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

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

This Week in US Markets: The Three Major Indexes Hit Record Highs, Then Stumbled

U.S. markets started off strong this week, with the S&P 500 hitting a new record high. The Dow Jones Industrial Average also notched three consecutive record closes ending Wednesday as the possibility of a September rate cut pushed to near certainty, according to CME’s FedWatch Tool. However, that momentum faded later in the week as all three major indexes fell from their highs, and the S&P 500 posted its worst week since April. 

In economic news, Federal Reserve Chairman Jerome Powell spoke at the Economic Club of Washington where he said the central bank will not be waiting for inflation to fully reach its 2% target to start cutting rates. Elsewhere, retail sales for June were unchanged, outpacing estimates for a pullback after an upwardly revised 0.3% gain in May. Unemployment claims last week also rose to their highest level in nearly a year. 

In housing news, the NAHB Housing Market Index gauging homebuilder sentiment declined to its lowest level of the year in July, though the decline was largely based on expectations interest rates would remain higher for longer. Housing starts for June increased more than expected at 3%, while building permits also topped expectations, increasing 3.4% in June. Finally, the 30-year mortgage rate last week fell to 6.87%, its biggest decline in roughly four months.

In company news, it was a grim week for tech. The prospect of rate cuts just around the corner sparked a rotation away from Big Tech names and into small caps. Household names like Apple, Microsoft, Alphabet, and Amazon all saw sharp declines for the week. Meta was also in that camp, but it slightly reversed that trend later in the week after the Wall Street Journal reported it is in talks to buy a 5% stake in the Ray-Ban parent company Essilor Luxottica. Netflix also had some positive news, growing its subscribers by 16.5% in the second quarter. However, it also warned its third-quarter subscriber gains would fall year-over-year. Closing out the week, shares of the cybersecurity company CrowdStrike fell sharply after a defective update led to major IT outages worldwide.

Chipmakers also experienced a volatile week following a report from Bloomberg that the White House is considering new restrictions on exports to China. This development overshadowed semiconductor equipment maker ASML's positive earnings results, pushing its shares and those of NVIDIA and AMD sharply lower. Comments from former President Trump suggesting that Taiwan should contribute to its U.S. defense costs sent Taiwan Semiconductor’s stock lower as well.

In the financial sector, second-quarter earnings kicked off in full swing. Goldman Sachs beat earnings and sales estimates, largely driven by record assets and management fee revenue. JPMorgan and Wells Fargo, both of which reported earnings last Friday, also saw notable gains, while Bank of America’s reporting this week added to that momentum, beating top- and bottom-line estimates and projecting higher net interest income. Additionally, shares of Warren Buffet’s Berkshire Hathaway reached a record high. Finally, Discover Financial Services caught a boost after reporting better-than-expected second-quarter results. 

In healthcare, UnitedHealth, the largest weighted stock in the Dow Jones, saw a significant increase after reporting earnings and sales above expectations, alleviating concerns about the impact of its February cyberattack. Johnson & Johnson also posted positive results, surpassing earnings and sales estimates and raising its full-year sales outlook, driven by strong performance in its medicines business. Meanwhile, shares of Zepbound-maker Eli Lilly fell sharply following promising data from Swiss drugmaker Roche's early-stage weight-loss drug.

In the airline industry, United Airlines posted mixed earnings results, boasting a 20% annual increase in profits while forecasting a weaker-than-expected third quarter. Alaska Airlines also reported mixed results and a cautious outlook for the current quarter. 

Looking at other company news, shares of Trump Media soared early in the week after the assassination attempt on former President Donald Trump. Macy’s stock tumbled after announcing it ended buyout discussions with activist investors Arkhouse and Brigade, which were looking to take the retailer private for roughly $6.9 billion. Domino’s Pizza stock dropped double digits after falling short of second-quarter estimates for revenue and same-store sales. Finally, the California New Car Dealers Association reported a 24% decline in Tesla’s California registrations in the second quarter.