Wall Street navigated inflation relief and renewed global tensions this week
Wall Street started the week on a cautious note as investors awaited progress on U.S.-China trade negotiations and key inflation data. Midweek, optimism took hold after a soft inflation reading and reports of potential tariff breakthroughs, which fueled a three-day win streak for the S&P 500 Index (SPX) and Nasdaq Composite (IXIC). Tech stocks helped lead the charge, brushing off earlier concerns and pushing both indexes closer to record highs.
But momentum faded heading into the weekend. Trade tensions flared again, while rising geopolitical uncertainty -- particularly from the Middle East -- rattled markets on Friday. Surging commodity prices only added to investor anxiety. As a result, the Dow Jones Industrial Average (DJI) is heading for a weekly loss and pacing for its worst day since May, while the S&P 500 and Nasdaq are still still holding onto modest weekly gains.
Surprises and Selloffs Define This Week’s Earnings Action
Earnings results painted a mixed picture this week. Oracle (ORCL) stock surged after a top- and bottom-line beat alongside upbeat guidance, while Semiconductor Manufacturing International (SMICY) climbed on strong May net revenue. On the flip side, Chewy (CHWY) eyed its worst single-day drop since 2023 following a surprise profit miss, and J.M. Smucker (SJM) sank to a five-year low after issuing a lackluster outlook. Elsewhere, Braze (BRZE) tumbled despite better-than-expected earnings, with the software stock logging its steepest drop since April.
Corporate Crossroads: Buyouts, Breakups, & Billion-Dollar Bets
Major moves in M&A and restructuring lit up the headlines this week. CureVac (CVAC) stock surged after BioNTech (BNTX) announced a major buyout of the vaccine maker, while Lockheed Martin (LMT) slipped despite inking a multi-billion-dollar U.S. Air Force deal. Walt Disney (DIS) build momentum following its final acquisition of Hulu, and Warner Bros Discovery (WBD) shares jumped after the company confirmed plans to split into three distinct entities. In the quantum space, Quantum Computing (QUBT) surged after landing a $1.3 billion contract that could reshape its industry footprint.
Crunch Time for the Fed and SPX
The upcoming holiday-shortened week features several potential market movers. The spotlight will be on the Federal Reserve's policy decision and press conference, with updated interest rate projections expected to shape sentiment. Investors will also keep an eye on key inflation data and consumer spending trends.
Meanwhile, Schaeffer’s Senior V.P. of Research Todd Salamone identifies favorable setups for bullish traders, while Senior Quantitative Analyst Rocky White outlines a short-term "V-bottom" signal forming on the S&P 500 Index (SPX).