UOB Kay Hian Private Wealth Management
25 July 2025

Global Markets Update: AI, Tech Leaders, and Tariffs Dominate Q2 Earnings Season

Market Overview: Record Highs Amid Mixed Global Signals

The S&P 500 and Nasdaq reached new record highs, buoyed by robust earnings from tech giants such as Alphabet and Nvidia. Treasury yields surged on the back of low US unemployment claims, prompting a reassessment of Federal Reserve rate cut expectations. Meanwhile, the ECB held rates steady, and the euro dipped slightly. In Asia, the World Artificial Intelligence Conference in Shanghai spotlights China’s aggressive push in global AI, with leading players like Tencent, Alibaba, and emerging startups capturing attention.

Key Indices and Commodities Snapshot

Technology Titans: Earnings and AI Innovation

Nvidia (NVDA)

• Stock hit an all-time high, rising 1.73%.
• Core recommendation due to strong demand for AI chips like the B200, now shipping globally in larger volumes.
• Servers with eight B200 GPUs are priced above RMB3 million, pushing up demand despite ongoing US export bans on H100s and A100s.
• US lawmakers are proposing legislation to further curb illicit chip flows.

Alphabet (GOOGL)

• Shares rose 1.02% on better-than-expected earnings and a record close for the Nasdaq.
• Google secured a \$1.2 billion, five-year cloud deal with ServiceNow, reinforcing Google Cloud as the fastest-growing segment.
• Alphabet remains a core recommendation.

Microsoft (MSFT)

• Shares up 0.99% ahead of 4QFY25 earnings, with EPS expected to climb 14.1% year-on-year to \$3.37 and revenue projected up 14.1% to \$73.88 billion.
• Microsoft is highlighted as a core recommendation.

Meta Platforms (META)

• Shares gained 0.17%. 2Q EPS is expected to rise 13.9% to \$5.88, with revenue up 14.7% to \$44.8 billion.
• Meta reports earnings after-hours on July 30 and is a core recommendation.

Tencent (700 HK) and Alibaba (9988 HK)

• Key players at Shanghai’s World AI Conference, showcasing China’s ambition in AI innovation, open-source models, and standard-setting.
• Tencent shares up 0.91%; Alibaba down 0.5%.
• Both companies are core recommendations.

US and Americas: Retail, Autos, and Regulatory Spotlight

Walmart (WMT US) vs. Amazon (AMZN US)

• Walmart outperformed Amazon during its weeklong “Deals” event, recording 24% year-on-year sales growth versus Amazon’s 4.9% for Prime Day.
• Walmart’s online momentum signals intensifying e-commerce competition, while Amazon maintains a 40% share of the \$1.3 trillion US online market.
• Both are core recommendations.

Tesla (TSLA US)

• Shares plunged 8.2% after weak earnings, a 13% year-to-date sales drop, and limited updates on the US robotaxi rollout.
• Regulatory scrutiny is increasing, with Morgan Stanley warning of downside risks.

VeriSign (VRSN)

• Beat 2Q earnings with \$2.21 per share, supported by 170.5 million .com and .net domains and robust new registrations.
• Slight revenue miss; classified as Trading Buy.

Intel (INTC US)

• Will cut 15% of its workforce and slow factory growth.
• Forecasts a steeper 3Q loss of \$0.24 per share on \$12.6–13.6 billion in revenue, after a 2Q adjusted loss of \$0.10 per share and \$1.9 billion in restructuring costs.

UnitedHealth (UNH US)

• Disclosed cooperation with DOJ investigations into its Medicare business, triggering a 4.76% stock drop and a 44.3% YTD loss.
• Initiated third-party reviews and highlighted a favorable ruling in a long-running civil case.

Union Pacific (UNP US) and Norfolk Southern (NSC US)

• In advanced \$200 billion merger talks to form the first coast-to-coast US freight railroad, igniting industry-wide deal speculation.
• Faces significant regulatory and labor hurdles.

Chevron (CVX US)

• US to reinstate limited oil licenses for Chevron and European partners in Venezuela, with conditions limiting profits to the Maduro government.

SpaceX Starlink

• Major global outage affected over 61,000 users, with partial restoration and a fix in progress.

Honeywell (HON US)

• Raised 2025 revenue and profit forecasts after 2Q sales up 8.1% to \$10.35 billion and EPS of \$2.75, beating estimates.

Verizon (VZ US)

• Ordered to pay \$175 million to Headwater Research for patent infringement. Verizon plans to appeal.

Boeing (BA US)

• FAA reviewing supply chain before lifting the 737 MAX production cap after 2024 safety incident. Certification of MAX 7 and MAX 10 still pending.

