Wall Street Near Record Highs on Strong Corporate Earnings/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street hovered near record levels on Friday as upbeat earnings from major U.S. companies lifted investor sentiment. The S&P 500 and Nasdaq continued their climb, boosted by merger speculation and corporate buyouts. Traders remain cautiously optimistic, awaiting signals on potential Fed rate cuts and economic sentiment data.
Weekly Wall Street Wrap Quick Looks
- S&P 500: Edges 0.2% higher, sets new record
- Nasdaq Composite: Gains 0.4%, extends rally
- Dow Jones: Slips 25 points (-0.1%) in early trade
- Earnings Impact: Schwab +4.4%, Comerica +2.3% on strong Q2 profits
- Railroad Merger Buzz: Norfolk Southern +2.6% amid Union Pacific deal talks
- Netflix Dips: Shares down 4.7% despite beating earnings expectations
- Chevron Climbs: +1.3% after finalizing $53B Hess acquisition
- Bond Market Reaction: Yields fall as rate-cut expectations rise
- Fed Rate Outlook: Gov. Waller urges July rate cut; markets betting on September
- Global Markets: Mixed results in Asia and Europe; Hang Seng +1.4%, Nikkei -0.2%
Wall Street Near Record Highs on Strong Corporate Earnings
Deep Look
NEW YORK — July 18, 2025 — Wall Street ended the week in strong position as the S&P 500 and Nasdaq Composite flirted with record highs, fueled by solid earnings reports and growing speculation around Federal Reserve policy shifts.
The S&P 500 gained 0.2% Friday morning, continuing its upward momentum after setting a new all-time high the previous day. The Nasdaq climbed another 0.4%, while the Dow Jones Industrial Average dipped slightly by 25 points (0.1%) in early trading.
Merger Mania and Market Movers
Among standout performers, Norfolk Southern surged 2.6% after sources told the Associated Press that the company is in merger talks with Union Pacific to potentially form the largest railroad in North America. While the move could create a coast-to-coast logistics giant, it would likely undergo intense regulatory scrutiny.
Meanwhile, Chevron rose 1.3% after announcing the finalization of its $53 billion acquisition of Hess, a deal greenlit by a favorable arbitration ruling over key offshore oil assets in Guyana.
Despite beating Wall Street profit expectations, Netflix saw its stock slide 4.7%. Analysts pointed to a likely sell-the-news scenario, as the streaming giant’s shares had already soared more than 43% year-to-date—far outpacing the S&P 500’s growth.
Financials also rallied, with Charles Schwab and Comerica up 4.4% and 2.3%, respectively, following stronger-than-expected Q2 earnings.
Bond Market Signals and Fed Tensions
Yields on U.S. Treasury notes retreated slightly as investors digested expectations that the Federal Reserve may soon lower interest rates. The 10-year yield fell to 4.42%, while the 2-year yield dropped to 3.86%, reflecting softening inflation expectations and a possible easing cycle.
Federal Reserve Governor Christopher Waller, in a speech Thursday night, called for a rate cut at the July meeting, arguing that the economy’s growth momentum is slowing and action is needed to prevent labor market deterioration.
“The economy is still growing, but its momentum has slowed significantly,” Waller noted. “We need to act now.”
Waller’s remarks set him apart from Fed Chair Jerome Powell, who has taken a more cautious stance, stating that the central bank needs more time to assess the impact of President Trump’s new tariffs on inflation and economic stability.
Political Pressure and Economic Outlook
Trump has intensified his criticism of Powell and the Fed’s hesitation to lower rates, suggesting that rate cuts would stimulate the economy and potentially reduce the government’s interest expenses on national debt. However, experts caution that long-term rates are more influenced by investor sentiment than Fed actions.
While some Fed members—like Michelle Bowman—agree with Waller, the majority still favor holding rates steady, based on the Fed’s most recent meeting minutes. Still, CME Group data shows markets are pricing in a rate cut more likely in September, not July.
Global Market Pulse
Overseas markets offered mixed signals. Hong Kong’s Hang Seng rallied 1.4%, fueled by tech gains and easing concerns around regulatory crackdowns. In Japan, the Nikkei 225 slipped 0.2% ahead of a key upper house election that could reshape the country’s political future.
European indexes hovered near flat as investors awaited earnings results and further data on economic recovery across the eurozone.
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