✅ Written by Austin DeNoce, Markets Reporter, Walk-On Holdings

✅ Edited by Casimir Stone, Creative Director Walk-On Holdings

This Week in US Markets: Market Volatility Amid Earnings and Inflation Data

This week in U.S. markets was volatile, with a slew of second-quarter earnings and economic reports to digest. On Thursday, the S&P 500 and Nasdaq Composite registered their worst days since 2022. However, fresh inflation data reported at the end of the week helped the Nasdaq Composite and S&P recover some of those losses. On Friday, the S&P 500 and Nasdaq Composite rose by more than 1%, and the Dow surged nearly 2%. 

The June PCE index rose 0.1% monthly and 2.5% annually, slightly down from the previous month. Core inflation, excluding food and energy, met expectations, increasing 0.2% monthly and 2.6% annually. The same report also showed personal income grew by 0.2%, below the 0.4% estimate, while spending rose in line with forecasts at 0.3%. Overall, the report was good news for the state of inflation, building more confidence around the Fed’s upcoming rate cut.

In other economic news, initial estimates showed the U.S. GDP grew 2.8% in the second quarter, well above expectations. First-time unemployment claims fell slightly last week, but remained above this year’s average, suggesting the labor market is continuing to gradually soften. The Chicago Fed National Activity Index showed economic activity slowing in June, though it remained slightly above average.

In housing news, the median sales price of existing homes rose to a new record high in June, while sales slumped by 5.4%, the fourth-straight decline and the steepest since 2022. New home sales fell more than expected in June to their lowest level in seven months, although the median sales price registered a slight annual decline. The 30-year mortgage rate also slid to 6.82% last week, a five-month low. 

In the tech sector, shares of Nvidia rose after Reuters reported the company is preparing a new version of its Blackwell chips that are compatible with current export controls. The Wall Street Journal reported that Amazon has lost billions on its Echo, Kindle, and Fire TV products but could roll out a paid subscription plan for an AI-powered Alexa as soon as this month. Alphabet reported a slight earnings beat but also showed underwhelming YouTube advertising revenue, sending its stock lower. The tech titan came under more pressure following news that ChatGPT-owner OpenAI will launch its own search engine called SearchGPT.

Elsewhere in tech, cybersecurity company CrowdStrike continued its fall, tumbling further in the wake of its worldwide IT outage last Friday. Spotify’s stock surged after reporting record profit and an annual increase in paid subscribers. IBM saw gains after reporting better-than-expected earnings thanks to strong demand for its generative AI tools. Finally, shares of 3M skyrocketed after reporting a sizable earnings and revenue beat. 

In the airline industry, Delta Air Lines canceled more than 4,600 flights over the weekend because of the CrowdStrike outage. Southwest gained after beating expectations and announcing major changes to its business model, including scrapping open seating, which was one of the airline’s defining features for more than 50 years. American Airlines shares also pushed higher on an earnings beat. The aerospace industry also had news, with shares of GE Aerospace and Lockheed Martin rising after both companies beat expectations and raised their outlooks.

In the auto sector, Tesla shares slumped after missing revenue estimates and reporting a decline in EV sales for the second consecutive quarter. General Motors also saw its shares drop despite beating earnings expectations after delaying plans to build a new EV model and open an electric truck factory. Meanwhile, Ford’s stock suffered its worst day since 2008 after a dramatic earnings miss, although CEO Jim Farley maintained the automaker’s restructuring plan is on track.

In other company news, Verizon stock slid after missing revenue estimates, largely due to slow phone upgrades. However, AT&T surpassed paid subscriber growth estimates on strong demand for its unlimited plans, which carried Verizon higher as well. Shares of Disney declined after thousands of Disney workers at its Disneyland theme parks and resorts in Southern California alleging unfair labor conditions voted to authorize a strike. Finally, UPS reported disappointing earnings and lowered its full-year revenue guidance, delivering its worst day on record.