, Opendoor's 21%, and Kohl's 49%. This retail investor-driven frenzy echoes the 2020-2021 GameStop rally, with both companies set to report earnings in August.
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Tesla (TSLA) faces significant challenges as it approaches its Q2 2025 earnings report, with stock down 18% year to date amid a rocky relationship between CEO Elon Musk and President Trump, impacting late-2024 optimism. The core auto business, Tesla’s primary revenue source, is under pressure with expected Q2 revenue of $22.79 billion, a 9% drop, and a 13.5% decline in global deliveries. Regional weaknesses, competition, and consumer shifts to hybrids add to concerns. Meanwhile, Musk’s focus on robotaxis offers hope, with testing expanding in Austin, though Tesla trails competitors like Waymo and Uber. Investors are eager for updates on a cheaper EV, promised at around $30,000, but delays to Q4 2025 seem likely, potentially disappointing stakeholders. Additionally, tariffs on foreign cars, Musk’s political reputational hit, and the possibility of a future share sale to fund autonomous vehicle and AI initiatives further cloud Tesla’s outlook. As the S&P 500 and Nasdaq hit new highs, Tesla’s earnings call will be critical for insights into its struggling auto segment, robotaxi plans, and new vehicle timelines.
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Treasury Secretary Scott Bessent has taken a critical stance on the Federal Reserve, targeting its non-monetary operations and regulatory framework while stopping short of demanding Fed Chair Jerome Powell’s immediate resignation. Despite President Trump’s calls for Powell to step down, Bessent stated on Fox Business that Powell could serve until his term ends in May. However, Bessent intensified pressure on the Fed by questioning its $2.5 billion headquarters renovation and urging a review of its broader operations, arguing they jeopardize its monetary policy independence. At a Fed conference, he pushed for significant reforms in bank regulations, criticizing outdated capital requirements and a proposed dual capital structure. Bessent, a potential successor to Powell, supports the Fed’s autonomy in monetary policy but aligns with White House efforts to control other Fed functions, like bank supervision. Additionally, he aims to overhaul financial regulations to facilitate lending and stimulate economic growth, with the Treasury playing a central role in driving consensus and action. Recent proposals to rollback bank capital rules, such as the enhanced supplementary leverage ratio, signal further regulatory changes ahead, though their impact on banks may be limited. Bessent’s actions reflect a broader push for innovation and financial stability under the current administration.
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President Donald Trump’s recently enacted tax and spending law, dubbed the “One Big Beautiful Bill,” is projected to add $3.4 trillion to US deficits over the next decade, according to the Congressional Budget Office (CBO). Signed on July 4, the legislation extends Trump’s 2017 income-tax cuts, offers business breaks, lifts state and local tax deduction caps, and temporarily eliminates taxes on tips and overtime. However, it also slashes spending by $1.1 trillion while cutting revenues by $4.5 trillion through 2034. The law includes Medicaid cuts and new work requirements, leading to an estimated 10 million Americans losing health insurance by 2034. Economists warn that the expanding budget shortfall, already significant, could increase borrowing costs and inflation, exacerbated by tariff-driven price rises impacting low-income families. The Trump administration claims tariff revenues will offset deficits, though concerns persist. An alternative scoring requested by Senate Republicans shows a $366 billion deficit reduction over a decade, achieved through accounting tactics that minimize the perceived cost of tax cut extensions. This law, reflecting much of Trump’s economic agenda, has sparked debate over its long-term fiscal and social consequences.
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The Los Angeles Times, a 143-year-old publication, is set to go public within the next year, as announced by its billionaire owner, Patrick Soon-Shiong, during an interview on "The Daily Show" with Jon Stewart. Soon-Shiong aims to democratize ownership of the newspaper by adopting a model similar to the public ownership structure of the NFL's Green Bay Packers, with a partner organization working on the framework. This decision comes after a tumultuous period for the LA Times, marked by significant financial losses of $30-40 million annually and substantial layoffs in January, where over 20% of the newsroom staff were cut. Leadership changes have also rocked the paper, with key exits including Executive Editor Kevin Merida and Managing Editor Sara Yasin. Additionally, controversy arose when the editorial editor resigned after Soon-Shiong reportedly blocked an endorsement of then-Vice President Kamala Harris, sparking subscriber backlash. Soon-Shiong, who acquired the LA Times in 2018 for $500 million from Tronc, is steering the newspaper toward a new era of public involvement amidst ongoing challenges. The LA Times did not immediately respond to Reuters for further details on the public offering plans.
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The European Union is gearing up for a potential trade war with the US as President Trump pushes for higher tariffs, threatening a no-deal outcome by the August 1 deadline. The EU is drafting retaliatory measures, including restrictions on US digital services and public procurement access, while member states like Germany signal readiness for conflict if negotiations fail. Trump’s proposed tariffs range from 15-20% on EU goods to 50% on Brazilian imports, disrupting months of talks and affecting global trade partners like Canada and Mexico. US industries, such as steelmaker Cleveland-Cliffs, welcome the protectionist policies, but retailers struggle with uncertainty over import costs for holiday goods. Treasury Secretary Scott Bessent prioritizes high-quality deals over rushed agreements, leaving room for deadline flexibility, while countries like Brazil brace for economic redirection if tariffs hit. The escalating tensions highlight the delicate balance of trade negotiations and the broader economic implications worldwide.
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A growing number of non-banking companies, including automakers like General Motors and Stellantis, and cryptocurrency firms like Circle and Ripple, are applying for US banking charters, sparking tension with traditional banks. These new entrants seek charters such as industrial loan company (ILC) status or national trust banking charters, which could allow them to offer banking services with less stringent regulations. Banks and lobbying groups like the Bank Policy Institute and ICBA oppose this, arguing it creates a regulatory double standard and poses risks, citing past failures like GMAC’s 2008 collapse. Meanwhile, the Trump administration is reviewing financial regulations, potentially easing rules for banks and new entrants alike, while the FDIC is adjusting its approach to ILC approvals. Crypto and fintech firms are also pursuing charters to gain credibility and comply with new laws like the GENIUS Act, as even major banks like JPMorgan explore stablecoin innovations. This clash over banking access highlights broader concerns about competition, consumer safety, and the evolving financial landscape.
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The S&P 500 and Nasdaq Composite are close to record highs, showing resilience amid escalating tariffs and monetary policy debates, with the Nasdaq gaining over 1.6% and the S&P 500 up 0.7% last week. A significant earnings season is underway, with 112 S&P 500 companies, including Alphabet, Tesla, and Chipotle, set to report, and Big Tech expected to lead with a 14.1% earnings growth compared to the rest of the index at 3.4%. Federal Reserve governor Christopher Waller has called for an interest rate cut in July, citing inflation near target, though market expectations for a cut have diminished to just 5% due to persistent inflation and robust economic indicators like retail sales. Meanwhile, a quiet week of economic data will focus on manufacturing and services sectors as the Fed enters a blackout period before its July 29-30 meeting. Despite strong earnings from companies like Netflix and big banks, stock reactions have been muted due to high valuations and elevated expectations, raising concerns among strategists about potential pullbacks if results disappoint. The market anticipates a broadening of earnings growth beyond Big Tech in coming quarters, which could support a more sustained rally if cyclical sectors show improvement.
