U.S. stocks update all-time high as earnings season starts | Stock Voice | Manekuri Media providing investment information and money-related tips from Monex Securities.

U.S. stocks remain strong, with capital inflows into previously lagging stocks and sectors

• The S&P 500 updated its all-time high on June 27. This surpassed the previous high recorded on February 19, about four months before the imposition of tariffs by the Trump administration. Since then, the upward trend has continued, with five all-time highs updated to date. Most recently, it reached another high on July 10, and although there has been a slight adjustment since then, the year-to-date return stands at +6.6%, indicating that U.S. stocks are performing steadily.

The Nasdaq Composite updated its all-time high on July 14, showing a +6.9% increase since the beginning of the year, despite President Trump's tough tariff policies.

Among these, Nvidia [NVDA] has garnered attention. Last week (week of July 7), its market capitalization surpassed $4 trillion (approximately 600 trillion yen). It has exceeded the all-time high market capitalization set by Apple [AAPL] at the end of 2024. Nvidia's stock price has risen 22% since the beginning of 2025. Amid renewed focus on Trump tariffs and a general wait-and-see mood in the market ahead of the FOMC (Federal Open Market Committee), Nvidia's stock has played a leading role in the market.

Another notable stock is Netflix [NFLX]. The company has risen by 42% since the beginning of 2025 and has seen a 95% increase over the past 12 months, marking an astonishing performance that is nearly double. This surge is attributed to a rapid increase in subscribers due to measures against password sharing and the introduction of ad-supported plans.

• It has been a concern that only large-cap stocks like the Magnificent Seven have been rising, but especially since July, there has been a broadening across the entire market. The S&P 500 index has risen by +1% so far in July, while the S&P 500 Equal Weight Index has increased by +1.5%, surpassing the returns of the market-cap-based S&P 500. This means that not only large-cap stocks like the Magnificent Seven are rising, but also regular market-cap stocks are firmly increasing. Furthermore, the S&P 600 (small-cap index) has risen by +3.5%, clearly indicating that funds are flowing into previously lagging stocks and sectors.

Q2 earnings announcement, cautious forecasts ahead

• The earnings season officially begins today, July 15, local time. During the three-week period from July 11 to August 1, companies representing 73% of the S&P 500 by market capitalization are scheduled to announce their earnings. Looking at the year-on-year performance forecasts for the S&P 500 from the fourth quarter of 2021 to the third quarter of 2026, the previous forecast for the first quarter of 2025 showed a strong increase of +13.6% year-on-year, whereas the current forecast for the second quarter of 2025 anticipates a slight slowdown. At this point, the market's forecast indicates a growth rate of +2.5% year-on-year.

・At first glance, one might think, "Compared to the previous +13.6%, this +2.5% is quite disappointing," but the previous forecast was +6.7%. It turned out to be a surprisingly good result of +13.6%. This indicates that the impact of the tariffs imposed by the Trump administration was fully factored in, but in the end, it was not as bad as expected. This time as well, the market's preliminary forecasts seem to be very cautious, and in reality, there is a very high possibility that it will exceed expectations.

In this earnings season, the overall S&P 500 is expected to see a year-on-year profit increase of +2.5%, but when looking at sector-specific performance, the growth varies significantly. Among the sectors, the IT sector stands out with a projected year-on-year profit increase of +16.6%. Additionally, the communication services sector is also expected to have a profit increase of +12.8%, and it is expected to play a leading role in driving the overall earnings announcements this time as it is also related to IT.

Among the IT sectors, particularly in the semiconductor sector, a profit increase of +34% year-on-year is expected, leading to significantly heightened market expectations. Until now, semiconductor-related stocks, including Nvidia, have been the driving force behind stock prices, fueled by the expectation that "this time the performance also seems to be good." Therefore, if the reported earnings fall slightly short of expectations, it would be wise to consider the possibility that stock prices may drop temporarily.

Conversely, even if the financial results are solid, if they have already been factored into the stock price to some extent, the rise may be limited. It is necessary to pay attention to both "the content of this announcement" and "the gap in expectations."

One more point of concern is the extent to which companies can absorb the rising costs imposed by President Trump's tariff policy without passing them on to the prices of products and services. This is important as it could significantly impact future corporate performance, so caution is necessary.

The next market catalyst is the financial sector's earnings announcements

• This week (the week of July 14), 38 companies in the S&P 500 index are scheduled to announce their earnings, with half of them being financial institutions. The catalyst for the next market movement is likely to be the earnings announcements from the financial sector. The recent steepening of the yield curve and the widening of the interest rate spread tend to be favorable for banks and could lead to improved profitability for commercial banks and regional banks.

• Regarding banks, this week JP Morgan Chase [JPM], Citigroup [C], and Wells Fargo [WFC] will announce their earnings on Tuesday, July 15th, followed by Bank of America [BAC], Goldman Sachs [GS], and Morgan Stanley [MS] on Wednesday, the 16th. In this earnings report, the extent to which the narrowing of interest margins has impacted the results, along with exposure to commercial real estate and holding risks, are expected to be major points of interest.

In addition, there is market interest in the earnings reports of large non-financial companies such as Johnson & Johnson [JNJ] (16th), GE Aerospace (General Electric) [GE] (17th), and Netflix [NFLX] (17th).