After six straight days of gains and record highs, U.S. equities finally took a breather. The S&P 500 slipped 0.3% yesterday, marking its first down day in over a week. Across the Atlantic, European markets closed in positive territory, lifted by strong earnings from EssilorLuxottica (+6.9%), Philips (+9%), and Barclays (+2.8%), which helped propel the banking sector. European banks, long overlooked by investors, are on a remarkable run: the Stoxx Europe 600 Banks index recently broke its 2007 record - an eye-catching milestone for those who remember the pre-crisis era.

Not everything was rosy in Europe, though. Novo Nordisk suffered another sharp drop, continuing a stunning reversal for the Danish pharma giant. Just a year ago, it was Europe’s largest company by market cap; now, its stock has lost nearly two-thirds of its value.

Back in the U.S., the spotlight remains firmly on earnings. Today and tomorrow are two of the busiest days of the season, with Meta and Microsoft reporting after the close tonight, followed by Apple and Amazon tomorrow. Together, these four companies represent a combined market cap of $11.3 trillion—an extraordinary figure that underscores their outsized influence on the S&P 500 and global markets. Any meaningful move in these stocks will ripple through the indexes. So far, volatility has been muted: since June 24, every S&P 500 session has seen less than a 1% move. That streak could end soon.

Why? Because the macro calendar is loaded. Today brings second-quarter GDP numbers for both the Eurozone and the U.S., plus the ADP private payroll report ahead of Friday’s official jobs data. And, as if that weren’t enough, the Federal Reserve wraps up its two-day meeting this afternoon. No policy change is expected, but Jerome Powell’s tone will matter. The big question: Will the Fed deliver a rate cut in September? Powell is unlikely to commit, sticking to his “data-dependent” message. Still, reports suggest growing tension inside the FOMC, with governors Christopher Waller and Michelle Bowman rumored to dissent—a rare move not seen in decades, according to the Wall Street Journal. For now, the CME FedWatch tool pegs the odds of a September cut at about 66%.

Trade tensions remain a subplot. The U.S. and China wrapped up talks in Stockholm, signaling the 90-day tariff truce agreed in May may be extended. Ultimately, the next move rests with Washington, where President Trump is expected to review recommendations from Treasury Secretary Scott Bessent this week. By Friday, the U.S. could announce updated tariff measures country by country.

Elsewhere, a tsunami warning was issued for parts of Japan, Hawaii, and California following a strong earthquake near Russia’s Kamchatka Peninsula.

In Asia, Japan’s market closed flat after three straight down sessions. Australia, Taiwan, and South Korea posted gains on hopes of U.S.-China trade progress, while Hong Kong lagged, with the Hang Seng down 0.4%. European futures are pointing higher, but the actual open will hinge on earnings from heavyweights like L’Oréal, Kering, Capgemini, UBS, and HSBC later today.

Today's economic highlights:

On the agenda today: quarterly GDP figures for several European countries, followed by ADP employment figures, annualized GDP, home resales, DOE crude oil inventories and the FOMC's interest rate decision in the US. See the full agenda here.

  • USD/GBP: 0.7516 GBP
  • Bund/OAT spread: 66 points (-0.5%)
  • VIX: 15.98 (+1%)
  • Gold: $3,315
  • Brent: $71.79
  • 10-year US: 4.326%
  • Bitcoin: $117,605

In corporate news:

  • GE Healthcare: In the second quarter, GE Healthcare’s net income rose nearly 15% to $500 million. Earnings per share were $1.06, compared to $0.94 a year earlier. Revenue increased 3.47% to $5.007 billion, with operating income up 7.57% to $654 million. The revenue growth was driven by strong activity in the United States, Europe, the Middle East, and Africa.
  • Humana: Humana reported mixed quarterly results. For the April–June period, adjusted earnings per share were $6.27, compared to forecasts of $5.87 and $6.96 in the prior year. Revenue reached $32.388 billion, above analysts’ expectations, representing 9.64% growth. The health insurer raised some of its annual financial targets, now expecting adjusted EPS of $17 for the year, up from its previous estimate of $16.25.
  • Kraft Heinz: In Q2 2025, Kraft Heinz’s net sales declined 1.9% year-over-year to $6.4 billion, including a 0.1 percentage point favorable currency effect. The food group reported an operating loss of $8 billion versus an operating profit of $522 million a year earlier. Net loss was $7.82 billion compared to a net profit of $100 million last year.
  • Starbucks: Starbucks rose more than 4% in pre-market trading despite mixed third-quarter results. EPS came in at $0.50 versus $0.93 a year earlier and $0.65 expected. Net income dropped 47.1% year-over-year to $558.3 million. Revenue grew 3.8% to $9.46 billion, but same-store sales in North America fell by 2%.
  • Tesla: Tesla reportedly signed a $4.3 billion deal with South Korea’s LG Energy Solution, according to Reuters, citing sources. The agreement covers the supply of energy storage systems for batteries. The news agency added that Tesla aims to reduce its reliance on Chinese products amid the ongoing trade war.
  • VF Corporation: VF Corporation surged about 15% in pre-market trading after beating first-quarter revenue estimates, thanks to a slight increase in demand for its clothing and footwear. The U.S. group, which owns Vans, Supreme, Timberland, and The North Face, reported revenue of $1.76 billion (flat versus an expected decline of 3–5%), and an adjusted loss per share of $0.24 compared to consensus expectations of -$0.34.
  • Visa: Visa posted stronger-than-expected results for the third quarter, ended in June. Net income rose 8% to $5.3 billion, or $2.69 per share. Adjusted EPS came in at $2.98, beating consensus by $0.14. Revenue increased 14% to $910.2 billion, topping Wall Street estimates of $9.84 billion.

Analyst Recommendations:

  • Caesars Entertainment: CBRE Research maintains its buy rating and lowers the price target from $50 to $45.
  • Carrier Global: Goldman Sachs maintains its buy rating and lowers the price target from $91 to $88.
  • Chart Industries: Lake Street Capital Markets downgrades from buy to hold and cuts the price target from $225 to $210.
  • Crane: CJS Securities maintains its outperform rating and raises the price target from $187 to $200.
  • First Citizens Bancshares: Autonomous Research maintains its neutral rating and increases the price target from $2,102 to $2,136.
  • Incyte: Deutsche Bank maintains its hold rating and raises the price target from $60 to $65.
  • Mondelez International: Deutsche Bank maintains its hold rating and raises the price target from $68 to $69.
  • Raymond James Financial: Autonomous Research maintains its neutral rating and raises the price target from $177 to $181.
  • Rivian Automotive: BNP Paribas Exane maintains its outperform rating and lowers the price target from $20 to $19.
  • Starbucks: Goldman Sachs maintains a neutral rating and raises the price target from $95 to $100.
  • Stifel Financial: Wolfe Research maintains its outperform rating and raises the price target from $108 to $132.
  • Sysco: Guggenheim maintains its buy rating and raises the price target from $82 to $85.
  • The Hershey Company: Stephens maintains its overweight rating and lowers the price target from $190 to $180.
  • United Rentals: BNP Paribas Exane maintains its underperform rating and raises the price target from $565 to $592.
  • Wayfair: Zelman & Associates maintains its outperform rating and raises the price target from $72 to $85.