Flat U.S. PPI Fuels Inflation Debate Amid Earnings Volatility, Johnson & Johnson Beats Estimates | MarketReader Minute
U.S. economic data stirs market volatility as PPI stagnates, UK inflation rises, and trade tensions persist amid mixed bank earnings.
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Wednesday, July 16
Recent economic data releases have significantly influenced market sentiment, particularly in the U.S. The Producer Price Index (PPI) for June showed that producer prices were unchanged from May and below expectations of a slight increase, while core PPI also stalled unexpectedly.
In the equity markets, mixed earnings reports from major banks contributed to volatility; although some indices like Nasdaq reached record highs driven by strong performances in tech stocks such as Nvidia Corp., broader indices faced declines due to rising bond yields and ongoing trade tensions. Notably, fears surrounding tariffs imposed on various countries continue to weigh heavily on investor confidence.
Additionally, UK inflation figures exceeded forecasts with annual CPI climbing to 3.6%, prompting speculation regarding potential delays in monetary easing measures by the Bank of England amid heightened price pressures across transport and food sectors. These developments are likely influencing both currency valuations—particularly against a backdrop of fluctuating dollar strength—and overall global market dynamics as investors assess future policy implications amidst evolving geopolitical landscapes.

SPDR Dow Jones Industrial Average ETF Trust (DIA) [+0.4%]
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has seen a price increase of 0.4% since Tuesday. Notably, the ETF experienced a significant inflow of $1.7 billion on July 14, 2025, ranking second among its peers. This surge occurred amid outflows from competitors such as Invesco, which faced $1 billion in outflows, and Direxion and ProShares, which saw reductions in assets. Among DIA's holdings, Goldman Sachs Group Inc. and Johnson & Johnson were top contributors, with both companies reporting strong second-quarter earnings that exceeded analyst expectations. The Dow Jones Index is currently up, reflecting a daily return following the release of these robust earnings from major banks, including Goldman Sachs. Additionally, higher-than-expected inflation data from the UK has led traders to reassess their outlook on global interest rates.
Financial Select Sector SPDR Fund (XLF) [+0.5%, +181.6M]
The Financial Select Sector SPDR Fund (XLF) has experienced a price increase of 0.5% in pre-market trading. The U.S. Producer Price Index (PPI) for June showed no change month-over-month, with annual growth slowing to 2.3%, easing inflation concerns and positively influencing financial assets like XLF. President Trump's announcement of a new trade agreement aimed at reducing tariffs on Indonesian exports may further benefit the financial sector. Goldman Sachs reported record equity trading revenue, surpassing expectations, which contributed to a rise in its shares. Additionally, significant contributors to XLF's performance include Progressive Corp., JPMorgan Chase, Bank of America, Blackstone, and Global Payments, all showing positive returns driven by strong earnings reports and strategic developments.


JNJ | +2.1% | +8.0B
Johnson & Johnson | Pharmaceuticals
Johnson & Johnson reported its Q2 2025 results, revealing an adjusted earnings per share (EPS) of 2.77, surpassing the estimate of 2.68. Sales reached 23.743 billion, exceeding the forecast of 22.848 billion. The company raised its full-year adjusted EPS guidance to a range of 10.80 to 10.90, up from the previous range of 10.50 to 10.70. Additionally, it increased its sales guidance from 91 billion-91.8 billion to 93.2 billion-93.6 billion. A quarterly dividend of 1.30 per share was declared, payable on September 9, 2025, to shareholders of record as of August 26, 2025. Social media discussions highlighted these positive adjustments and noted a pre-market stock increase of approximately 1.5%. JNJ's market capitalization is around 373.35 billion, with a year-to-date gain of about 9.08%.
FHN | +2.3% | +268.4M
First Horizon Corp | Regional Banks
First Horizon Corp reported its Q2 adjusted earnings per share at 0.45, exceeding the analyst consensus estimate of 0.41 by nearly 10%. This represents a 25% increase from the previous year's Q2 figure of 0.36. The company’s net income for the quarter rose to 233 million, while quarterly sales reached 830 million, slightly below the expected 832.46 million but up 1.84% year-over-year. Average deposits increased to 64.7 billion, influenced by a rise in brokered deposits, with period-end deposits at 65.6 billion. The common equity tier 1 (CET1) ratio improved to 11%, reflecting operational strengths and strategic initiatives. In related market activity, Bank of America Corp saw a 1.56% increase following its strong Q2 results, which may correlate with First Horizon’s price movement.
MP | +4.8% | +488.8M
MP Materials Corp | Diversified Metals & Mining
MP Materials Corp's stock has increased, influenced by a significant upward movement in the Diversified Metals & Mining sector. This rise follows the announcement of a $500 million multiyear supply deal with Apple Inc., aimed at securing rare earth magnets and reducing reliance on Chinese sources. The agreement, made public on September 26, includes a $200 million prepayment from Apple and will bolster production at MP's upcoming facility in Fort Worth, Texas, utilizing recycled materials from its Mountain Pass site. Social media discussions have highlighted the stock's impressive rise due to this development, with mentions of potential future collaborations, including one with DTREF for raw rare earth elements processing. Analyst sentiment remains positive, with several upgrades to price targets, reflecting a consensus rating of "Moderate Buy."
BIDU | -3.7% | -9.2B
Baidu Inc | Interactive Media & Services
Baidu Inc. has experienced a notable decline of 3.7% in pre-market trading. This movement coincides with a recent report from Jefferies, which highlights Nvidia's H20 chip update as a positive development for the Chinese internet and AI sector. Baidu is among six companies identified as likely beneficiaries of this update, with Jefferies noting its solid growth momentum driven by strong demand for AI infrastructure. Additionally, Baidu's H shares had previously increased significantly following a partnership with Uber for a global robotaxi rollout. Social media discussions have also mentioned Baidu in the context of a broader rotation into Chinese stocks, alongside companies like Alibaba and NIO, reflecting optimism about potential gains. Despite this, the stock's current price movement appears to be downward.
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