Stock Market Soars Today: S&P 500 Reaches Peak Following Verizon's Profitable Quarterly Results
Record Highs for S&P 500 and Nasdaq Composite
The S&P 500 and Nasdaq Composite notched new record closing highs on Monday, with the S&P 500 ending at 6,305 (+0.1%) and the Nasdaq Composite at 20,974 (+0.4%). Meanwhile, the Dow Jones Industrial Average swung lower into the close, shedding 0.04% to end at 44,323.
Verizon Communications' Strong Financial Performance
Verizon Communications reported higher-than-expected earnings and revenue for Q2, leading to a 4.0% jump in its stock price. The telecom giant also raised the lower end of its full-year earnings forecast and lifted its free cash flow guidance due to an estimated benefit of $1.5 billion to $2 billion from the One Big, Beautiful Bill (OBBB) tax legislation.
The OBBB has had a positive impact on Verizon's free cash flow, primarily through restored favorable tax treatments and tax savings that improve financial flexibility. The legislation reinstates R&D expensing, a key provision benefiting Verizon's tax planning and cash flow. This, coupled with the company's strong $8.8 billion free cash flow position and healthy debt-to-EBITDA ratio, underpins Verizon's financial resilience and ability to invest in broadband and 5G infrastructure.
S&P 500 Expansion with Block
Block, previously known as Square, was selected as the newest S&P 500 stock, replacing Hess (HES) ahead of the opening bell on July 23. This addition underscores the growth and adoption of digital payments and fintech industry, with many trillions of passive dollars invested in products that track the index.
CFRA Research analyst Caydee Blankenship believes Block's inclusion underscores the widespread adoption of digital payments and highlights how the fintech industry has transformed traditional banking models.
Steel and Aluminum Tariffs
President Donald Trump raised tariffs on steel and aluminum imports to 50% from 25%, with exceptions for the United Kingdom. Cleveland-Cliffs CEO Lourenco Goncalves stated that these tariffs have played a significant role in supporting the domestic steel industry. As a result, Cleveland-Cliffs surged 12.5% after reporting a bottom-line beat on in-line sales in Q2 due in part to higher steel prices.
The Genius Act and Stablecoins
The Genius Act, if passed, could provide a regulatory framework for stablecoins, potentially benefiting the fintech industry. This includes Block, which could see further growth opportunities across the entire digital payments ecosystem due to friendly regulation from the Trump administration.
The Largest ETF in the World
The Vanguard S&P 500 ETF (VOO), the largest ETF in the world, has nearly $683 billion in assets under management. Block's inclusion in the S&P 500 is significant because many trillions of passive dollars are invested in products that track the index.
Conclusion
In summary, the markets saw record highs for the S&P 500 and Nasdaq Composite, while Verizon Communications enjoyed strong financial performance and tax benefits from the One Big Beautiful Bill. The S&P 500 expanded with the addition of Block, a company well-positioned to benefit from the growth and adoption of digital payments and fintech industry. Additionally, steel tariffs played a role in supporting the domestic steel industry, and the Genius Act could provide a regulatory framework for stablecoins, potentially benefiting the fintech industry. The Vanguard S&P 500 ETF remains the largest ETF in the world, with many trillions of passive dollars invested in products that track the index.
- The addition of Block, previously known as Square, to the S&P 500 could open up further growth opportunities for the company in the digital payments and fintech industry, particularly if the Genius Act provides friendly regulation for stablecoins.
- Crypto and DeFi (decentralized finance) companies might be interested to note that Verizon Communications, a traditional player in finance through its telecommunications services, saw a boost in its financial performance due to the One Big Beautiful Bill legislation.
- As the S&P 500 and Nasdaq Composite reached new record highs, traditional investing in the stock-market is thriving, while sectors such as crypto trading might also benefit from the overall growth in the financial markets.
- President Trump's decision to raise tariffs on steel and aluminum imports to 50% could influence the trading of these metals in the global market, potentially impacting businesses like Cleveland-Cliffs that specialize in these materials.
