McDonald's up 2.3%... Walt Disney and Snap down
Apple rises on news of $100 billion investment in U.S. manufacturing
Tariff and economic slowdown concerns persist... Earnings remain a key variable
The three major U.S. stock indexes showed mixed movements in early trading on August 6 (local time), remaining near flat. After falling the previous day due to weak service sector data and tariff concerns, the market is now searching for direction as it digests mixed corporate earnings results.
As of 9:38 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average (Dow) was down 10.05 points (0.02%) at 44,101.69 from the previous session. The large-cap S&P 500 Index was up 5.53 points (0.09%) at 6,304.72, while the tech-heavy Nasdaq Index was trading at 20,957.99, up 41.44 points (0.2%).
By stock, McDonald's rose 2.31% after reporting a surprise second-quarter earnings result. The company posted its largest increase in same-store sales in nearly two years. Walt Disney fell 4.94%, as revenue missed expectations even though net profit exceeded forecasts. Snap and AMD dropped 21.17% and 6.67%, respectively, after releasing results that fell short of expectations. Apple jumped 3.43% following reports that it would announce an additional $100 billion investment in U.S. manufacturing. Tesla was up 1.08%, while Nvidia slipped 0.5%.
Overall, corporate earnings released so far have been generally favorable. However, concerns that tariff policies could trigger an economic slowdown are limiting gains in the indexes. The previous day, the Institute for Supply Management (ISM) reported that the July Non-Manufacturing Purchasing Managers' Index (PMI) came in at 50.1. This was a decrease of 0.7 points from the previous month’s 50.8 and fell well short of market expectations of 51.5. In effect, the service sector has entered a stagnant phase. New orders declined, employment slowed, and price pressures increased. As signs of stagflation?rising prices amid economic stagnation?emerge, there is analysis that the U.S. Federal Reserve (Fed) may face even greater challenges in its monetary policy response.
Wall Street remains divided on the outlook for the stock market. Some express caution, expecting prolonged uncertainty, while others are optimistic that a rebound will follow a short-term correction.
Brett Kenwell, U.S. investment analyst at eToro, said, "There are many issues to watch in today's investment environment, but corporate earnings remain the main catalyst for stocks. While macroeconomic impacts and seasonal factors may cause stock prices to fall, this is more likely to present a buying opportunity."
John Bell, portfolio manager at Newton Investment Management, commented, "Earnings are important, but the most significant factor dominating market headlines is the macroeconomy. It seems difficult to expect uncertainty to decrease. Even if there is certainty about tariff levels, another variable?such as worsening economic indicators?will emerge."
On the other hand, Keith Lerner, co-chief investment officer (CIO) at Truist Wealth, assessed, "We just have things to digest. The market does not always move in a straight line. The underlying trend remains positive overall."
U.S. Treasury yields are rising. The 10-year U.S. Treasury yield, the global benchmark for bond rates, was up 3 basis points (1bp=0.01 percentage point) from the previous session at 4.22%. The 2-year U.S. Treasury yield, which is sensitive to monetary policy, rose 1 basis point to 3.73% from the previous day.
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