CWS Market Review – July 15, 2025

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The Major Banks Kick Off Earnings Season

The S&P 500 reached a new intra-day high today — over 6,300, but the market gradually gave back those gains and closed lower on the day. The Dow lost over 430 points but the Nasdaq closed a little higher. The Russell 2000 Index of small-cap stocks was especially weak today. The index lost 1.8% today.

Today was the unofficial start to Q2 earnings season, and the big banks like to go first. We had six major financial institutions report results today. Here’s a breakdown of what they had to say.

JPMorgan Chase (JPM) reported Q2 earnings of $5.24 per share. That’s a decline of 17% from last year’s Q2, but it beat Wall Street’s estimate of $4.48 per share. Quarterly revenue was $45.68 billion which topped estimates of $44.06 billion.

JPM was helped last quarter by a $2.8 billion provision for credit losses. Fees from investment banking increased 7% to $2.5 billion. JPM also raised its guidance for net interest income to $95.5 billion.

Shares of Citigroup (C) have been popular recently. The stock has rallied 40% over the last three months. This morning, the bank said that its Q2 net income rose 25% to just over $4 billion. Citi’s total market revenue was up 16% over last year. Its banking unit was up 18%.

For the quarter, Citi earned $1.96 per share. That topped estimates by 36 cents per share. The bank had revenue of $21.67 billion which beat estimates of $20.98 billion. Earlier this month, Citi raised its dividend from 56 cents to 60 cents per share. The shares got a nice rally today.

Financial stocks have led Wall Street over the past year, but they’ve lagged over the last three months.

Wells Fargo (WFC) beat earnings but lowered its guidance for net interest income. For Q2, Wells had earnings of $1.54 per share which topped expectations by 13 cents per share. WFC’s profit was up from the $1.33 per share it made one year ago.

In April, Wells said it expected net interest income growth at the low end of its 1% to 3% range. Now it says that its net interest income will be in line with last year’s total.

Last month, after seven years, the Federal Reserve finally lifted the $1.95 trillion asset cap on Wells. The bank said it aims to expand carefully. The stock was down over 5% today.

Bank of New York Mellon (BK) had a solid quarter. For Q2, BK’s revenues were up 9% to $5.03 billion. Wall Street had been expecting $4.78 billion.

For earnings, BK made $1.94 per share. That was a 19-cent beat. Net interest income increased 17% to $1.2 billion. The bank also raised its quarterly dividend from 47 cents to 53 cents per share. BK was mostly flat today.

Shares of State Street (STT) got clobbered today after the asset manager missed its earnings estimate. For Q2, State Street made $2.17 per share while Wall Street had been expecting $2.35 per share.

Revenue for the quarter was $3.4 billion which was slightly higher than the $3.35 billion that Wall Street had expected. Assets under custody hit a record $49 trillion and assets under management hit a record $5 trillion. Last quarter, STT launched 39 new products.

Lastly, we have BlackRock (BLK) which is the largest asset manager in the world. Despite its size, BlackRock had its worst earnings day in more than a decade even though the company beat expectations. Of course, when the market behaves like that, you must wonder what the expectations really were.

Client assets under management rose to a record $12.5 trillion. Revenues rose 13% to $5.4 billion which barely missed estimates. Larry Fink said, “Long-term, I’m a huge buyer of BlackRock at these prices.”

Interestingly, BlackRock pulled in $14 billion for crypto ETFs. The company said it holds a $330 million stake in stablecoin issuer Circle. BLK was down around 5.5% today.

Today was only the beginning. Tomorrow, Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC) will report. Abbott Labs (ABT), our first Buy List stock, will report on Thursday, along with Pepsi (PEP) and Netflix (NFLX).

Consumer Prices Rose 0.3% Last Month

We also got the CPI report for June. Inflation continues to be mostly benign but not fully benign. The long-awaited tariff inflation has not arrived, at least not in a serious way.

Last month, consumer prices increased 0.3%. That was in line with expectations. Over the last year, inflation increased by 2.7%. This is another data point in my thesis that getting inflation down from 9% to 3% was surprisingly easy but that getting from it from 3% to 2% is proving to be very difficult. CNBC has a good breakdown of the report.

If we look at the core rate, which excludes food and energy prices, then inflation rose by 0.2% last month. That was 0.1% below expectations. Over the last 12 months, core inflation is running at 2.9%.

Before a few months ago, inflation had been consistently drifting lower. That trend appears to have stopped. The 12-month inflation rate ending in May was 2.4%. Inflation accelerated by 0.3% last month. The 12-month rate is now the highest it’s been since February. We now have clear signs that duties are impacting prices.

Vehicle prices fell on the month, with prices on new vehicles down 0.3% and used car and trucks tumbling 0.7%. However, tariff-sensitive apparel prices rose 0.4%. Household furnishings, which also are influenced by tariffs, increased 1% for the month.

Shelter prices increased just 0.2% for the month, but the BLS said the category was still the largest contributor to the overall CPI gain. The index rose 3.8% from a year ago. Within the category, a measurement of what homeowners feel they could receive if they rented their properties increased 0.3%. However, lodging away from home slipped 2.9%.

Last month, food prices increased by 0.3%. Over the last year, food prices are up by 3.0%. Energy prices had fallen in May but they increased by 0.9% last month. Adjusted for inflation, hourly earnings fell by 0.1% in June.

There’s been a standoff recently between the White House and the Federal Reserve. President Trump has argued strenuously for the Fed to resume cutting interest rates. The Fed has said that it would love to cut rates if not for the president’s tariff policies. Chairman Powell’s term is up in May, and it’s clear that he won’t be renominated.

The Fed meets again in two weeks and it’s highly unlikely that the Fed will cut interest rates this time around. The futures prices for not cutting are currently at 97.4%. After the July meeting, we’ll start to see the Fed move.

You can expect earnings news to dominate Wall Street for the coming few weeks. Tomorrow we’ll get the report on industrial production. Then on Thursday, the retail sales report is due out. That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy