Friday’s big stock stories: What’s likely to move the market in the next trading session

As the first half of 2025 nears its close, major U.S. equity indices exhibit strong performance, with the Nasdaq 100 reaching an all-time high, up 6.8% year-to-date, and the S&P 500 gaining 4.4%, while the Russell 2000 significantly lags, down 2.6%. Concurrently, the dollar index has fallen to lows not seen since March 2022, creating tailwinds for U.S. exporters and headwinds for importers. In corporate news, Nike reported an earnings beat, with shares rallying 10% after hours, despite anticipating a $1 billion tariff impact and plans to reduce its China supply chain exposure.

Analysis

As the first half of 2025 concludes, a significant divergence is evident in U.S. equity markets. The tech-heavy Nasdaq 100 has reached an all-time high with a 6.8% year-to-date gain, and the S&P 500 is up 4.4%, while the small-cap Russell 2000 has declined 2.6% over the same period. This trend is further reflected within the technology sector itself, which, despite being up 6.5% YTD, shows stark performance disparities with top performers like Palantir and Super Micro contrasting sharply with laggards such as Enphase and EPAM. Concurrently, a key macroeconomic development is the U.S. dollar index falling to its lowest level since March 2022, creating a favorable environment for U.S. exporters like Microsoft, which hit a new high, but potential margin pressure for importers like Walmart and Home Depot. In corporate-specific news, Nike's stock surged 10% after-hours despite a cautious outlook from its CEO, as the company's earnings beat was viewed as better-than-feared. However, Nike faces a projected $1 billion headwind from tariffs and is actively reducing its supply chain reliance on China from 16% to a high single-digit percentage.

Key Decisions for Investors

• Given the significant underperformance of the Russell 2000 relative to the Nasdaq 100, investors should re-evaluate their allocation between large-cap growth and small-cap equities, as market momentum is clearly concentrated in the former.
• The sustained weakness in the U.S. dollar suggests favoring U.S. exporters with significant overseas revenue, while exercising caution with U.S. importers and retailers who may face margin compression from higher import costs.
• For Nike, the post-earnings rally indicates relief, but fundamental risks from a $1 billion tariff impact and a complex supply chain transition remain; a cautious or smaller-sized position may be prudent until the financial impact of these changes becomes clearer.
• The wide performance gap within the technology sector highlights the need for a stock-specific approach over broad sector bets, focusing on firms with demonstrated momentum and fundamental strength like those identified as Wall Street top picks.