S&P 500 Logs Fifth Straight Record Close as Tech Earnings Impress

The stock market last week had a mixed performance across major indexes, largely influenced by corporate earnings reports and ongoing discussions around trade tariffs. Both the S&P 500 and the NASDAQ reached new record highs last week, driven by strong performances from several big tech companies, which reported better-than-expected profits. In fact, last Friday’s gains marked the fifth straight record close for the S&P 500. Last week was a busy one for second-quarter earnings. Many companies exceeded expectations, while those that missed expectations saw sharp sell-offs. Tariffs remained a significant factor impacting market sentiment. While there’s some enthusiasm for trade deals, the impact of increased tariffs has impacted some market sectors. Speaking of market sectors, 10 of the 11 S&P sectors ended higher last week, with only Consumer Staples closing the week in the red. Treasury yields showed some movement, with the 10-year Treasury yield easing somewhat. Crude oil prices settled at $65.04, marking their lowest price since June 30, as concerns over a weakening economy brought fears of waning demand.

Durable Goods Orders Drop in June on Sharp Decline in Transportation Equipment

New orders for manufactured durable goods in June, down two of the last three months, decreased $32.1 billion, or 9.3%. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders decreased 9.4%. Transportation equipment was a major contributor to the overall decrease, falling $32.6 billion, or 22.4%. New orders for nondefense capital goods in June decreased $31.4 billion, or 24.0%. New orders for defense capital goods in June decreased $2.0 billion, or 10.2%.

Eye on the Week Ahead

Two very important market-moving reports are out this week. The first estimate of gross domestic product for the second quarter is released this week. The economy contracted 0.5% in the first quarter. The Federal Open Market Committee (FOMC) meets this week. It is possible that the FOMC may decide to reduce the federal funds rate at this time, although there appears to be some disagreement among Committee members as to the timing of an interest rate reduction.