Market Data as of Week Ending: 7/18/2025 unless noted otherwise
The S&P 500 and Nasdaq Composite hit new record highs during the week, driven by strong corporate earnings and broadly positive economic data. Early earnings results (12% of companies in the S&P 500) show stronger-than-expected earnings, as 83% beat EPS estimates — above 5-year (78%) and 10-year (75%) averages. The blended earnings growth rate is 5.6%, up from 4.4% last week and 4.9% at quarter end. Financials have been the biggest positive contributor to earnings growth, while health care has had a slight negative impact. Large-sized companies outperformed their small and mid-sized peers and growth outperformed value. Most major economic sectors in the S&P 500 finished the week higher, with notable strength in information technology, utilities, industrials, and financials. Energy was the worst-performing sector as the price of oil declined on a mix of weaker demand outlooks, subdued geopolitical support, and modest supply. Foreign equities were mixed, as developed markets declined and emerging markets surged higher and outperformed their domestic counterparts.
Fixed-income results were mixed across the curve. The two-year Treasury yield narrowly decreased two basis points to 3.88%, while the ten-year yield rose by one basis point to 4.44%, widening the two-ten spread to 0.56%. Short-duration bonds outperformed long-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 5.12% and 7.38%, respectively.
Economic data generally came in better than expected, despite the headline CPI increasing 0.3%, the biggest gain in five months. Core CPI rose 0.2% in June 2025, slightly below expectations and following a 0.1% gain in May. This marked the fifth straight month of core inflation coming in below forecasts. Compared to the same period last year, prices rose 2.7% and Core CPI climbed 2.9%, well above the Fed’s target of 2%. Prices for household items, recreational products, and footwear have picked up since April, though some of that pressure was eased by declining vehicle prices. Both headline and core measures of PPI came in flat for the month of June, which was lower than expected. Inflation reports did little to change investor expectations as a Fed rate cut remains unlikely next week. Retail sales surged 0.6% in June (3.9% y/y), following declines in the two months prior and beating expectations of a 0.1% gain. The largest gains were in sales at miscellaneous store retailers (1.8%), motor vehicles and parts (1.2%), building material and garden equipment (0.9%), and clothing (0.9%). The control group (excluding food services, auto dealers, building materials stores, and gasoline stations in the US, which is used to calculate GDP) was also up 0.5%. Housing starts and building permits rose to 1.321 million and 1.397 million, respectively, but both remain subdued and close to their lowest levels in five years.