Stan Choe, AP Business Writer
NEW YORK (AP) — Wall Street is drifting towards the finish of its past four victory week on Friday as more US companies bring stronger profits than analysts expected.
The S&P 500 slid 0.1% in the afternoon trade after setting it to an all-time high the day before. The Dow Jones industrial average fell 207 points (0.5%) as of 12:43pm ET, while the Nasdaq Composite fell 0.1%, away from its own record.
Norfolk Southern is up 2.5% after AP sources said they were talking to Union Pacific about the merger that will create North America’s largest railway. But such a deal will likely face severe scrutiny from US regulators. Union Pacific stock fell 1.6%.
Meanwhile, the two weights in the market were companies that reported higher profits in the latest quarter than analysts expected.
Netflix has dropped by 5.1%. Analysts said it was no surprise that the stocks were slower despite reporting stronger returns than expected. So far, it had already spiked 43% this year, but has now more than six times the profits of the S&P 500.
Similarly, American Express provided a profit report that surpassed expectations, but its stock lost 2.7%. Analysts noted that it slows the growth of several underlying trends, such as the number of cards issued.
Exxon Mobil sank 3.3% and helped pull into the market again. He had been trying to buy Chevron’s $53 billion deal to buy Hess, but the acquisition was made in an arbitration ruling over Hess’ assets off the coast of Guyana. Chevron slid 1.3%.
The stronger than expected profit report in the spring supported several stock gatherings. Charles Schwab rose 2.5%, with regional finance adding 5.6% and Comerica adding 4%.
The Treasury Department was eased as it was suggested that US consumers reported not fearing inflation. Preliminary results from the University of Michigan survey show that, from last month’s 5% forecast, the next 4.4% inflation is responsible for 4.4% inflation.
That’s important. This is because expectations for high inflation can supply actions that create a vicious cycle that keeps inflation high. Meanwhile, consumer sentiment was better hair than economists expected, but still well below the historical average.
According to Joanne HSU, the research director, “Unless consumers are convinced that inflation is unlikely to worsen, they are unlikely to regain confidence in the economy unless they feel that inflation is unlikely to worsen.”
The 2010 Treasury yield sank to 4.42% from 4.47% in the second half of Thursday. The two-year Treasury yield tracks closer expectations about what the Federal Reserve will do at the short-term rate, but this has also fallen. It fell from 3.91% to 3.86%.
Fed official Gov. Chris Waller said late Thursday that the Fed should immediately cut overnight interest rates in a few weeks. That follows acute criticism from President Donald Trump, who has denounced the Fed for stabilizing interest rates this year, as he did late last year.
Lower fees could improve the economy, and Trump also implies that the US government can help save money on paying debts, but that’s uncertain. The interest rates that Washington has to pay for long-term debt depend on bond investors’ thinking more than what the Fed does, and can even move in the opposite direction.
Meanwhile, the Fed chair argues that before the Fed makes the next move, he wants to see more data on how Trump’s tariffs will affect the economy and inflation. The drawback of low interest rates is that they can give more fuel to inflation, and prices may already be beginning to feel the upward impact of tariffs.
According to CME Group data, Wall Street traders believe the Fed is much more likely to resume cut interest rates in September rather than later this month.
In overseas stock markets, indexes were mixed across Europe and Asia. Hong Kong’s Hangsen jumped 1.4%, but Tokyo’s Nikkei 225 slipped 0.2% ahead of the Senate election on Sunday.
AP writers Teresa Cerojano and Matt Ott contributed.
Original issue: July 18, 2025, 8:46am EDT
