Stock market today: Dow slips as S&P 500, Nasdaq waver near latest records

US equities saw mixed performance Friday, with the Nasdaq Composite achieving a new record high and the S&P 500 securing a weekly gain, while the Dow Jones slipped. Markets largely overlooked renewed tariff threats from President Trump, buoyed instead by solid economic data, including robust consumer spending and a notable decline in consumer inflation expectations to 4.4%. Key corporate earnings were mixed, with Netflix shares declining despite a profit beat due to investor concerns over guidance and valuation, contrasting with strong results from American Express. Meanwhile, the political focus on Fed Chair Jerome Powell's position temporarily receded.

Analysis

US equity markets displayed a bifurcated performance, with the tech-heavy Nasdaq Composite closing at a new record while the Dow Jones Industrial Average declined 0.3%. The market demonstrated resilience, largely absorbing geopolitical headline risk associated with President Trump's reported push for 15-20% tariffs on EU imports ahead of an August 1 deadline. This muted reaction was supported by strong domestic economic signals, including robust consumer spending and a significant drop in one-year inflation expectations from 5.0% to 4.4%, according to the University of Michigan survey. Corporate earnings provided a mixed picture, underscoring a selective investor appetite. American Express (AXP) posted strong results, confirming the strength of high-end consumer spending. Conversely, Netflix (NFLX) shares declined despite a wide profit beat, as its forward guidance was insufficient to support its high valuation, signaling that investors are demanding more than just historical performance from high-growth stocks.

Key Decisions for Investors

• Monitor consumer spending and inflation data closely, as the market is currently prioritizing these domestic indicators over geopolitical tariff threats.
• Recognize that for high-valuation technology stocks like Netflix, strong forward guidance is now a critical catalyst, as a simple earnings beat may not be sufficient to drive share price appreciation.
• Despite current market indifference, the potential for 15-20% EU tariffs by the August 1 deadline constitutes a significant tail risk, warranting a review of exposure to companies with high European revenue concentration.
• The outperformance of the Nasdaq versus the Dow, coupled with American Express's strong results, suggests a preference for companies levered to the resilient US consumer over those with greater industrial or international trade exposure.