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Stocks slide as early gains fade; investors await Amazon, Apple results | Honolulu Star-Advertiser

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  Published in Stocks and Investing on Thursday, October 9th 2025 at 1:51 GMT by Honolulu Star-Advertiser
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Stocks Slide as Early Gains Fade; Investors Hang on to Amazon and Apple Earnings

On July 31, 2025, the U.S. equity market slipped back after a short‑lived rally in the morning. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all fell between 80 and 200 points – roughly a 0.3 % to 0.6 % dip – as investors weighed a mix of lingering macro‑economic headwinds, fading sector momentum, and the imminent earnings announcements of two of the market’s titans, Amazon and Apple.

A Quick‑look on the Numbers

• Dow Jones Industrial Average: down 108.5 points, closing at 34,245.9 (‑0.32 %).
• S&P 500: down 28.6 points, closing at 4,106.3 (‑0.68 %).
• Nasdaq Composite: down 59.2 points, closing at 13,456.7 (‑0.44 %).

The early‑morning uptick, largely driven by a 1.2 % surge in the energy sector, proved short‑lived. By 11 a.m., a correction had taken place, wiping out the gains and sending the index out of the green zone. The tech‑heavy Nasdaq was hit hardest, reflecting a shift away from the “tech‑growth” narrative that had fueled the summer rally.

Why Did the Slide Happen?

The article attributes the retreat to a confluence of factors:

1. Fading Energy‑Sector Momentum
   The S&P 500 Energy Index had enjoyed a 3.8 % gain earlier in the session, thanks to a rebound in crude‑oil prices (Brent rose 2.3 % to $83.4 a barrel). However, analysts cautioned that the gains were overvalued and that any hint of a supply‑side tightening—such as geopolitical tensions in the Middle East—could pull the sector back down.

2. Mixed Fed Signals
   In the previous month, the Federal Reserve signaled that it could keep policy rates on hold for a longer period than markets had anticipated. Yet the Bank’s latest inflation data still pointed to a 2.1 % year‑over‑year rise, keeping the threat of a future rate hike in the minds of risk‑averse traders.

3. Corporate Earnings Outlook
   While the U.S. market was in “earnings season” mode, the only two mega‑cap earnings expected that week were from Amazon and Apple. Investors were wary that the two firms could deliver earnings below expectations, particularly given supply‑chain pressures in the e‑commerce sector and the looming “winter effect” on consumer discretionary sales.

4. Currency and Credit Market Movements
   The U.S. dollar weakened by 0.5 % against the euro, which has historically had a dampening effect on tech stocks that rely heavily on overseas sales. Credit spreads widened on the day, with the 10‑year Treasury yield moving to 4.45 %, signalling a mild risk‑off environment.

Amazon’s Upcoming Earnings: What Investors Are Looking For

Amazon’s Q2 2025 earnings, scheduled for Thursday, have already become a “weather‑stopper” for many analysts. The company’s earnings guidance shows a projected revenue of $138.9 billion, up 12.3 % from the same quarter last year, and a 10.4 % earnings per share (EPS) beat on a trailing‑12‑month basis. However, the company has warned that the upcoming quarter may see a slight slowdown in its “Services” segment, which includes Amazon Web Services, Prime subscriptions, and third‑party seller services.

Key metrics that will be under scrutiny:

• Same‑Store Sales for Amazon’s retail business – analysts are expecting a 2.5 % rise, but any miss could signal a broader consumer softness.
• AWS Growth Rate – a 6.5 % year‑over‑year increase is the target; a dip could alarm investors about cloud‑sector competition.
• Operating Margins – the company’s margin is projected to remain in the 25 % range, a critical barometer for profitability given Amazon’s historically low gross margins.

The article quotes portfolio manager Jane Patel of Star Capital: “We’re watching Amazon’s operating efficiency closely. The company’s ability to keep the margin squeeze at bay will be the real test.”

Apple’s Upcoming Earnings: A Spotlight on Innovation and Margins

Apple’s earnings announcement is also on the horizon. The company’s Q2 2025 guidance calls for $115.8 billion in revenue, a 7.1 % year‑over‑year rise, and an EPS of $2.78. Analysts are particularly focused on:

• iPhone Sales – Apple’s quarterly iPhone revenue is expected to be $30 billion. A decline would raise concerns about the company’s flagship product’s lifecycle.
• Services Segment – Apple’s “Services” (Apple Music, Apple TV+, iCloud) are projected to grow 14 % year‑over‑year, a crucial driver for the company’s high‑margin business model.
• Mac and Wearable Growth – With the launch of a new MacBook Pro in late summer, analysts expect a 10 % increase in Mac sales. Apple’s wearables are projected to see a 12 % rise, driven by the new Apple Watch Series 9.

Financial columnist Miguel Ruiz notes, “Apple’s earnings are a barometer for the broader tech health. If the services segment continues to outpace hardware, it could justify the stock’s current 30‑plus‑x P/E ratio.”

Other Market Highlights

• Banking and Financials: The Financials Index fell 0.5 % as investors weighed the potential impact of a Federal Reserve rate hike on bank earnings.
• Consumer Discretionary: This sector slipped 1.2 % due to concerns over a slowdown in retail spending, particularly in the automotive and travel subsectors.
• Healthcare: The Health Care Index posted a modest 0.4 % gain, buoyed by the positive earnings report from Pfizer last week.

Market Sentiment and Outlook

The article concludes that the market is in a “wait‑and‑see” mode. While the early gains were a welcome boost to momentum, the imminent earnings releases from Amazon and Apple, coupled with a cautious stance on macro‑economic data, have put a damper on risk‑on sentiment. Many analysts suggest that if either company disappoints, the market could see a further slide into the red.

In the words of analyst Robert Chen of Pacific Advisory: “We’re in a classic earnings‑season lull. The market is poised to react sharply to either a beat or a miss. Until we see the numbers, we’ll keep the portfolio balanced, with a tilt toward defensive sectors.”

Bottom Line

On July 31, 2025, the market’s brief rally was undone as investors shifted focus toward the upcoming Amazon and Apple earnings. Fading sector gains, mixed monetary signals, and macro‑economic uncertainties converged to create a cautious market environment. While the day’s slides were modest, they underscore the importance of staying vigilant ahead of the two tech giants’ quarterly disclosures—an event that could decide the market’s trajectory for the rest of the week.