MARKET WRAP

It was a mixed day for the major indices, with early morning volatility that tested dip buyers. So far, the tests of the past two days has mostly held, with the market managing to stabilize by the close. The Nasdaq took the brunt of selling in chip names, while small caps managed a little bounce from yesterday’s selling. On the day: SPX +0.1%, QQQ -0.5% and IWM +0.8%.

Elsewhere, the US10YY drifted a bit lower, now 4.35%, Gold continued higher, Oil was lower. The dollar’s brief bounce may officially be over with DXY down to $97.37. The VIX closed down slightly to 16.50, not really reflecting some sector divergence under the surface.

Notable Gainers: AMGN +3.3%, BIIB +4.2%, MRK +2.9%, JNJ +2.2%, HD 1.9%, +KHC +4.7%, PG +2.2%, SBUX +4.5%

Notable Losers: LMT -11%, GM -8.2%, NVDA -2.2%, KLAC -4.9%, APP -4.4%, SHOP -3.7%, PM -8.4%

After hours: TXN is down -7.5% following its earnings release, well beyond its expected move. ISRG is -2%, COF is +1.5%.

• MRKT Call: Dan and Guy with a deep dive on retail and a potential contrarian TGT trade. Plus, a look at the AI infrastructure news and a potential turning point in ORCL.

• RiskReversal Pod: Guy and Dan on calls for Jerome Powell’s resignation, the real deal behind the AI infrastructure story, surprising strength in financials, and the road ahead for American Express, Google, and GM.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 ekes out new high, Nasdaq retreats from records as chip stocks decline (CNBC)

• Top economist Mohamed El-Erian breaks ranks with Wall Street and says Powell should resign to preserve Fed independence (CNBC)

• Bessent says Powell doesn’t need to resign but should conduct internal review (CNBC)

• SoftBank and OpenAI’s $500 Billion AI Project Struggles to Get Off Ground (WSJ)

• OpenAI Greatly Expands Data Center Deal With Oracle (The Information)

• Wall Street Readies Fresh Push Against Tighter US Capital Rules (Bloomberg)

• GM Profit Falls as Trump Tariffs Add $1.1 Billion in Costs (Bloomberg)

• Clout wars: Jensen Huang eclipses Elon Musk and Tim Cook in Washington (CNBC)

• How China Curbed Its Oil Addiction – and Blunted a U.S. Pressure Point (WSJ)

WHAT’S NEXT?

As we noted in yesterday’s update, a retest of the 6300–6200 range in SPX would be key in determining whether the market is still in a consolidation phase or beginning to roll over. For now, buyers emerged below 6300, and that levels still appears to be acting as a bit of a pivot/magnet—similar to last week. The market had plenty of headlines to chew on today, though like yesterday, none seemed to directly drive the intraday swings. Today included reports of the China trade deal deadline being extended, some walk-backs on the size of a major AI infrastructure buildout, and continued threats around Fed Chair Powell’s future.

At a high level, the broader indices are still hovering near all-time highs, so certainly not much to get too bearish about. Under the surface however, single stock and sector volatility continues to elevate. Today saw chip stocks take a breather on the AI news, while healthcare and real estate caught a bid, suggesting some rotation perhaps, but nothing remotely approaching a trend, more like day to day stuff. That could continue as tomorrow sees earnings from Tesla and Alphabet, perhaps shaping sentiment into next week’s big batch of tech earnings. One other note, there’s a strong likelihood of trade headlines becoming a daily event considering the Philippines alone made headlines today. That leaves a lot of countries remaining.

For now, the path of least resistance remains index consolidation, but perhaps the underlying bid higher is a little less reliable across all sectors, with divergence levels increasing. Keep an eye on the expected moves in TSLA, GOOGL, IBM etc tomorrow vs how much the stocks actually move to get sense of sentiment vs reality on their reports. TXN is down more than the market was pricing after a massive move higher into earnings.

• Wednesday, July 23rd

  • Pre-market: T 4%

  • 10am - Existing Home Sales

  • After-hours: TSLA 6.7%, GOOGL 5.5%, IBM 6.1%, CMG 6.4%, NOW 7%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Options Trade Idea: Playing For A Bounce In Target ($TGT)

A look at some of the recent mania and whether some stocks are topping out, with particular focus on ORCL given the AI infrastructure news. Then a deep dive on retail and a look at TGT’s underperformance and potential contrarian play. A look at the FOMC drama including El Erian’s comments.  

• Analysis: SPX, ORCL, NFLX, TGT, WMT, KHL, GOOGL, GM

• Robinhood Live Trades - Bearish ORCL Spread, Bullish TGT Call

• Your Questions:

  • Nasty close in NVDA yesterday, is that a sign of the market topping out?

Learn more about our sponsor, Robinhood.

RiskReversal Podcast’s newest episode: Should Powell Stay or Should He Go?

Guy and Dan break down the latest in markets; from the S&P’s post-CPI grind and Fed speculation to dueling headlines on tech investments and earnings season trends. They tackle calls for Jerome Powell’s resignation, discuss the real story behind big tech and AI infrastructure deals, analyze surprising strength in financials, and debate the road ahead for American Express, Google, and GM amid evolving economic headwinds.

Learn more about our sponsor Robinhood.

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