Earnings Reports Boost Stocks, With Apple Leading the Way

Wall Street staged a modest rebound as investors digested a new wave of corporate earnings. U.S. Treasury yields saw little movement ahead of a $42 billion auction of 10-year notes, while the dollar weakened against major currencies.

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The S&P 500 ticked higher following a recent pullback driven by economic concerns. Apple Inc. rose 1.5% on reports that President Donald Trump plans to announce a fresh $100 billion investment from the tech giant aimed at boosting U.S. manufacturing. McDonald’s Corp. also advanced after reporting stronger quarterly sales, and Uber Technologies Inc. revealed plans for $20 billion in new share repurchases.

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Corporate earnings continue to deliver far better-than-expected results. According to Bloomberg Intelligence, S&P 500 companies have reported profits beating second-quarter estimates by 9.1%—three times higher than initial forecasts and the strongest outperformance since 2021.

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“Investors are juggling multiple storylines in today’s market, but earnings remain the primary driver of stock performance,” said Bret Kenwell, analyst at eToro. “While short-term pullbacks are possible due to macroeconomic pressures and seasonal weakness, they’ll likely present buying opportunities for long-term investors.”

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Market sentiment remains upbeat, with many traders reluctant to bet against the current rally. A Goldman Sachs macro trader described fading this momentum as “almost irrational,” noting that equities appear to be looking beyond near-term recession risks.

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Paolo Schiavone added that while uncertainties around global trade and high valuations could pose mild headwinds in the short run, long-term investors should focus on strategies to manage volatility without abandoning growth opportunities.

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UBS Global Wealth Management’s Chief Investment Officer, Mark Haefele, echoed similar advice. He suggested that investors who are already fully allocated to stocks should consider short-term hedging strategies to cushion against market swings. Meanwhile, those underexposed to equities may want to prepare to increase holdings during market dips.

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Despite the strong upward momentum, signs of overheating have emerged. The Bloomberg Intelligence Market Pulse Index—a sentiment gauge that blends six indicators, including market breadth, volatility, and leverage—recently hit a “manic” reading. Historically, when investor exuberance reaches this level, equity returns tend to soften over the following quarter.

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On the bond market front, traders are increasingly positioning for the Federal Reserve to cut interest rates later this year. With economic data signaling a potential slowdown, market participants believe the central bank could be pressured to lower borrowing costs—a move supported by President Trump.

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Options tied to the Secured Overnight Financing Rate (SOFR), a benchmark closely reflecting U.S. monetary policy expectations, indicate traders see a high likelihood of rate reductions at each of the remaining three Fed meetings this year. If realized, these cuts would total 75 basis points by early 2025.

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