Non Profitable Tech Stocks Partying Like It's 1999
Wall Street closed its third winning week in the last four with a quiet finish on Friday.
The S&P 500 edged down by a whisper, less than 0.1 per cent, after setting its all-time high the day before. The Dow Jones Industrial Average fell 142 points, or 0.3 per cent, and the Nasdaq composite edged up by less than 0.1 per cent to add its own record.
Norfolk Southern chugged 2.5 per cent higher after an AP source said it’s talking with Union Pacific about a merger to create the largest railroad in North America, one that would connect the East and West coasts. Any such deal, though, would likely face tough scrutiny from U.S. regulators. Union Pacific’s stock fell 1.2 per cent.
The heaviest weight on the market, meanwhile, was Netflix, which fell 5.1 per cent despite reporting a stronger-than-expected profit. Analysts said it wasn’t a surprise given the stock had already soared 43 per cent for the year so far coming into the day, six times more than the gain for the S&P 500.
American Express likewise delivered a better-than-expected profit report, but its stock lost 2.3 per cent. Analysts pointed to slowing growth in some underlying trends, such as the number of cards it issued.
Exxon Mobil sank 3.5 per cent and also tugged on the market. It had been challenging Chevron’s US$53 billion deal to buy Hess, but an arbitration ruling in Paris about Hess assets off Guyana’s coast allowed the buyout to go through. Chevron fell 0.9 per cent after losing an early gain.
Stronger-than-expected profit reports for the spring did help several stocks rally. Charles Schwab climbed 2.9 per cent, Regions Financial jumped 6.1 per cent and Comerica added 4.6 per cent.
All told, the S&P 500 slipped 0.57 to 6,296.79 points. The Dow Jones Industrial Average dropped 142.30 to 44,342.19, and the Nasdaq composite rose 10.01 to 20,895.66.
In the bond market, Treasury yields eased after a report suggested U.S. consumers may be feeling less fearful about coming inflation. They’re bracing for inflation of 4.4 per cent in the year ahead, down from last month’s projection of 5 per cent, according to preliminary results from a University of Michigan survey.
That’s important because expectations for high inflation can feed into behaviors that create a vicious cycle that keeps inflation high. Overall sentiment among consumers, meanwhile, was a hair better than economists expected but still well below its historical average.
“Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,” according to Joanne Hsu, the survey’s director.
The yield on the 10-year Treasury sank to 4.42 per cent from 4.47 per cent late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the U.S. Federal Reserve will do with its short-term rates, also dropped. It fell to 3.87 per cent from 3.91 per cent.
A top U.S. Fed official, Gov. Chris Waller, said late Thursday that the Fed should cut its overnight interest rate as soon as its next meeting in a couple weeks. That follows sharp criticism from President Donald Trump, who has been castigating the Fed for holding interest rates steady this year instead of cutting them, as it did late last year.
Lower rates could give the economy a boost, and Trump has implied they could help the U.S. government save money on its debt payments, though that’s uncertain. The interest rates Washington has to pay on its longer-term debt can depend more on what bond investors think than on what the U.S. Fed does, and they can even move in opposite directions.
The chair of the U.S. Fed, meanwhile, has been insisting that he wants to see more data about how Trump’s tariffs will affect the economy and inflation before the Fed makes its next move. The downside of lower interest rates is that they can give inflation more fuel, and prices may already be starting to feel the upward effects of tariffs.
Traders on Wall Street think it’s much more likely that the Fed will resume cutting interest rates in September, rather than later this month, according to data from CME Group.
In stock markets abroad, indexes were mixed across Europe and Asia. Hong Kong’s Hang Seng jumped 1.3 per cent, but Tokyo’s Nikkei 225 slipped 0.2 per cent ahead of an election for the upper house of parliament on Sunday that could wipe out the ruling coalition’s upper house majority.
Pia Singh and Sean Conlon aslo report Dow closes more than 100 points lower after report says Trump seeks at least 15% tariff on EU imports:
The Dow Jones Industrial Average slid Friday after President Donald Trump reportedly pushed for greater tariffs on the European Union.
