Stocks Rise on Tariff Relief, Near Record

Sam Stovall, Chief Investment Strategist at CFRA Research, discusses his S&P 500 target and whether he remains bullish on equities.

Stocks hovered near a record as President Donald Trump declared plans for a 100% tariff on chip imports, but vowed to exempt companies that invest in US. Trader sentiment was also buoyed by prospects of de-escalation of the war between Russia and Ukraine.

Following an almost 30% surge from its April lows, the S&P 500 kept climbing. The Nasdaq 100 rose about 1%. Apple Inc. extended a two-day surge to 8%. Intel Corp. slipped as Trump called on the chipmaker’s chief to resign because of what he called conflicts of interest.

Action in bonds was muted ahead of a $25 billion sale of 30-year Treasuries. The benchmark 10-year yield was little changed at 4.23%. The dollar was little changed.

“Overall, sentiment was positive toward global stocks, with investors buoyed by a blend of geopolitical optimism regarding Ukraine-Russia conflict, tariff exemptions for tech, and rising hopes of US interest rate cuts,” said Fawad Razaqzada at City Index and Forex.com

On the economic front, US continuing jobless claims rose to the highest since November 2021. Labor productivity rebounded along with the economy, resuming a trend of efficiency gains that are keeping a lid on wage-related inflationary pressures.

Meantime, the Bank of England cut rates to the lowest in over two years in a closer-than-expected decision that leaves investors with what Governor Andrew Bailey called “genuine uncertainty” on its next move. The pound jumped after the decision.

Corporate Highlights:

Eli Lilly & Co. tumbled as disappointing data on its new weight-loss pill overshadowed strong growth from the company’s current obesity medicine, which helped drive it to raise its yearly profit and sales outlook.

Peloton Interactive Inc. projected a sales decline for the current quarter and said it would once again cut jobs, but the company preached confidence in a turnaround plan under new management.

Airbnb Inc. slid after the short-term rental company warned that sales growth may moderate in the second half of the year.

Lyft Inc. reported revenue that fell short of Wall Street’s expectations in the second quarter, stoking concerns about its efforts to expand globally.

DoorDash Inc., the largest food delivery service in the US, issued an outlook for orders in the third quarter that surpassed Wall Street’s expectations, a sign that demand for its services remains resilient despite broader concerns about consumer spending.

Warner Bros. Discovery Inc., the parent of HBO and CNN, swung to a profit in the second quarter, buoyed by a string of successes at the box office.

Duolingo Inc. shares soared in post-market trading after it lifted its earnings forecast for the year, citing the better-than-expected performance of its subscription tiers over the second quarter.

Krispy Kreme Inc. will cut its ownership stake in its Western US joint venture as part of its turnaround plan, after the company ended its distribution partnership with McDonald’s Corp. last month.

Ralph Lauren Corp.’s sales topped Wall Street expectations in another sign that the apparel company can overcome sluggish demand in many parts of the consumer sector.

Crocs Inc. dropped after the shoe company said its efforts to save money amid consumer pressure and tariffs would drive down revenue.

Kenvue Inc. slashed its full-year sales target as demand continued to deteriorate and the company searches for a new chief executive officer to help reset the business.

Celsius Holdings Inc.’s second-quarter sales eclipsed expectations, largely driven by the recently acquired Alani Nu brand.

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