Tech Earnings in the Driver's Seat - S&P 500 and Nasdaq Set Fresh Record Highs

July 25, 2025 – Alphabet’s better-than-expected profit and boosted AI spending outlook sparked a broad rally in the tech and AI sectors, lifting other giants like Nvidia, Microsoft, and Amazon. This momentum helped the S&P 500 and Nasdaq overcome weakness in various sectors, with both indices closing at all-time highs.  

Tesla shares fell nearly 9% following cautious forward guidance and warnings of ‘rough quarters’ ahead due to reduced EV incentives and softening European demand. This weighed on the consumer discretionary sector and the broader market, despite solid overall earnings.  

The Dow underperformed, shedding 0.7% as IBM plunged over 7% on disappointing software revenues, while UnitedHealth and Honeywell also declined after negative headlines and mixed results. 

Investors digested the European Central Bank’s interest rate decision and the latest signals from the European Union regarding trade talks with the US. The European Central Bank kept interest rates on hold, as figures showed the eurozone economy maintaining a steady pace of growth amid low inflation.  

U.S. economic data on Thursday were relatively upbeat, showing an acceleration in service sector activity and the lowest jobless claims figures in three months. The Commerce Department reported that new home sales in the U.S. rebounded less than expected in June.  

Recent tariff agreements with Japan and progress toward a 15% tariff deal with the EU eased trade war fears, providing a tailwind for equities and global risk appetite. Economic data, including upbeat jobless claims and business activity, also supported global sentiment.  

Donald Trump sparred with Federal Reserve Chair Jerome Powell on Thursday during a rare presidential visit to the central bank’s headquarters. Trump continued his campaign to pressure the Fed to cut interest rates, visiting its Washington headquarters to view the costly renovations.  

Oil prices rose on Friday, buoyed by optimism over a potential trade deal between the U.S. and the European Union, as well as reports of Russian plans to restrict gasoline exports to most countries.  

It was a disappointing session for bulls yesterday, as the index reversed its upward momentum, declining by 157 points or 0.93% to close at 25062. Immediately after opening, Nifty experienced selling pressure, dropping 201 points to reach 25,018 in the first half, with the latter half of the session primarily characterised by consolidation. Market breadth remained subdued, with declining shares surpassing advancers for the sixth consecutive trading day.  

Strong support for the Nifty is seen at 24,882. On the upside, markets will show momentum only after Nifty surpasses the 25255 resistance. Indian markets are expected to open with muted sentiment amid concerns over delays in finalising US trade agreements.  

Source: HDFC Securities – Prime Daily, July 25, 2025 

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