The 30-stock Dow fell 142.30 points, or 0.32%, settling at 44,342.19. The S&P 500 lost 0.01% after hitting a record high earlier in the day, ultimately closing at 6,296.79. The Nasdaq Composite added 0.05%, ending at 20,895.66.
Trump is demanding a minimum tariff of between 15% and 20% in any deal with the EU, the Financial Times reported, citing three people briefed on the talks. The EU is attempting to reach a trade deal with the U.S. ahead of Trump’s Aug. 1 deadline, when Trump has vowed to begin implementing 30% tariffs on the bloc.
Traders also pored through the latest earnings reports and new U.S. economic data.
Data released Friday reflected a drop in consumers’ fears about tariff-induced inflation down to their lowest levels since February. The University of Michigan’s Survey of Consumers for July reflected overall consumer sentiment rose 1.8% from June to 61.8, coming out exactly in line with the estimate and at the highest level since February.
On the earnings front, Netflix slid 5% after the company said its operating margin in the second half of this year will be lower than the first. Shares of 3M fell more than 3% after the company revised its organic sales growth forecast to reflect a gain of 2%. It previously gave a growth range of the “lower end of 2% to 3%.” A 2% post-earnings slide in American Express dragged the Dow lower.
Despite the mixed reaction to the latest corporate report, the season is off to a strong start.
With 12% of S&P 500 companies reporting results so far, 83% have beaten estimates. On Thursday, PepsiCo and United Airlines shares both popped after the respective companies beat analyst estimates on earnings. Those follow solid results from big banks like JPMorgan and Goldman Sachs earlier in the week.
Both the S&P 500 and Nasdaq posted weekly gains, rising 0.6% and 1.5%, respectively. The Dow was marginally lower on the week.
“It’s a risk-on environment, and while there’s chatter about Fed cuts, the reality is more nuanced,” said Ken Mahoney, CEO at Mahoney Asset Management. “Historically, bull cycles tend to perform better without rate cuts and the first cut is often a bearish signal, though there’s a valid case to be made this time around, especially with inflation cooling and GDP growth projections still intact after we got through the threat of massive tariffs.”
Mag 7 tech stocks to begin reporting next week
Magnificent Seven earnings are kicking off next week, with Alphabet and Tesla the first of the megacaps to report this earnings season. Their results will come at a time when the S&P 500 is approaching all-time highs, powered by ongoing enthusiasm in the AI trade alongside a strong corporate earnings season so far.
Together, the megacap companies are projected to post earnings growth of over 14% in the second quarter, while the other 493 S&P 500 companies that are set to grow just 3.4%, according to FactSet’s John Butters.
For more on analysts’ expectations and the week ahead, read here.
Bret LoGiurato of Yahoo Finance also reports Nasdaq hits record, S&P 500 posts weekly gain, Dow slips as Wall Street shrugs off tariff tensions:
US stocks were little changed on Friday as the market largely shrugged off tariff tensions amid fresh data that signaled the economy remains on solid footing.
The tech-focused Nasdaq Composite (^IXIC) rose slightly to notch a new record. Meanwhile, the Dow Jones Industrial Average (^DJI) fell 0.3%, and the S&P 500 (^GSPC) fell below the flatline.
The S&P 500 and Nasdaq trimmed early gains to hover near the flatline after the University of Michigan consumer sentiment survey showed one-year inflation expectations plunging to 4.4% from 5% in June.
Stocks consolidated for much of the session after the S&P 500 and Nasdaq Composite vaulted to fresh closing highs on Thursday. Wall Street welcomed economic data which showed little indication that President Trump's tariffs are affecting consumer spending habits.
Meanwhile President Trump is reportedly pushing for higher blanket tariffs on imports from the European Union, throwing a wrench in negotiations ahead of an Aug. 1 deadline for sweeping duties to take effect. The Financial Times reported that Trump wants a minimum of a 15% to 20% tariff on EU goods as part of any deal.
Netflix's second quarter results failed to enthuse the market, dragging on the stock. The streaming giant kicked off Big Tech earnings late Thursday with a wide profit beat and a solid revenue number. But investors likely wanted a bigger boost to full-year guidance to justify a raise on an already lofty valuation, analysts suggested.
