Top 5 Market Updates to Kickstart the Week: Earnings, Tariffs, and Tech Outages

Earnings season kicks off with Domino's Pizza, followed by General Motors, Tesla, American Airlines, and Chipotle. About 86% of S&P 500 companies that have reported have exceeded expectations. President Trump disputed a report on Treasury Secretary Scott Bessent advocating for Fed Chair Powell's firing. Commerce Secretary Howard Lutnick reaffirmed the Aug. 1 deadline for tariffs, but US trading partners may question if it's a hard deadline. Alaska Airlines grounded flights due to an IT outage. Microsoft reported "active attacks" on its servers used by government agencies.

Earnings season is off to a mixed start, with Domino's Pizza and General Motors reporting quarterly results that have investors both optimistic and cautious. Domino's Pizza, the world's largest pizza chain, exceeded analysts' expectations for second-quarter U.S. same-store sales by 3.4%, driven by new menu items and promotions [1]. The company's online sales grew due to discounts and its partnership with DoorDash, which doubled its share of sales made through third-party delivery channels. International same-store sales also grew by 2.4%, while quarterly revenue rose 4.3% to $1.15 billion. However, Domino's posted a 2% reduction in gross margin for its U.S. company-owned stores due to price hikes on ingredient packs.

General Motors, on the other hand, beat revenue expectations by 2.7% last quarter, reporting revenues of $44.02 billion, up 2.3% year over year. The company's adjusted operating income narrowly beat estimates, but it missed EBITDA estimates [2]. Analysts expect General Motors' revenue to decline 2.7% year over year to $46.66 billion in the current quarter. The majority of analysts covering the company have reconfirmed their estimates, suggesting they anticipate the business to stay the course heading into earnings.

Geopolitical uncertainties, including President Trump's feud with Fed Chair Jerome Powell over interest rates, have added a layer of complexity to the earnings season. Treasury Secretary Scott Bessent has emerged as a top candidate to replace Powell, with Trump acknowledging his candidature but not considering him a top contender [3]. Meanwhile, Commerce Secretary Howard Lutnick reaffirmed the Aug. 1 deadline for tariffs, but trading partners may question if it's a hard deadline. Additionally, Alaska Airlines grounded flights due to an IT outage, and Microsoft reported "active attacks" on its servers used by government agencies.

About 86% of S&P 500 companies that have reported have exceeded expectations, indicating a strong start to earnings season. However, the geopolitical uncertainties and ongoing trade tensions may continue to impact the market sentiment.

References:

[1] https://finance.yahoo.com/news/dominos-beats-quarterly-sales-estimate-101136716.html
[2] https://www.tradingview.com/news/stockstory:51023601e094b:0-general-motors-gm-q2-earnings-report-preview-what-to-look-for/
[3] https://www.livemint.com/news/us-news/who-is-scott-bessent-us-treasury-secretary-to-replace-fed-chair-jerome-powell-heres-what-donald-trump-said-11752628279279.html