Market Data as of Week Ending: 7/25/2025 unless noted otherwise
The S&P 500 and Nasdaq Composite advanced to new record highs for the second consecutive week, supported by corporate earnings and trade deals. So far, 34% of S&P 500 companies have reported earnings, with 80% beating EPS estimates, above the 5-year average of 78% and the 10-year average of 75%. The blended earnings growth rate is 5.8%, up from 5.6% last week and 4.9% at quarter end. Communication services and financials have been the biggest positive contributors to earnings growth, partially offset by negative impacts from the health care sector. Large and mid-sized companies outperformed their small company peers and value outperformed growth. All major economic sectors in the S&P 500 finished the week higher, with notable strength in health care, materials and industrials. Consumer staples were the worst-performing sector as consensus expectations for a decline of -3.0% have worsened since the start of the quarter. Foreign equities also delivered gains, as developed markets outperformed and emerging markets lagged their domestic counterparts.
Fixed-income results were positive despite mixed yield changes across the curve. The two-year Treasury yield narrowly increased by three basis points to 3.91%, while the ten-year yield fell by four basis points to 4.40%, narrowing the two-ten spread to 0.49%. Long-duration bonds outperformed short-duration bonds, while corporate bonds generally outperformed as credit spreads narrowed. Bond yields decreased for both investment-grade and high-yield corporate bonds, ending the week at 5.07% and 7.33%, respectively.
Economic data delivered mixed signals as investors look ahead to the July Fed meeting and the upcoming GDP report. The Leading Economic Index (LEI) declined by 0.3% in June due to low consumer expectations, weak new orders in manufacturing and a third consecutive month of rising initial claims for unemployment insurance. Weekly initial jobless claims fell by 4,000 to 217,000 in the third week of July, well below expectations of 227,000. It marked a sixth straight decline and the lowest level since April. However, continuing claims increased to 1.955 million and remain near a post-2021 high, signaling slower hiring despite low unemployment. Housing data came in below expectations as high mortgage rates and economic uncertainty have led many buyers to delay purchasing decisions. Existing home sales dropped -2.7% in June, touching a nine-month low at 3.93 million units annualized, and new home sales increased by 0.6% (627,000 units annualized) but came in much lower compared to last year, down -6.6%. Durable goods (excluding transportation) beat expectations with an increase of 0.2% in June and marked the third consecutive month of gains. S&P Global reported an increase in overall U.S. business activity in July, with the composite PMI rising to a seven-month high of 54.6. The services sector drove the expansion, with its PMI climbing to 55.2, while manufacturing contracted, falling to 49.5, its lowest level since December.