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Earnings in focus as risks linger 21/07/2025

HOT stories for today

 

US market wrap:

  • U.S. stocks ended the day mixed, with the S&P 500 and Nasdaq posting weekly gains as earnings reports continued. The Dow Jones dipped 0.3%, while the S&P 500 slipped slightly, and the Nasdaq edged up to a record close of 20,895.66. Big Tech mostly advanced, but the S&P 500’s sectors finished unevenly.
  • Trump’s signing of the GENIUS Act sparked a sell-off in public crypto firms, even as ETH gained. Markets wavered as the President considered raising EU tariffs to 20%, per the Financial Times. Still, consumer sentiment hit a five-month high, and inflation expectations eased. Fed officials were split: Governor Kugler favored holding rates steady, while Waller signaled a possible cut within two weeks.



Earnings in focus as risks linger

  • The U.S. stock market’s rally now largely depends on corporate earnings, with traders hoping that tariff threats and Fed-related uncertainty stay in the background. Optimism is building as Big Tech prepares to report, and both the S&P 500 and Nasdaq trade near record highs. Trump’s 10% global tariffs, in effect since April, are starting to appear in corporate commentary, and investors remain cautious ahead of a possible tariff hike to 20% on August 1. However, markets have largely shrugged off past tariff threats. 
  • So far, earnings season appears positive: 85% of reporting S&P 500 companies have beaten forecasts, with solid results from major banks such as Goldman Sachs and Bank of America. Analysts expect second-quarter earnings growth near 5.6%, possibly higher, which could help sustain the rally. Still, risks linger. Concerns over Trump’s pressure on the Fed and potential leadership changes, along with shifts in spending within the AI sector, continue to weigh on sentiment. Big Tech earnings this week, including those of Alphabet, Tesla, and Intel, are expected to play a significant role in shaping the market’s direction.



Stocks on the move:

  • Talen Energy (TLNE): Shares surged over 24% after the company announced deals to acquire the Moxie Freedom Energy Center in Pennsylvania and the Guernsey Power Station in Ohio, both combined-cycle gas-fired facilities.
  • Netflix (NFLX): Shares dropped 5% after the streaming giant cautioned that its operating margin in the second half of 2025 will trail the first half, citing increased content amortization and higher sales and marketing expenses tied to a broader content lineup. Still, Netflix surpassed analysts’ revenue and earnings expectations.
  • 3M (MMM): Shares declined more than 3% as the industrial firm projected approximately 2% organic sales growth for 2025, factoring in expected tariff impacts.
  • Crypto stocks: Shares of companies tied to cryptocurrency trading advanced as ether prices reached a six-month high following the passage of the first major U.S. crypto legislation. Coinbase (COIN) gained 2%, Robinhood (HOOD) rose 4%, Galaxy Digital (GLXY) rallied over 4%, and Bitmine Immersion (BITI), an ether-focused miner, edged up 1%.


Watchlist: VZ, NXPI, DPZ, ROP, CLF, NFLX, NVDA, COIN, HOOD


Today’s action

  • Asia-Pacific markets opened the week mixed, as China’s central bank held its 1-year and 5-year loan prime rates steady. Investors also monitored fresh trade tensions after the White House reaffirmed its tariff stance over the weekend. The Japanese yen firmed following the ruling party’s defeat in Japan’s upper house elections, while Singapore’s Straits Times Index extended its rally to an eleventh straight session, hitting a new high.
  • Meanwhile, U.S. stock futures edged higher early Monday. Dow Jones Industrial Average (DJIA) futures gained 41 points (0.09%), S&P 500 (SPX) futures rose 0.13%, and Nasdaq 100 (NDX) futures advanced 0.18%. Trade tensions remained in focus as U.S. Commerce Secretary Howard Lutnick called August 1 a “hard deadline” for tariff implementation but left the door open for further talks. Markets are eyeing earnings from Alphabet (GOOGL) and Tesla (TSLA) this week, with their results seen as potential catalysts for the broader indexes. Monday’s economic data includes the June leading indicators report, while Verizon Communications (VZ) and Domino’s Pizza (DPZ) are set to release earnings later in the day.


Bitcoin

  • Ethereum’s network capacity is expanding, with gas limits recently rising above 37 million and nearly half of validators supporting a target of 45 million. This upgrade, part of the “pump the gas” initiative, is enhancing Layer 1 throughput. TPS has increased from 15 to around 18. Developers are preparing the upcoming Fusaka fork to handle the higher load and potentially push gas limits further in future upgrades.
  • Bitcoin is consolidating near $ 118,000, with analysts forecasting a possible breakout toward $ 125,000 if the current technical pattern resolves higher. Ether (ETH) is leading the rally, having recently climbed above $3,750, its highest level since late 2021, as scaling improvements strengthen network fundamentals and market momentum.
    Watchlist: BTC: 99,000–123,000 | ETH: 3,000–3,800 | SOL: 200–260

 

Forex

  • The Japanese Yen (JPY) weakened on Monday despite opening higher, as the ruling coalition’s defeat in Japan’s upper house elections fueled concerns over fiscal policy shifts. Expectations of increased spending and tax cuts, along with trade tensions ahead of the August 1 tariff deadline, added pressure. Slowing growth and easing inflation have also reduced expectations for a near-term Bank of Japan (BoJ) rate hike, prompting fresh JPY selling.
  • The EUR/USD pair traded flat near 1.1625 during Monday’s Asian session, caught between subdued U.S. Dollar (USD) demand and persistent trade concerns. While the USD stays on the defensive amid mixed Federal Reserve rate cut signals, reports of potential new U.S. tariffs on the European Union limit upside for the euro. The technical outlook remains bearish, indicating that the pair may experience further weakness ahead.
    Watchlist: EUR/USD: 1.1000–1.1850 | USD/JPY: 140–162

 

Basic Materials

  • West Texas Intermediate (WTI) crude oil edged higher toward $66.05 in Monday’s Asian session. Gains came as traders evaluated the impact of the EU’s newly agreed lower price cap on Russian crude, part of its latest sanctions package. Focus now shifts to the American Petroleum Institute’s (API) weekly crude stock report, due Tuesday.
  • Gold (XAU/USD) extended modest gains for a second day, supported by safe-haven flows amid persistent trade tensions and tariff concerns. A weaker U.S. Dollar, weighed down by mixed Federal Reserve rate-cut signals, also underpinned prices. However, gold remains range-bound, with cautious trading limiting fresh upside momentum.
    Watchlist: Gold: 2,600–3,500 | US Oil: 55.60–75.80

 

Economic Calendar (EST):

10:00 am: USD CB Leading Index


Earnings:

BMO (Before Market Open)
VZ                  Verizon Communications
ROP               Roper Technologies
DPZ                Domino’s Pizza
CLF                Cleveland-Cliffs
AMC (After Market Close): NXPI, WRB, STLD


The TEFS Analyst team wishes you a successful day!