The Atlanta Fed’s GDPNow model cooled a bit but stayed firmly in expansion territory, with its Q3 growth estimate slipping to 4.3% from 4.8%. The downgrade gives traders a softer growth signal, but the level still points to an economy running hot enough to complicate the Fed’s job.
The major indices have turned lower across the board. The Nasdaq Composite is on pace for a flat weekly performance.
A WSJ analysis is posing a question around the AI trade. The paper found that “other income” accounted for 71% of Alphabet’s quarterly profit, largely from markups on equity stakes including SpaceX and Anthropic. Amazon had a similar issue, with other income making up 66% of earnings, driven mainly by its Anthropic stake. The takeaway? AI investments are boosting paper gains, but that makes it harder to separate recurring earnings power from one-time valuation lifts.
The consumer is growing weary of holding up the economy. Retail sales fell 0.6% in July versus expectations for a 0.1% gain, while core retail sales slipped 0.3% against forecasts for a 0.2% increase. The miss gives traders a fresh growth concern, even as softer demand could also keep pressure off the Fed.
The bond market was largely unmoved, with the 10-year Treasury yield rising less than 1 basis point to 4.645%.
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Nasdaq futures edged higher as Wall Street tried to extend a record-setting week. Nasdaq-100 futures rose 0.2%, while S&P 500 futures hovered just above the flatline. Dow futures slipped 67 points, or 0.1%, giving the morning tape a mixed feel on the heels of Thursday’s fresh high. The setup still leans constructive. The S&P 500 hit an intraday record of 7,816.70 yesterday and also finished at a closing high, helped by strength in technology and communication services.
For the week, the S&P 500 and Nasdaq Composite are both on track for a third straight advance, up 0.5% and 0.4%, respectively. The Dow is lagging with a 0.4% weekly decline. Earnings remain the main support: with more than 90% of S&P 500 companies reported, second-quarter profit growth is tracking around 50%, according to FactSet.
Here’s a look at where things stand as of pre-morning trading:
Dow Futures: 53,823 Down 0.21%
Nasdaq 100 Futures: 30,261 Up 0.24%
S&P Futures: 7,827 Up 0.06%
Reddit (NYSE: RDDT) shares are indicated higher now that the social-media platform will join the S&P 500. The move puts Reddit in line for index-fund demand as it replaces AvalonBay Communities (NYSE: AVB), which is being acquired by Equity Residential (NYSE: EQR). The pop comes after a rough year for RDDT stock, which had fallen nearly tkt% YTD amid concerns that AI tools could pull traffic away from Reddit’s message boards.
The S&P 500’s record push is not coming from AI alone. Old-school refiners have become surprise leaders, with Marathon Petroleum (NYSE: MPC) up 20% this week through Thursday and Valero Energy (NYSE: VLO) up 13.1%. The driver is margin expansion; disruptions tied to the Iran war and attacks on Russian energy infrastructure have tightened supplies of gasoline and diesel, sending refined-fuel prices higher faster than crude.
Tesla (Nasdaq: TSLA) is reportedly nearing a Roadster reveal as soon as this month, with The Information saying the company may include a new “flying stunt” in the debut. The concept gives Tesla a fresh product-cycle spark, though investors will still be watching whether the long-delayed Roadster can move from spectacle to production.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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