July 31st Market Overview

Happy Friday

Alright we finished the week higher while the indices finished July lower. Amazon carried the tape today almost in the same fashion as Microsoft yesterday all while Apple went the other way Treasury yields climbed through all of it.

A theme I’m going over in depth tomorrow with the Saturday premium group. Chip names got slaughtered this month and we are going to dig into it.

Let’s dig in...

Today's Big Picture

July Looked Calm And Wasn't

The Dow ends the month about where it started while semiconductors are tracking their worst month since 2008. The Nasdaq-100 had its steepest monthly drop since March 2025. Index levels hid a violent rotation out of the chipmakers and into the companies buying the chips. I think that rotation is the July story, not the headline number.

The Bond Market Pulled The Hike Forward

Wednesday's selling hit long bonds while short yields fell, which is a bet the Fed waits too long and pays for it later. Today yields rose across every maturity after two dissenting officials explained why they wanted a hike this week. Futures now lean toward an increase by September. Stocks closed higher anyway, so equity investors are not taking that seriously yet.

Two Days, Three Records

Apple gave up around $470 billion in market value, the second largest one-day loss any US company has ever taken and its worst session since 2020. Amazon put up its biggest one-day market value gain ever in the same session. Microsoft's $450 billion yesterday was the largest one-day gain by any US company on record.

Market Overview

Index Performance

Stock Spotlight

Reddit $RDDT ( ▼ 21.16% )  
beat on both revenue and earnings and lost more than a fifth of its value anyway. CEO Steve Huffman said search referrals were choppy and visibility stays low, so the plan now is getting people to come direct to the app.

Coinbase $COIN ( ▼ 10.0% )  
posted a $359 million loss, its third losing quarter in a row. Revenue fell from a year ago as crypto stayed under pressure, with bitcoin near $63,000 today.

Universal Music Group $UMGP ( ▲ 1.46% )  
had flat earnings and subscription growth below what analysts wanted, and Amsterdam halted the stock. Worth remembering they turned down a $65 billion bid from Bill Ackman's Pershing Square in May.

Big Name Updates

Microsoft $MSFT ( ▲ 2.54% )  
is closing out its best month since October 2007. As of Wednesday it was barely up for July. Two days of post-earnings buying did the rest.

SpaceX $SPCX ( ▼ 3.59% )  
has lost more than a third of its value in a month, down from a June high of $225.64 to $113.50 on Monday. That is over $1.2 trillion of market value gone. Tesla $TSLA executives have meanwhile been told to prepare for a separation of the China business ahead of a possible merger with it.

Chevron $CVX ( ▲ 2.45% )  
earned $12 billion in the quarter against $2.5 billion a year ago, or $6.06 per share versus $5.57 expected. CEO Mike Wirth also said the Black Sea terminal shut by drone strikes is loading tankers again, which feeds a chunk of daily global supply.

Exxon Mobil $XOM ( ▼ 0.84% )  
came in at $3.52 against $3.63 expected. Scheduled maintenance ate the quarter while its smaller rival printed money.

Other Notable Company News

Corteva $CTVA ( ▼ 11.6% )  
fell hard after it and Bunge $BG warned that fuel and fertilizer costs from the Iran war will flatten Brazil's second corn crop, which is about four fifths of the country's corn.

Moderna $MRNA ( ▼ 3.44% )  
missed on earnings, beat on revenue, and cut its research budget for the year to $2.9 billion.

BP $BP ( ▲ 2.04% )  
is putting its North Sea business up for sale, about 1,100 employees across two production hubs and three sites west of Shetland.

HSBC $HSBC ( ▼ 0.59% )  
C sold a A$36 billion Australian home and personal loan book to Blackstone $BX, which calls it the largest home loan portfolio deal ever done.

Ares Management $ARES ( ▲ 2.23% )  
raised a record $36.4 billion in the second quarter, mostly from pensions and sovereign funds, while Blue Owl's retail-heavy fundraising fell.

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Sector Watch

Bond Market

The 30-year sits near 5.26, the highest since 2007, and the 10-year is at its best level since January 2025. The more useful tell today was in corporate credit. The extra yield investors demand to hold Amazon's 2056 bonds over Treasurys narrowed after earnings, and debt from Meta, Alphabet and Oracle followed it higher.

Policy Watch

Fed

• The Fed held rates on Wednesday in a 9 to 3 vote. Beth Hammack, Neel Kashkari and Lorie Logan all wanted a hike.

• Chairman Kevin Warsh said the Fed has "no magic wand" for inflation. The bond market took that badly.

• Wages and benefits rose a little faster than expected in the second quarter, up 3.4 over the past year. That still trails consumer prices, so workers keep losing ground.

• Consumer sentiment came in at its best reading since February, and expectations for inflation a year out fell to 4.2 from 4.6 in June.

Fiscal & Trade

Oil moved higher again as Hormuz traffic faltered, with Brent near $88 and West Texas near $85. Senate Democrats asked five federal agencies to preserve records on critical mineral deals involving companies tied to the Trump and Lutnick families, after a New York Times investigation counted at least 14 of them in line for more than $8.9 billion in federal money. The SEC chair also defended a proposal to let public companies report earnings twice a year instead of four times.

International

• The Bank of Japan left rates alone in an 8 to 1 vote and warned core inflation will run clearly above its two percent target in the second half of its fiscal year.

• Tokyo intervened again to support the yen, and the US Treasury told banks it might trade currencies today to help. The dollar had its worst week against the yen since July 2024.

• China's factory activity contracted in July for the first time since February as the export rush faded.

• Iran said it attacked US assets and bases in Kuwait and Bahrain after the latest American strikes.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

Hormuz Flows

Commonwealth Bank of Australia puts traffic at roughly a third of prewar levels. They figure it takes half or better before the oil market tips back into oversupply. That number tells you more than the strike headlines do.

Korean Chips On Monday

The Kospi still finished the week lower despite its record session. JPMorgan says retail traders there have fully unwound their borrowed positions and hedge funds are most of the way there. If Monday holds, the deleveraging is finished.

- John

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