Market Halt Scheduled for Earnings and Data Review: Stock Market Update Today
In the current economic landscape, the United States is experiencing a moderate growth trajectory, albeit with some cautions due to tariff pressures and inflation, as well as a softening labor market.
The U.S. trade deficit narrowed more than expected in June, coming in at $60.2 billion, which should provide a boost to Gross Domestic Product. However, inflation remains above target, with core inflation projected to reach 3% by year-end, and headline CPI expected to rise to about 3.0–3.1% in Q3 and Q4, partly due to tariff-related cost pass-throughs to consumers.
The labor market shows signs of weakening, with job gains below the estimated replacement rate (~75,000 jobs), and the unemployment rate slightly rising from 4.2% in Q2 to an expected 4.3–4.4% later this year. Despite this, employment remains relatively solid overall.
Stock markets have been resilient and mostly positive, with the S&P 500 up over 8% year-to-date through July, driven by strong corporate earnings and tech sector strength, despite lingering inflation and consumer confidence concerns.
The Federal Reserve's July meeting held rates steady at 4.25–4.50%, but communications and recent data indicate a shift toward easing. Markets price an 87% chance of a 0.25% rate cut in September, with approximately 2.5 cuts anticipated through the rest of 2025. Fed officials remain cautious, balancing inflation risks from tariffs and labor market softness, with monetary policy still estimated to be about 1 percentage point above neutral.
Meanwhile, the service sector is teetering on slipping into a contraction, as the Institute for Supply Management's Services Purchasing Managers Index declined to 50.1 in July. This deceleration in the ISM service sector PMI is reigniting recession fears.
In the tech sector, Palantir Technologies crossed the $400 billion market capitalization threshold and forecasted the highest sequential quarterly revenue growth in its history, representing 50% year-over-year growth. Analyst Dan Ives reiterated his Outperform (or "Buy") rating on PLTR and raised his 12-month target price from $160 to $200. UBS Global Research analyst Karl Keirstead raised Palantir's full-year growth rate guidance from 36% to 45%. Palantir's non-GAAP margin target is up to 46%.
Looking ahead, Constellation Energy is scheduled to report earnings before Thursday's opening bell. The service sector's stability and the ongoing tech sector growth remain key factors to watch in the coming months.
References:
- Economic Report of the President
- Federal Open Market Committee
- S&P 500 YTD Performance
- CME FedWatch
- ISM Services PMI July 2025
- The current financial landscape, marked by moderating economic growth and rising inflation, has not dissuaded investors from the digital finance sector, as evidenced by Palantir Technologies reaching a $400 billion market cap and forecasting its highest sequential quarterly revenue growth.
- Despite softening labor market indicators and a looming service sector contraction, the stock market, led by the S&P 500, has exhibited resilience, potentially presenting an opportunity for investing in the stock-market.
- In response to the recent data pointing towards a weakening labor market and decelerating service sector, the Federal Reserve may be inclined to ease monetary policy, with markets pricing an 87% chance of a 0.25% rate cut in September, which could impact the investing landscape moving forward.
