Key Points

• S&P 500 and Nasdaq Extend Record Rally as Earnings Strength and Trade Deals Boost Sentiment: U.S. equities continue to climb, with strong corporate earnings and optimism over new U.S. trade agreements pushing the S&P 500 and Nasdaq to fresh record highs ahead of next week’s Fed meeting.
• Puma Shares Plunge as Q2 Loss Forces Outlook Cut and Sparks Industry Pressure: Puma issued a profit warning after a deeper-than-expected quarterly loss, slashing its 2025 outlook as elevated inventories, weak apparel sales, and U.S. tariffs weigh on margins.
• Dollar Gains Slightly Ahead of Fed Meeting as Trade Optimism Offers Support: The dollar edged higher but remains set for a weekly loss as traders focus on the Fed’s upcoming policy decision, with trade negotiations involving the EU and China providing modest support.
• Asia Stocks Slip as Trade Tensions and Policy Outlook Weigh; Vietnam Hits Multi-Year High: Most Asia-Pacific markets closed lower as investors weighed trade developments and regional conflicts, while Vietnam’s benchmark index surged to its highest level in over three years, supported by industrial and energy gains.

S&P 500 and Nasdaq Extend Record Rally as Earnings Strength and Trade Deals Boost Sentiment

U.S. stock futures edged higher early Friday, extending a rally that has pushed the S&P 500 and Nasdaq Composite to fresh record highs. The S&P 500 closed above 6,300 for the first time Monday, marking its 13th record of 2025, while the Nasdaq surpassed 21,000 midweek. Strong corporate earnings underpin the momentum, with 83% of reporting S&P 500 companies beating expectations, led by Alphabet’s robust results.

Optimism over new U.S. trade deals with Japan and Indonesia further buoyed sentiment ahead of the Trump administration’s Aug. 1 tariff deadline. Markets remain focused on next week’s Fed meeting, where rates are expected to hold at 4.25%-4.5%.

Puma Shares Plunge as Q2 Loss Forces Outlook Cut and Sparks Industry Pressure

Puma shares tumbled 16% after the company issued a profit warning and slashed its 2025 outlook following a deeper-than-expected second-quarter loss. Currency-adjusted sales fell 2% to €1.94 billion, with declines across all major regions and sharp weakness in apparel and accessories offsetting modest footwear growth. Gross margin contracted to 46.1% amid promotional pressure and currency headwinds, while inventories rose 10% year over year to €2.15 billion.

Puma now expects full-year sales to drop in the low double digits and forecasts a negative EBIT, reversing prior guidance. Analysts warn of elevated clearance activity as competition, including Nike’s planned relaunch, intensifies.

Dollar Gains Slightly Ahead of Fed Meeting as Trade Optimism Offers Support

The U.S. dollar edged higher Friday, with the Dollar Index up 0.2% to 97.34, but remained set for a 1% weekly loss, its weakest in a month. Support came from optimism over potential trade agreements with the EU and China ahead of the August 1 deadline, though investor focus has shifted to next week’s Federal Reserve meeting, where rates are expected to hold.

The euro traded near four-year highs at $1.1745, while the yen weakened after Tokyo inflation eased, pushing USD/JPY up to 147.71. Sterling fell to $1.3468 on softer U.K. retail sales, underscoring uneven consumer demand.

Asia Stocks Slip as Trade Tensions and Policy Outlook Weigh

Asia-Pacific equities ended mostly lower Friday as investors assessed recent trade developments and regional tensions. Japan’s Nikkei 225 fell 0.88% to 41,456.23, while the Topix slipped 0.86% after hitting a record high in the prior session. Australia’s ASX 200 and China’s CSI 300 declined 0.49% and 0.53%, respectively, while South Korea’s Kospi gained 0.18%. Vietnam’s benchmark index hit a 39-month high, buoyed by industrials and energy stocks.

Meanwhile, border clashes between Thailand and Cambodia threatened tourism-dependent economies, and HSBC projected the Bank of Japan may raise rates to 0.75% in October, citing trade-driven growth optimism.

Conclusion

The week closed with U.S. equity indices at record highs, powered by broad-based earnings strength and renewed optimism around trade agreements. The dollar regained some footing amid ongoing negotiations with major partners, though faces pressure ahead of next week’s critical Fed decision on interest rates. Puma’s sharp earnings miss and revised outlook highlight intensifying pressure in consumer discretionary sectors.

Across Asia, market sentiment took a cautious turn amid trade tensions and geopolitical flashpoints, though emerging markets such as Vietnam continue to attract attention with strong sectoral performance. Investors will now look to U.S. labor data and central bank commentary to set the tone for August.

Investment Insights

• Equities: Record U.S. index highs reflect strong earnings momentum, but breadth remains narrow—rotation into lagging sectors may be key for sustained upside.
• Consumer Discretionary: Puma’s profit warning underscores margin and inventory risks across apparel; investors should monitor peers for similar pressure, especially ahead of Nike’s relaunch.
• Currencies: Dollar stability hinges on Fed commentary; any hawkish tone could reverse recent weakness, favoring exporters and rate-sensitive trades.
• Asia-Pacific: Vietnam’s equity rally highlights selective opportunities in industrials and energy, while broader regional markets face headwinds from trade tensions and geopolitical risks.

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Disclaimer: This newsletter provides financial insights for informational purposes only. It does not constitute financial advice or recommendations for investment decisions.