Markets
Nia Warfield, Luke Kawa

Disappointing US economic data weighs on stocks

Bad economic news was bad news for stocks, which slumped to their lows of the day after the ISM Services Index came in at 50.1 in July, while economists had been looking for a reading of 51.5.

Major indexes clawed back some of their losses but still ended mostly in the red, with the S&P 500 off 0.5% and the Nasdaq 100 down 0.7%, while the Russell 2000 bucked the trend with a 0.6% advance.

Most S&P sector ETFs fell on the day, with utilities leading the way down.

Axon shares jumped 16%, leading S&P 500 gains, after the law enforcement equipment maker reported much better-than-expected Q2 earnings and sales after the close Monday. Leading decliners was Vertex Pharmaceuticals, which sank 20% despite posting a second-quarter earnings beat after the company said it would stop development of one of its next-generation pain medicines.

Elsewhere...

Pfizer jumped 5% after the drugmaker reported earnings results that beat Wall Street’s Q2 expectations and raised its full-year outlook.

Shares of Core Scientific were up 3% after a report from the Financial Times saying some of the company’s “top shareholders” are crying foul over the terms of its all-stock takeover by CoreWeave and are planning to vote against the deal. CoreWeave shares were up 5.5%.

Navitas Semiconductor, the tiny chipmaker that went parabolic in late May after earning a spot in Nvidia’s supply chain, tumbled 16% after reporting Q2 results.

Shares of CRISPR Therapeutics slid 6.7% after the Swiss biotech missed Wall Street’s Q2 expectations, despite growing excitement around its flagship gene-editing therapy.

Coinbase shares fell 6.3% after the largest US crypto exchange suffered an outage on Base, its ethereum layer 2 network, and halted operations for 29 minutes due to an “unsafe head delay.”

Yum! Brands shares fell 5% after the KFC and Taco Bell parent reported lower-than-expected Q2 results amid a slowdown in consumer spending at its key US franchises.

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Toby Bochan, Luke Kawa
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The insanity over the Starbucks “Bearista” cups tells you everything you need to know about the US economy and markets

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Retail traders are “skipping the dip” this time

Here’s one noteworthy feature of the recent market downturn that has the S&P 500 poised for its worst week since reciprocal tariffs were announced in early April: retail traders seemingly aren’t eager to buy the weakness in single stocks the way they used to be.

JPMorgan strategist Arun Jain has flagged that retail traders instead appear to be “skipping the dip.”

“In contrast to the behavior observed during the post-Liberation Day selloff, retail investors did not seize the opportunity to buy-the-dip on Tuesday, with a few exceptions such as META,” he wrote of the day where the benchmark US stock index fell 1.2%. “In fact, they scaled back their ETF purchases and turned net sellers in single stocks.”

Then on Thursday, when the S&P 500 fell 1.1%, Jain projected that retail traders sold $261 million in single stocks. Through noon ET on Friday, his daily outflow estimate stands at $851 million.

With that intel, it’s little wonder why the carnage this week has been particularly intense in more speculative single stocks that had been favored by the retail community, including IREN, IonQ, Rigetti, Cipher Mining, Bloom Energy, and Oklo.

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Archer Aviation plunges on $650 million share sale following its third-quarter results

Air taxi maker Archer Aviation is deep in the red on Friday morning after reporting its third-quarter results after the bell Thursday. The stock is down more than 12%.

Investors don’t appear to be thrilled about the company’s $650 million direct stock offering, announced alongside its results.

The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

Archer Aviation sinks after reporting better-than-expected Q3 loss, announces it will acquire LA’s Hawthorne Airport

Archer Aviation sinks after reporting better-than-expected Q3 loss, announces it will acquire LA’s Hawthorne Airport

The move marks at least the third major equity raise, and dilution, for Archer this year. The company raised $300 million from a new stock sale in February, and sold $850 million worth of shares in June.

On Archer’s earnings call Thursday, interim CFO Priya Gupta said the company came to the decision after “substantial inbound interest.” According to Gupta, the company has heard from government and commercial partners that liquidity is a “key driver to their decisions of who to partner with.” With its latest share sale, Archer said its total liquidity is more than $2 billion.

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