Good morning investors! Stocks had a great day yesterday as Microsoft lifted the market.
Today we cover:
Inflation eases in June
Apple and Amazon beat
More earnings
📊 Economy and News
US Inflation Eases in June, but Oil Spike May Reverse Trend
U.S. inflation slowed in June, but the relief is expected to be short-lived as renewed Middle East tensions push oil prices higher.
The Personal Consumption Expenditures (PCE) Price Index rose 3.7% year-over-year in June, down from an unrevised 4.1% in May. On a monthly basis, the index fell 0.1% — the weakest reading since April 2020 — after a 0.5% gain in May.
Core PCE (excluding food and energy) increased 3.3% year-over-year and 0.1% month-over-month.
The cooling was driven by a temporary drop in oil prices during a fragile U.S.-Iran ceasefire that has since collapsed. On the other hand, US gross domestic product, which captures all the goods and services produced in the economy, expanded at an annualized rate of 1.5% from April through June.
That was well below the 2.1% rate in the prior quarter and lower than the 2.1% economists predicted. Imports hold back US economic growth in Q2, but domestic demand robust.
The Federal Reserve, which targets 2% PCE inflation, held its key rate in the 3.50%–3.75% range on Wednesday. Three policymakers dissented in favor of a hike. Chair Kevin Warsh stressed the Fed would not “waver” in its fight against inflation, saying there is “no soft inflation target.”
Economists expect a rate increase as soon as September. Meanwhile, consumer spending rose 0.3% in June (0.4% after inflation), personal income increased 0.2%, and the saving rate slipped to 2.7% — its lowest level since mid-2022.
Global hits:
Mexico’s economy grows 1.5% in second quarter.
Saudi Arabia reports $9.14 billion budget deficit in Q2 2026.
Portugal approves 33% windfall tax on oil company profits.
Europe news: Euro zone economy grows faster than expected on AI spending, confident consumers as German inflation accelerates to 2.8% in July and une ployment continues to be a trouble with Italy’s unemployment rate rising to 5.7% in June.
Reminder: US mortgage rates climb to 6.66%, highest in a year. Also, European soccer governing body UEFA threatened to boycott FIFA competitions, including the World Cup, if FIFA moves forward with plans to sell a stake in its commercial business to private investors.
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📈 Stocks
S&P 500 7 437,63 (+1.66%)
DJIA 52 208,06(+1.19%)
NASDAQ 25 122,18 (+2.78%)
BRENT CRUDE 89.14 (-1.71%)
* Prices as of Jul 31st, 12:20 AM UTC
Apple, Amazon, and More Report
Apple reported stronger-than-expected earnings and revenue for the fiscal third quarter, driven by a 22% increase in iPhone sales. The stock slipped in extended trading as services revenue missed estimates.
Here’s how the company did versus LSEG consensus estimates:
EPS: $2.02, which isn’t comparable to analyst estimates of $1.89.
Revenue: $109.42 billion, versus $108.65 billion estimated.
Here’s how Apple did in other key areas:
iPhone revenue: $54.25 billion vs. $53.86 billion estimated.
Mac revenue: $10.35 billion vs. $8.74 billion estimated.
iPad revenue: $6.19 billion vs. $6.92 billion estimated.
Wearables revenue: $7.88 billion vs. $7.82 billion estimated.
Services revenue: $30.74 billion vs. $31.22 billion estimated.
Gross margin: 50.1%. That’s not comparable to analyst estimates of 47.9% due to tariff rebates.
Cash: $146.52 billion
Apple didn’t provide official guidance and the stock fell after the bell.
Other Big Earnings:
Amazon reported better-than-expected revenue and cloud growth for the second quarter. quarter, surpassing Wall Street’s expectations for 31% growth. That marked the unit’s fastest growth since 2021. For the current quarter, Amazon guided for revenue between $197 billion and $202 billion. Analysts polled by LSEG were expecting $204.1 billion. Also, the company expects capital spending to reach $220 billion this year.
Reddit reported second-quarter earnings that beat on the top and the bottom lines, and the company issued guidance that sailed past expectations. But the company’s shares sank after it revealed in an investor letter that “Search referrals were choppy,” underscoring investor concerns about Reddit’s reliance on Google to land new users. Reddit’s revenue rose more than 60% for an eighth straight quarter as the company’s ad business continues to benefit from overseas expansion, a rush of new users and continued improvements to its online ad engine. Reddit shares sank around 7% in after-hours trading.
Coinbase shares dropped in extended trading after the crypto platform posted a wider-than-expected loss for the second quarter, underscoring the continued troubles resulting from a deepening crypto winter despite its efforts to diversify revenue. Coinbase’s Thursday report marked its third straight quarter missing Wall Street’s forecasts for revenue and earnings. The company reported a loss of $359.5 million, or $1.36 per share, for the quarter ended June 30, compared with a profit of $1.43 billion, or $5.14 per share, a year earlier. Coinbase net income is often distorted by accounting rules that require it to value its large crypto holdings based on whatever the price is at the end of the quarter, causing reported earnings to swing widely even when no assets are sold.
Rivian Automotive reduced its 2026 spending plans and slightly narrowed its previously forecasted losses this year as the company reported second-quarter results Thursday. The revised guidance now includes adjusted losses between $1.8 billion and $2 billion, down from $1.8 billion to $2.1 billion, and capital expenditures of $1.7 billion to $1.8 billion, down from $1.95 billion and $2.05 billion. It reconfirmed a previously raised delivery target of 65,000 to 70,000 vehicles to customers. Rivian said the $250 million reduction in capital spending at the mid-point was enabled by “project efficiencies and timing of spend,” which the automaker previously increased to allow for added investments in new technologies such as its hands-free driving system.
Interesting: One in three Canadian workers used generative AI tools at work.
OpenAI announced it is slashing the price of two of its latest artificial intelligence models, GPT-5.6 Terra and GPT-5.6 Luna.
Nexus Data Centers in advanced talks to secure $15B for Google-backed Anthropic data center.
Surprising: Jersey Mike’s stock falls 6% in public market debut after pricing shares at $23. Elsewhere, 30-year yield hovers near 2007 high as traders weigh Fed decision to holds rates steady.
💵 Personal Finance
Fed Holds Rates Steady: What It Means for Your Wallet
The Federal Reserve left interest rates unchanged at its July meeting, keeping the benchmark in the 3.50%–3.75% range. The decision has direct effects on household borrowing and savings costs amid elevated energy prices from the Iran conflict, which could push policymakers toward a rate hike as soon as September.
Most credit cards carry variable rates closely tied to the Fed’s benchmark. With rates on hold, the average new card offer remains near 24%. Auto loan rates are also elevated: about 7% for a six-year new-car loan and 10.5% for used vehicles. Sustained high rates limit zero-percent financing deals and are pricing many middle- and lower-income buyers out of the new-car market.
Fixed-rate federal student loans shield existing borrowers, though rates for new loans are set to rise based on recent Treasury yields. Mortgage rates, which track longer-term Treasuries more than the Fed funds rate, have climbed near a one-year high, with the average 30-year fixed rate at 6.76%.
On the savings side, high-yield online accounts still offer around 4%, remaining attractive by historical standards even if below recent peaks.
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