Morning in New York: Corporate Earnings in the Spotlight

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Capital Markets Research at Freedom Broker.

Investors’ attention has shifted to the quarterly results of the largest U.S. technology companies. The markets are reacting negatively to the pre-market earnings reports from Alphabet (GOOGL) and Tesla (TSLA). Intel’s (INTC) report, due out after the close of trading today, will provide the next important signal for the semiconductor sector. The company’s adjusted revenue could show double-digit growth for the first time since 2020, driven by data centers and its manufacturing business. The most important metrics for traders will be demand for server processors, the ability to attract customers to contract manufacturing, and margin performance amid high investment levels. A strong report from Intel could halt the decline of the SOX sector index and, by providing insight into server demand, sustain interest in Nvidia (NVDA) shares. Falling short of shipment targets, coupled with rising expenses and stagnant revenue, will contribute to continued sell-offs in the sector.

As is customary on Thursdays, the weekly unemployment insurance claims data will be released. The consensus estimate for initial claims is 215,000, following 208,000 in the previous period; the consensus estimate for continuing claims is 1.822 million, compared with 1.805 million a week earlier. Tensions in the Middle East remain a driver of oil price growth, but their impact on global stock market trends is currently taking a back seat.

Before the start of the main trading session, American Airlines (AAL), Nokia (NOK), T-Mobile US (TMUS), Thermo Fisher Scientific (TMO), Comcast (CMCSA), Freeport-McMoRan (FCX), and Honeywell (HON) will report their quarterly results. After the market closes, Intel (INTC), Newmont (NEM), Digital Realty (DLR), Edwards Lifesciences (EW), SAP (SAP), MaxLinear (MXL), and Deckers Outdoor (DECK) will report their earnings.

S&P 500 futures are trading lower. We assess the risk outlook for the upcoming session as moderately negative, with elevated volatility. A correction in the shares of large-cap index components amid the release of their quarterly reports, coupled with rising oil prices, is putting pressure on the market.

— Alphabet (GOOGL) shares are down about 4%, despite strong quarterly results. Google Cloud’s revenue rose 82% to $24.8 billion, exceeding consensus estimates, but investors are concerned about the plan to increase capital expenditures by $15 billion in 2026, to $195–205 billion. Negative free cash flow also raised concerns.

— Tesla (TSLA) shares are down about 5%, even though the company reported a 26% increase in quarterly revenue. Revenue from the automotive business came in above average estimates, but the gross margin fell to 16.8% from a consensus estimate of 19.4% due to a decline in the average selling price of vehicles and revenue from regulatory credits.

— United Rentals (URI) shares are rising by about 8% as its quarterly revenue and earnings came in above consensus, and its 2026 guidance for revenue and adjusted EBITDA was revised upward to $17.5–17.8 billion and $8–8.1 billion, respectively.

— ServiceNow (NOW) shares are up more than 8% following the release of its quarterly earnings report, which beat expectations. Revenue rose 24% year-over-year to $3.98 billion, and earnings exceeded the consensus estimate. Management’s comments regarding the company’s expanding presence in nearly every U.S. state and the continued growth in demand for AI solutions in the public sector provided an additional positive.

— Texas Instruments (TXN) shares are down more than 4%, despite better-than-expected earnings and a third-quarter forecast above consensus. The company reported a 23% year-over-year increase in revenue and a recovery in demand for analog chips.

Trading on July 22 on U.S. stock exchanges ended in the red. The S&P 500 fell 0.14%, the Nasdaq 100 dropped 0.54%, the Dow Jones lost a symbolic 0.01%, and the Russell 2000 fell 0.92%. The session proceeded without any significant catalyst: momentum stocks continued their rebound following last week’s sell-off, but major tech companies—with the exception of NVIDIA (NVDA: +2.30%), traded in the red. The negative trend was driven by shares of software developers, regional banks, payment systems, transportation companies, and travel firms.

The defensive utilities sector (XLU: +2.25%) led the gains. Among the underperformers were telecommunications (XLC: -0.75%) and consumer discretionary (XLY: -0.74%). Positive news in the AI sector, including reports of a partnership between Anthropic and Advanced Micro Devices (AMD: +1.45%) and OpenAI’s planned increase in spending on computing infrastructure, supported demand for technology stocks.

Treasury bond yields rose by 2–4 basis points, and the auction of 20-year Treasuries fell short of expectations. The probability of a rate hike at the Fed’s July meeting rose from 15% at the start of the week to nearly 34%, despite the slowdown in inflation recorded in June. The forecast for monetary policy tightening is based on a 3% increase in WTI crude oil prices and recent hawkish comments from Fed officials.

News from the Middle East — regarding uncertainty over the timing of the resumption of negotiations between the U.S. and Iran, Donald Trump’s threats to respond to attacks on ships in the Strait of Hormuz, and the Houthis’ statement that they are prepared to launch strikes in the Red Sea – the market reacted cautiously.

— Wabtec (WAB: +10%) reported quarterly earnings, revenue, and profitability that exceeded expectations. Its guidance for 2026 was raised. Steady growth in orders and the backlog, recorded for the fourth consecutive quarter, has bolstered investor confidence that demand will remain strong.

— Controlling shareholders have proposed delisting Penske Automotive Group (PAG: +9.9%). Penske Corp. and Mitsui have valued the company at $210 per share in cash, representing a 7.6% premium to the previous closing price and a transaction value of approximately $3.8 billion.

— AT&T (T: +3.5%) exceeded consensus estimates for growth in its wireless and internet subscriber base, with low customer churn. The telecom’s management reaffirmed its full-year guidance and announced an acceleration of its share buyback program. A buyback of approximately $10 billion is planned for 2026.

— GE Vernova’s adjusted EBITDA (GEV: -8.7%) came in below forecasts; in addition, the Wind segment reported a decline in results. Strong order growth in Power and Electrification did not offset increased losses from the wind power division and a warning about tariff-related expenses of $100–200 million.

— Arrowhead Pharmaceuticals (ARWR: +19%) reported successful results from two Phase III trials. Its drug, plozasiran, met its primary endpoint for reducing triglyceride levels and all secondary endpoints. The company confirmed its intention to file an additional application for its approval in the U.S. by the end of the year.

This article was AI-translated and verified by a human editor