Stock Bull Run Powers Ahead as Apple Surges 5%: Markets Wrap

(Bloomberg) — Stock buyers waded back into the market, with a rally in most big techs driving gains. Short-dated Treasury yields fell on bets the Federal Reserve will soon be able to cut rates. The dollar slid.

The impetus to buy the dip has rarely been this strong, with the S&P 500 up almost 1% after a brief slide this week. The gauge has climbed an average 0.3% a day after a down session this year — on course for the second-best annual showing. The Nasdaq 100 rose 1.3%. Apple Inc. jumped 5.1%, with Donald Trump set to announce the firm will commit to a fresh $100 billion US investment as it seeks to avoid punishing tariffs on iPhones.

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“Markets are thriving in a risk-on fashion today as investors shift their focus from volatile trade developments and lackluster economic data to robust corporate earnings,” said Jose Torres at Interactive Brokers. “Apple’s announcement of a $100 billion domestic manufacturing investment is additionally propelling ‘animal spirits’.”

A soft $42 billion sale of 10-year Treasuries saw a muted response, with yields little changed at 4.22%. The yield on two-year notes fell three basis points to 3.70%.

Fed Bank of San Francisco President Mary Daly said policymakers will probably need to adjust rates in coming months to prevent further weakness in the labor market. Her Minneapolis counterpart Neel Kashkari said an economic slowdown may make a rate cut appropriate in the near term.

Meantime, Trump told European allies he’s planning to meet with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy as soon as next week in another bid to bring peace between the two countries. The US imposed an additional 25% tariff on Indian goods over its ongoing purchases of Russian energy.

Sandy Villere, portfolio manager at Villere & Co. said market participants seem to be focused on companies and earnings, and drowning out the noise coming out of Washington.

“There are a lot of narratives to keep track of in today’s investing environment, but earnings remain the main catalyst for stocks,” said Bret Kenwell at eToro. “While pullbacks are possible — particularly due to macro-related influences and poor seasonality trends — those pullbacks will likely prove to be buying opportunities.”

Stocks remain buoyant as betting against the market momentum “feels almost irrational,” according to a macro trader at Goldman Sachs Group Inc.

“The key point is that the market can’t look far enough. This is why it will ignore the recession risk,” Paolo Schiavone wrote.

Still, after the blistering rally in American equities, the Bloomberg Intelligence Market Pulse Index pushed to a “manic” reading last month, a sign that investor exuberance may be running too hot.

The measure combines six metrics like market breadth, volatility and leverage to deliver a reading on investor sentiment. When it gets into overheated territory, returns tend to weaken in the following three months.

“While trade uncertainty and elevated valuations could be a modest headwind for equities in the near term, investors can consider ways to manage volatility while positioning for longer-term gains,” said Mark Haefele at UBS Global Wealth Management.

Those who are already allocated to equities in line with their strategic benchmarks should consider implementing short-term hedges, and those under allocated should prepare to add exposure on potential market dips, he noted.

Corporate Highlights:

DoorDash Inc., the largest food delivery service in the US, issued an outlook for orders in the third quarter that surpassed Wall Street’s expectations. Airbnb Inc. issued a better-than-expected outlook for the third quarter as it saw encouraging summer travel demand, but warned that growth rates may not keep up later this year due to tough year-ago comparisons. Advanced Micro Devices Inc. Chief Executive Officer Lisa Su said the chipmaker has seen positive signs in demand for all its products and is making progress on getting US government approval to return to the China market. Super Micro Computer Inc. slumped after lowering its fiscal-year revenue forecast, raising questions about sales and pricing pressures around powerful AI servers. McDonald’s Corp. sales picked up in the latest quarter, suggesting that pop culture-focused collaborations and budget meals are helping to offset diners’ economic anxiety. Walt Disney Co. disappointed Wall Street with a tepid full-year profit forecast, weighed down by its struggling movie and TV businesses. General Motors Co. has signed a deal with Texas-based Noveon Magnetics Inc. to secure rare-earth magnets for its full-size pickup trucks and SUVs, marking the third domestic supply contract the automaker has signed related to the critical trade dominated by China. Rivian Automotive Inc., an electric-vehicle maker, backed away from a key financial goal and warned of mounting losses, highlighting the pressure it’s facing from President Donald Trump’s tariffs and changes to US environmental rules. Uber Technologies Inc.’s rideshare division missed Wall Street estimates, disappointing investors who were looking for signs of more robust demand in its signature business. Cathay Pacific Airways Ltd. is doubling down on its long-haul expansion with the first purchase of Boeing Co. widebody aircraft in a dozen years, while it struggles closer to home with its HK Express unit suffering from a sharp drop in regional demand. Snap Inc., the owner of the Snapchat photo-sharing app, acknowledged a slowdown in advertising revenue growth, due in part to a technical issue with its ad-buying tools earlier this year. Novo Nordisk A/S’s sales showed the weakest growth in four years as the Danish drugmaker loses ground to Eli Lilly & Co. in the crucial US market for obesity medicines, underscoring the slowdown that prompted last week’s profit warning. Six Flags Entertainment Corp. tumbled after poor weather conditions limited attendance, leading the theme-park operator to slash its full year outlook. Mosaic Co., the world’s leading producer of two key crop fertilizers, sank as US tariffs led to fewer and costlier second-quarter phosphate sales. Some of the main moves in markets:

Stocks

The S&P 500 rose 0.7% as of 4 p.m. New York time The Nasdaq 100 rose 1.3% The Dow Jones Industrial Average rose 0.2% The MSCI World Index rose 0.8% Bloomberg Magnificent 7 Total Return Index rose 1.9% Philadelphia Stock Exchange Semiconductor Index fell 0.2% The Russell 2000 Index fell 0.2% Apple rose 5.1% Currencies

The Bloomberg Dollar Spot Index fell 0.4% The euro rose 0.7% to $1.1657 The British pound rose 0.4% to $1.3358 The Japanese yen rose 0.3% to 147.18 per dollar Cryptocurrencies

Bitcoin rose 1.4% to $115,291.2 Ether rose 3% to $3,684.07 Bonds

The yield on 10-year Treasuries was little changed at 4.22% Germany’s 10-year yield advanced three basis points to 2.65% Britain’s 10-year yield advanced one basis point to 4.53% The yield on 2-year Treasuries declined three basis points to 3.70% The yield on 30-year Treasuries advanced three basis points to 4.81% Commodities

West Texas Intermediate crude fell 1.7% to $64.07 a barrel Spot gold fell 0.3% to $3,371.57 an ounce –With assistance from Lu Wang.

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