US stock markets took a break from record breaking highs in a week which saw four of the Mag-7 report earnings, worth roughly $11 trillion of market capitalisation, a Federal Reserve interest rate decision, more inflation data and non-farm payrolls.
Big earnings beats from Microsoft (MSFT:NASDAQ) and Meta Platforms (META:NASDAQ) on Wednesday (29 July) were well received while disappointing guidance from Amazon (AMZN:NASDAQ) saw its shares drop more than 7% in afterhours trading (31 July).
Apple (APPL:NASDAQ) beat third quarter forecasts but investors gave it a lukewarm reaction with the shares set to open around 2% higher when markets reopen today (1 Aug).
The Federal Reserve kept its powder dry as expected, leaving overnight interest rates unchanged and a hawkish press conference sent stocks lower and bond yields higher. Futures markets priced in a low probability of a rate cut in September.
Part of the reason for the Fed’s hold stance was uncertainty around the impact on inflation from rising tariffs, which was vindicated on Thursday (31 July) when the personal consumption expenditure prices index picked up to 2.8% on an annualised basis from 2.6%.
All eyes now turn to today’s non-farm payrolls, due out before the markets open. The consensus expectation is the economy added 110,000 jobs in July, down from 147,000 in June.
APPLE
Shares in Apple (AAPL:NASDAQ) ripened 2.1% to $211.9 in pre-market trading after the tech titan delivered (31 July) better-than-expected third quarter revenue and revealed positive news from China at last.
Unfortunately, concerns over how tariffs will impact demand for its products in the US kept a lid on gains as most iPhones sold in the US originate from India which means they are in the firing line.
These phones are not cheap in the first place, but they could become even pricier if the tariffs are passed on to the end user and this scenario is worrying investors.
Led by chief executive Tim Cook, Apple has now beaten forecasts in nine out of the past 10 quarters and iPhone sales have started to improve in China following a spell in the doldrums amid fierce competition from local players.
Apple’s third quarter revenue came in a touch above $94 billion, up 10% year-on-year and ahead of the $89.3 billion Wall Street consensus.
The beat was largely driven by iPhone revenue of $44.6 billion, which topped estimates of $40.1 billion, while services revenue reached an all-time high, growing 13% to almost $27.5 billion and reinforcing their importance as a key driver of the Cupertino-based giant’s future growth.
EBAY
Shares in Ebay (EBAY:NASDAQ) gained as much as 18% in a day (31 July) as the e-commerce platform delivered better-than-expected second-quarter results and issued an upbeat forecast.
The company reported net revenue of $2.73 billion, beating analysts’ estimates of $2.64 billion and rising 6.1% from a year earlier buoyed by solid demand from its international marketplaces, while adjusted EPS (earnings per share) climbed 16% to $1.37, also beating expectations of $1.30.
Chief executive Jamie Iannone said: ‘Our momentum reflects the strength of our strategic execution and the resilience of our marketplace.’
The company also revealed various initiatives to enhance customer experience, including Ebay Live in the UK and an AI (artificial intelligence) shopping agent which delivers real-time, hyper-personalised product recommendations and expert guidance.
Total advertising offerings yielded $482 million in revenue, an improvement on the previous quarter, while GMV (gross merchandise volume) exceeded forecasts, which analysts at Jefferies said should help ease concerns about a softer consumer backdrop or potential trade disruptions.
For the third quarter, the company expects revenue between $2.69 billion and $2.74 billion, above the consensus estimate of $2.65 billion.
PROCTER & GAMBLE
Consumer goods colossus Procter & Gamble (PG:NYSE) sank 3.6% to a 52-week low of $153 after the Pampers-to-Pantene maker introduced (29 July) flat guidance for 2026 that included a $1 billion hit from tariffs.
Disappointment on the tariffs front took the gloss off forecast-beating fourth-quarter results from the Cincinatti-based goliath, which crafted a 2% rise in revenue to $20.9 billion and a 17% jump in earnings per share to $1.48, ahead of the $20.82 billion and $1.42 expected by Wall Street respectively.
‘We grew sales and profit in fiscal 2025 and returned high levels of cash to shareowners in a dynamic, difficult and volatile environment,’ said CEO Jon Moeller. Procter & Gamble, whose other brands include Tide, Gillette and Head & Shoulders, guided for full-year 2026 sales growth of 1%-to-5% and earnings per share in the $6.83 to $7.09 range, below the $6.99 analysts were calling for.
Earlier in the week (28 July), Procter & Gamble announced that chief operating officer Shailesh Jejurikar, who has helped lead some of the company’s key businesses around the globe, will succeed Moeller in the hot seat on 1 January 2026.
