China Deadline, CPI Data Next as Tech Drives Rally

Published as of: August 11, 2025, 9:09 a.m. ET

(Monday market open) Stocks ticked higher early but could be in a holding pattern ahead of tomorrow's China tariff deadline and Consumer Price Index data. Though a 90-day extension for China is possible, failure would send U.S. tariffs on Chinese imports up an additional 34%. China would probably retaliate, dimming last week's glow when U.S. chip tariffs turned out less spooky than expected. President Trump raised the stakes today, urging China to quadruple its U.S. soybean orders in a throwback to negotiations from his first term.

Though September rate cut odds spiked after July's cooler jobs report, a hot CPI tomorrow could still warm yields up and raise questions about Fed policy further down the road. Analysts expect 0.2% monthly July headline CPI growth and 0.3% core, which excludes food and energy. That compares with 0.3% and 0.2% in June. But investors will drill deeper after June showed tariff-related impacts from rising furniture and apparel prices and steeper inflation affecting a wider number of items.

The market reopens after a solid performance last week as tech earnings kept impressing. The Nasdaq Composite posted its second straight record close Friday and the S&P 500 index missed by a nose. "A lot of the melt-up in stocks has to do with optimism around economic growth related to heavy investment in AI and onshoring in the U.S. due to Trump’s trade policy," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research. "And Q2 earnings have been supporting that notion, apart from some consumer-related names due to tariffs."

1. After see-saw week, market still teeters: Stocks boomeranged last week in a relatively narrow range for the major indexes even as individual stocks moved sharply with earnings driving their fortunes. The market seems caught between bullish and bearish stories. In the bulls' favor, it's been a strong earnings season and heavy AI investment continues powering the mega caps. Tariffs could drive the growth of "onshoring" and ultimately aid the U.S. industrial economy. And hopes for not just one but several rate cuts over the next year also provide a positive undercurrent. On the bearish side, recent jobs, manufacturing, and services data weakened, and the market is in a tough time seasonally. Tariffs could hurt company margins. The S&P 500 index, though closing just centimeters below July's all-time record Friday, has spent its time between 6,300 and 6,400 intraday lately, with selling accelerating at the highs and dip buying showing up at lows. The 20-day moving average ended at 6,325 last week and has provided support over and over since the April melt-down.
    
2. Momentum monitored as earnings pace slows: The Relative Strength Index (RSI) finished around 62 Friday for the S&P 500 index, well under the 70 level that signals overbought conditions, but still relatively high. The RSI could be worth tracking this week as earnings ebb and focus shifts more to monetary and trade policy. One thing that could grab attention is if stocks continue pushing their way to new highs even as RSI posts lower peaks. That's called a bearish divergence and suggests momentum may be slowing. When momentum tracked by RSI slowed in late July, stocks briefly struggled. The quarter is moving into a period where there won't necessarily be earnings excitement each day to put a charge into the market, though Nvidia (NVDA), Salesforce (CRM), and Broadcom (AVGO) are exceptions in late August and early September.
    
3. Earnings impress, but P/E still elevated: Second quarter S&P 500 earnings are on track to climb 11.8%, FactSet said Friday in its latest tally. That would be the third consecutive quarter of double-digit earnings growth and more than double what analysts had expected entering the quarter. With 90% of companies reporting, 81% have topped analysts' average earnings per share (EPS) estimate. Margin helped make the difference, as net profit margin for S&P 500 stocks rose nearly 13% in the second quarter from 12.2% a year earlier, suggesting companies are becoming more efficient, especially in the info tech and financials sectors. Despite earnings strength, the S&P 500 index sports a forward price-to-earnings (P/E) ratio above 22, compared with the 10-year average near 18. One reason for the overall strength in P/E is the impact of mega-cap stocks, most of which trade at even higher P/E levels and dominate the S&P 500 in terms of market cap. The S&P 500 Equal Weight Index (SPXEW), which measures all members equally and not by market cap, was outpaced by the cap-weighted S&P 500 last week.

• Apple (AAPL) climbed more than 4% Friday and topped $230 intraday for the first time since March. The 13% rally last week tapped into Apple's recent solid earnings and its announcement last Wednesday of a $100 billion investment in U.S. production. There also may have been a technical element, as shares pushed above its 200-day moving average of $221. Shares slipped Monday morning.
   
• Nvidia and Advanced Micro Devices (AMD) both slipped early Monday after the Financial Times reported Sunday that the two chip makers will receive export licenses to sell Nvidia's H20 and AMD's MI308 chips in China in return for the U.S. government receiving 15% of revenues from those sales. Nvidia made its 19th all-time high of the year Friday and is up 36% year to date.
   
• Wendy's (WEN) slipped nearly 1% Friday despite earnings beating Wall Street's expectations. Guidance appeared to disappoint.
   
• Freeport-McMoRan (FCX) added 1.6% ahead of the open after getting upgraded by Morgan Stanley to Overweight from Equal Weight. The analyst said shares aren't pricing in the benefits that will accrue to Freeport from copper tariffs.
   
• Intel (INTC) climbed 2.8% early Monday as The Wall Street Journal reported that Intel's CEO is expected to visit the White House today. Last week, Trump called for the CEO's ouster.
   
• Under Armour (UAA) plunged 20% Friday though results matched analysts' projections. The company's guidance for falling revenue and lower operating income this quarter hurt shares, and it cited tariffs.
   
• C3.ai (AI) tumbled 31% in the early going after it pre-announced that Friday's results would miss expectations.
   
• Paramount Skydance (PSKY) rose 2.3% ahead of the open after Paramount and Skydance closed their merger late last week.
   
• CoreWeave (CRWV) climbed 7% Friday ahead of tomorrow's earnings report from the AI cloud computing firm. Citigroup said in a report that it believes CoreWeave is positioned to report another double-digit revenue beat amid strong AI demand.
   
• Albemarle (ALB) spiked 10.5% after a battery maker said it had shut down a major lithium mine in China, Barron's reported. This sent shares of lithium producers, including Albemarle, up sharply on ideas Beijing could be trying to address overproduction.
   
• Micron (MU) rose 6.2% Friday and another 4.7% this morning. The chip firm raised its August quarter earnings per share and revenues above consensus views, citing improved pricing among other factors.
   
• Bitcoin (/BTC) jumped 2.6% early Monday and stocks related to crypto, including Strategy (MSTR) and Coinbase (COIN) also rose more than 3%. Bitcoin is in rally mode just below all-time highs after Trump signed an Executive Order to allow 401(k) investors to access alternative assets for "better returns and diversification," the White House announced—this includes crypto.
   
• The S&P 500 gained in market breadth last week after a sharp decline in that metric the week before. By late Friday, 56% of S&P 500 stocks traded above their 50-day moving averages, still down sharply from a peak near 75% last month. Breadth measures how widespread buying and selling is across the market.
   
• Chances of a Fed rate cut next month are around 86.5%, according to the CME FedWatch Tool. Fed Vice Chair Michelle Bowman said over the weekend she could see three rate cuts happening this year based on soft jobs data.

The small-cap Russell 2000^® Index (RUT—candlesticks) kept pace with the broader market last week, climbing more than 2% but not recapturing its late-July peak close. In a constructive technical development, the RUT's 50-day moving average (red line) crossed above its 200-day moving average (blue line) for the first time since March. Sometimes such a move, called a "bull cross," indicates upward momentum might continue.