Greater China: M&A, Regulation, and Market Dynamics

JD.com (JD US, 9618 HK)

• In advanced talks to acquire German electronics retailer Ceconomy for €2.2 billion, offering a 23% premium per share. Aims to leverage Ceconomy’s European network.
• JD.com classified as Trading Buy.

Policy and Regulatory Actions

• China released a draft law to curb price wars, banning below-cost selling and unfair pricing practices, including data and algorithm misuse. Proposes tougher penalties amid deflationary pressures.
• EU-China ties at an inflection point after a tense trade and Ukraine summit. Cooperation agreed on climate, but deep divisions remain on market access and exports.
• Markets anticipate serious action from Beijing on overcapacity, driving commodity prices higher. Supply-side reforms are ongoing but progress is gradual.

BYD (1211 HK)

• Plans to assemble EVs in Pakistan by mid-2026 at a 25,000-unit plant, targeting a 30-35% market share in EV and plug-in hybrids.

TikTok

• Faces US shutdown without Chinese approval of a sale deal transferring US operations to American owners. Deadline: September 17.

Ant Group

• Signed an agreement with Chengdu’s government to establish an AI service HQ and R&D center, focusing on fintech innovation and cross-border payments.

LVMH (MC FP)

• Sales fell 9% in fashion and leather goods in 2Q, especially in China and Japan. Overall profit declined 15% year-on-year.
• CEO Bernard Arnault plans a second Texas factory by 2027, anticipating a favorable US-EU trade deal to mitigate tariffs.

Li Ning (2331 HK)

• Chairman increased stake to 13.08% from 12.81%, with a total transaction of HK\$79.1 million.

China Automobile Sector

• PV sales dipped 0.5% year-on-year in the 29th week of 2025 despite a 7% week-on-week rebound.
• BYD faces online backlash over CNMFT sponsorship; authorities may tighten rules on zero-mileage used cars.
• GWM’s strong 2Q25 profit triggered a 26% net profit forecast upgrade. Top sector BUYs: CATL, Geely, Tuo. Market Weight maintained.

China Property Sector

• SOEs broadly in line in 1H25, with CGS showing revenue growth but margin and impairment challenges. CR Mixc replaces COPH as top pick amid stable retail trends. Sector remains underweight with raised target prices due to lower WACC.

Asia ex-China: Tariffs, Restructuring, and Returns

Hyundai Motor (005380 KS)

• 2Q operating profit fell 16% due to a \$606 million US tariff hit, with a bigger impact predicted for 3Q. Revenue grew 7% year-on-year.

Rio Tinto (RIO LN)

• May sell its titanium unit due to weak returns. Incoming CEO Simon Trott will focus on streamlining core businesses (iron ore, copper, lithium, aluminium) and cost-cutting measures.

Singapore’s GIC

• Posted a 3.8% 20-year annualized return, the slowest in five years. Increased exposure to US infrastructure and equities, reduced Asia Pacific holdings.

EMEA & Global: Luxury, Banking, and Autos

LVMH, Kering, Hermes, Prada

• LVMH and Kering saw further 2Q sales drops amid weak US and China demand and trade war risks. Gucci sales fell nearly 25% year-on-year, while Hermes and Prada posted growth.

European Auto Sector

• June car sales dropped 5.1% due to rising Chinese competition and 25% US tariffs. Volkswagen, Stellantis, Renault, Hyundai, and Tesla all reported declines, while EV and hybrid registrations surged to 59.8% of EU sales. German, French, and Italian sales all decreased sharply.

UBS (UBSG SW) and BlackRock (BLK US)

• UBS ended Credit Suisse’s Aladdin contract with BlackRock to cut costs and integrate asset management. Funds will shift to UBS systems by year-end.

Deutsche Bank (DBK GR)

• Posted a €1.485 billion 2Q profit, beating expectations due to strong trading. Cut its corporate revenue outlook as retail and corporate growth remain muted.

BNP Paribas (BNP FP)

• 2Q profit dropped 4% year-on-year to €3.26 billion but beat forecasts. Expects 2H25 revenue to rise over 5% and reaffirmed its €12.2 billion net income goal.

IPO Calendar: Hong Kong Health Care Listings

Conclusion: Markets at a Crossroads

The global financial landscape is marked by record-breaking performances in US tech, heightened regulatory scrutiny, and shifting trade dynamics. Investors are closely monitoring AI innovation, tariff impacts, and evolving consumer trends, particularly in luxury and automotive sectors. Key companies such as Nvidia, Alphabet, Tencent, Alibaba, Walmart, Amazon, and JD.com stand out as leaders amid a backdrop of uncertainty and opportunity.