Meanwhile, American Express (AXP) strong quarterly results underscored high-end consumers are still spending.
This week's drama involving Trump's fury with Fed Chair Jerome Powell largely moved to the back burner. Powell sent a letter to Trump's top budget official on Thursday, defending the Fed's headquarters renovation project for which he has come under fire in recent days.
But already, the focus is turning to who could replace Powell next year and the additional dual mandate that person will face: keeping Trump happy while attempting to maintain the Fed's independence.
CRISPR Therapeutics shares soar after board director buys $51 million worth of stock
CRISPR Therapeutics (CRSP) stock surged 17% on Friday, putting it on track for a 52-week closing high, after board director Simeon George bought approximately $51.5 million worth of the company’s stock.
According to a Securities and Exchange Commission filing detailing the insider trade, George purchased 989,812 common shares on July 16 for $52.03 per share.
CRISPR Therapeutics uses gene-editing technology to develop medicines for serious diseases. The stock traded above $64 on Friday afternoon.
It was a relatively quiet week in markets, most traders and investors are on vacation this time of year but there will be plenty of Q2 earnings to digest over the next two weeks.
Still there's plenty of stock specific news that is positive.
Shares of CRISPR Therapeutics (CRSP) surged 18% on Friday closing at a 52-week high of $65.13:
I've been tracking biotech shares intensely over the past ten years and this one is a leader in gene editing and will likely get bought out.
Why am I saying this? Lilly recently acquired Verve (VERV) in $1 billion bet on gene editing for heart disease and that was a very wise acquisition because Verve has a potential game changer to treat cholesterol (a smart cardiologist told me about it 4 years ago).
What else moved big this week? Shares of QuantumScape Corporation (QS) took off hitting a new 52-week high:
Philippe Lafont's Coatue owns this along with many other tech high flyers (see his full portfolio here).
Anyway, here were all the high flyers this week in the US stock exchanges (data from barchart.com):
I recommend you always look at what is going up and down every week, month and quarter.
Why am I sharing all this with you here? Because Goldman Sachs’ Non-Profitable Tech Index is up 66% since hitting its low in April and partying like it's 1999:
Party like it’s 1999: Goldman Sachs’ Non-Profitable Tech Index is up 66% since hitting its low in April. pic.twitter.com/HRhbgmaDm5
— Holger Zschaepitz (@Schuldensuehner) July 18, 2025
Let that sink in, this is a liquidity driven rally and some think the Fed needs to cut rates here.
Go figure. All I know, if the Fed does cut rates, markets will sell off hard (initially).
Below, the CNBC Investment Committee debate the future of the rally as we head into earnings season with 20% of the S&P reporting next week.
Next, the 'Fast Money' traders look ahead to next week's big tech earnings.
Third, Dan Nathan welcomes Dan Niles, founder and portfolio manager at Niles Investment Management. They discuss Niles' approach to investment transparency and review his recent mid-year market update. The conversation covers the U.S.-China race in AI technology, macroeconomic trends, and the impact of tariffs. Niles highlights the performance and strategies of major tech companies including Nvidia, Microsoft, and their implications on the market.
They also explore the potential overbuild in AI infrastructure and future market corrections. Additionally, Niles provides insights on the significance of macroeconomic indicators like debt-to-GDP ratios and the importance of valuations, emphasizing the interconnectedness of global markets.
Fourth, Federal Reserve Governor Christopher Waller spoke on Bloomberg saying worries about hiring in the private sector have driven his call for the central bank to cut rates this month.
He hinted he would dissent if his colleagues vote to hold interest rates steady at their July meeting, making his case for a rate cut to support the labor market. While it’s important not to dissent regularly, officials should take the step “if you make it very clear you think at this moment in time this is an important thing to do,” Waller said Friday in a Bloomberg TV interview.
Lastly, Jim Bianco joins Bloomberg to discuss Fed Governor Christopher Waller's recent comments, effects of the GENIUS Act on the U.S. dollar and bond yields, and Trump's latest tariff threats with Scarlet Fu & Vonnie Quinn.
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