Financial News - Daily Brief

Markets fell broadly on Tuesday, with 10 of 11 S&P sectors closing lower. Losses were widespread, with Materials, Health Care, and Financials posting the steepest declines. Technology was the lone gainer, driven by strength in select hardware names. All eyes are now on Q2 earnings season, which kicks into gear this week with big banks and tech names reporting.

Autos
Geely is buying the remainder of EV-maker Zeekr it doesn’t already own in a $2.4B deal, increasing its stake from 62.8% to full ownership. BYD launched a smartphone integration feature compatible with major Chinese brands. Renault cut its 2025 margin outlook due to weaker-than-expected June sales. Tesla began taking orders for the Model Y in India, but steep tariffs push prices far above U.S. levels. Separately, the stock dipped on news that Tesla’s top North America sales exec has departed after 15 years.

Retail, Consumers & Restaurants
La-Z-Boy will acquire Southeast-region stores from Atlanta Furniture Galleries, though it revised its Q1 outlook to the low end of guidance. DraftKings and Penn shares slumped following signs the Trump administration may ease restrictions on crypto betting platforms. Red Robin unveiled a long-term strategy but warned Q2 comp sales will fall ~4%, though EBITDA is tracking ahead of prior forecasts. Grocery chain Albertsons raised its full-year same-store sales outlook. Meanwhile, DoorDash was downgraded on valuation concerns, and Uber and Baidu announced a partnership to accelerate AV deployments in Asia and the Middle East.

Energy, Utilities & Solar
ConocoPhillips is expanding Arctic drilling via the Willow project, expected to produce 600M barrels over 30 years. California Resources was upgraded by JPM on sum-of-the-parts value. National Fuel Gas was double-upgraded as well, with Bank of America citing stronger productivity. Advanced nuclear player Oklo was initiated with an Overweight rating, and refiners saw mixed revisions—Dino was double-upgraded, while Marathon and CVR were both downgraded on valuation. In solar, JPM downgraded both Enphase and SolarEdge as the market shifts toward third-party-owned (TPO) systems; Sunrun remains their top pick in residential.

Financials
Big banks kicked off Q2 earnings with JPM, Citi, and Wells Fargo all beating EPS estimates but noting caution ahead. JPMorgan’s CEO Dimon flagged risks from high deficits and frothy asset prices. Citi saw strength in investment banking and credit cards, while WFC trimmed its interest income outlook. Among trust banks, BNY Mellon beat on EPS and revenue, while State Street missed and noted higher expenses. Outside large caps, BlackRock reported record AUM at $12.5T, though inflows slowed. Crypto-linked assets fell on a failed House vote related to digital asset regulation. In credit cards, delinquency and charge-off rates are ticking higher across issuers.

Healthcare & Biotech
In pharma, Iovance was downgraded to Sell on a slow launch of its melanoma drug. SLS met endpoints in its AML trial and will now move to a first-line study. In medical devices, Steris and Solventum were upgraded, while RxSight was downgraded after weak sales trends. CMS proposed a major change that would reclassify skin substitute products, potentially slashing Medicare reimbursement by 90%—a major blow to companies like Organogenesis and MiMedx. Oscar Health was downgraded on fears of steep Exchange enrollment losses in 2026.

Industrials, Materials & Transports
Southwest Airlines was downgraded on valuation, while Otis was upgraded for its relatively stable outlook. Carrier saw a downgrade on concerns over inflation and rising inventory levels. In materials, Morgan Stanley downgraded several copper names, including Freeport and Teck, citing stretched valuations and macro risk. MP Materials surged after announcing a rare earth recycling facility in partnership with Apple. In aerospace, the U.S. launched a probe into drone and polysilicon imports, while Joby expanded its testing and Palantir hit a new 52-week high.

Tech, Internet, Chips & AI Infrastructure
Nvidia popped after getting a quiet green light to resume chip sales to China, easing fears over export controls. AI infrastructure investment dominated headlines: Blackstone, Google, and Oracle collectively announced more than $55B in new projects across Pennsylvania and Europe. Google also signed a landmark $3B hydroelectric power deal with Brookfield. In the telecom space, Ericsson missed revenue estimates and gave a soft Q3 forecast. Roblox added licensing features, opening the door to IP integrations with brands like Netflix. Trade Desk rallied after news it will join the S&P 500.

YTD Sector Leadership Check

Year-to-date leadership remains with cyclical and growth sectors, led by Industrials (XLI) at +13.76%, reflecting strength in transportation, aerospace, and capital equipment. Technology (XLK) holds second place at +10.90%, as AI and storage infrastructure continue driving enthusiasm. Communication Services (XLC) rounds out the top three at +9.49%, supported by gains in ad-driven tech giants.

On the weaker end, Health Care (XLV) remains the worst performer at -3.62%, followed by Consumer Discretionary (XLY) at -2.37%, both dragged by valuation resets and uneven demand trends. Energy, Staples, and Real Estate have eked out slight gains, while Utilities and Financials remain steady with mid-single-digit advances.

The strength in industrials suggests investor confidence in domestic economic resilience, while tech's continued leadership underscores the enduring AI-driven growth narrative heading into the second half of the year.

MP Materials, Apple Strike $500M Rare Earth Deal
MP Materials will partner with Apple on a $500 million initiative to develop a U.S.-based facility that produces recycled rare earth magnets. This marks Apple’s latest push to onshore critical materials used in its devices and reduce dependence on Chinese supply chains. MP’s new plant will process recycled material into neodymium-based magnets, a key component in iPhones and other Apple products. The move is expected to bolster domestic rare earth production at a time when geopolitical tensions continue to disrupt global supply chains. Shares of MP Materials rose on the news, while peers in the rare earths sector also gained.

MicroStrategy Slides as Lone Bear Renews Warning
Shares of MicroStrategy declined after a high-profile Wall Street analyst reiterated a bearish outlook on the stock. The analyst highlighted concerns over the company's heavy leverage and dependence on Bitcoin’s price for valuation support, arguing the risk/reward is skewed to the downside. Despite MicroStrategy’s recent outperformance on Bitcoin’s strength, skepticism remains over its long-term viability as a tech company versus a crypto proxy. The company now owns over 226,000 Bitcoin, and its equity value remains tightly correlated to crypto market sentiment. Investors appear increasingly divided between fundamental concerns and bullish crypto enthusiasm.

Nvidia Jumps as China Chip Exports Get Quiet Green Light
Nvidia shares jumped after news emerged that it may resume shipments of its H20 AI chips to China. The company reportedly received informal assurances from U.S. regulators that such exports would be allowed under the current trade regime. The move not only opens the door to billions in previously restricted sales but also bolsters the case for Nvidia's long-term valuation trajectory—potentially paving the way to a $5 trillion market cap. Investors welcomed the development as a de-escalation in the tech export crackdown and a reaffirmation of Nvidia’s dominance in global AI infrastructure.

Target Falls on Weak Sales and CEO Exit
Target’s stock slid following news that longtime CEO Brian Cornell will not renew his contract, adding an element of uncertainty just as the company struggles with softening sales. Quarterly results missed expectations, and management acknowledged pressure from shifting consumer behavior and inflation-sensitive shoppers. With the leadership transition now underway, analysts are watching closely to see whether Target will revisit its pricing and merchandising strategy. Some investors worry that a change at the top could complicate execution on key turnaround initiatives.

China’s Economic Woes Hit Commodities, Construction
China’s ongoing economic malaise continues to weigh on commodity demand and construction activity, with ripple effects across global markets. Steel output has slowed, and domestic housing investment remains weak, undermining confidence in a near-term rebound. Policymakers are increasingly constrained in their stimulus efforts due to structural debt concerns and geopolitical pressure. This is raising questions about the sustainability of global demand for raw materials and construction-linked exports. Analysts warn the country’s property sector is unlikely to recover without broader reforms, even as local governments increase issuance to support infrastructure.

Q2 2025 Earnings Call Summary

Takeaway for Investors

JPM continues to execute through the cycle. The bank’s diversified model helped it weather soft trading results and gain from loan growth and fee income. Investors remain focused on credit quality, but JPM’s scale and risk discipline keep it well positioned for H2 2025.