⚡️ Tesla Q2 Earnings

+ Trump, Japan Ink Major Trade Deal with 15% Auto Tariff and $550B U.S. Investment

July 23, 2025

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Good afternoon! On The Daily Show, billionaire owner Patrick Soon-Shiong announced plans to take the Los Angeles Times public, calling it a way to “democratize” the paper and give Americans a stake in its future though the reveal came amid questions about conflicts of interest with his biotech ventures.

Since buying the Times in 2018, Soon-Shiong has clashed with staff over editorial decisions and political endorsements, leading to cancellations and resignations—yet he frames the IPO as a chance to rebuild trust and transparency in journalism.

MARKETS

*Stock data as of market close*

  • Wall Street got a lift Wednesday as news of a U.S.-Japan trade dealand whispers of an EU pact nearing the finish line helped ease fears of a tariff flare-up. The S&P 500 notched a fresh all-time closing high at 6,309.62, suggesting investors are more than happy to trade uncertainty for diplomacy.

  • Despite the S&P’s record, the broader market closed mixed. The Nasdaq slipped 0.4% as traders treaded carefully ahead of Big Tech earnings, while the Dow gained the same amount. Even with General Motors dropping a tariff warning into its earnings call, optimism over trade talks kept sentiment buoyant.

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STOCKS
Winners & Losers

What’s up 📈

  • Lamb Weston sizzled 16.31% after crushing Q4 earnings and launching a $250M cost-saving plan through 2028. ($LW)

  • GE Vernova climbed 14.58% after beating expectations and raising full-year guidance, saying Trump’s tariffs will only mildly impact results. ($GEV)

  • Cal-Maine Foods jumped 13.80% after reporting strong profits, driven by high egg prices. ($CALM)

  • GoPro and Krispy Kreme rose 12.41% and 4.60%, respectively, as retail traders targeted them in the latest meme stock rally. Both stocks have high short interest and surged on WallStreetBets buzz. ($GPRO, $DNUT)

  • USANA Health Sciences popped 12.37% after beating earnings estimates for the quarter. ($USNA)

  • Lennox International gained 6.59% after raising its full-year earnings outlook. ($LII)

  • Nintendo rose 2.31% after announcing that its new Switch 2 console sold 1.6M units in June, making it the fastest-selling console in U.S. history. ($NTDOY)

What’s down 📉

  • Enphase Energy plunged 14.16% after issuing weak Q3 guidance, citing tariffs as a key margin pressure. ($ENPH)

  • Texas Instruments dropped 13.34% after releasing a disappointing Q3 forecast, despite topping Q2 expectations. ($TXN)

  • Fiserv sank 13.85% as its revised full-year revenue outlook missed expectations, overshadowing an earnings beat and acquisition news. ($FI)

  • Otis Worldwide fell 12.38% after the elevator maker cut its revenue forecast, blaming weak demand for new equipment. ($OTIS)

  • SAP lost 5.11% after the enterprise software firm missed Q2 revenue estimates. ($SAP)

  • Hilton Worldwide slipped 2.55% despite beating earnings and revenue expectations and raising full-year EPS guidance. ($HLT)

EARNINGS
Tesla Q2 Earnings Flat as EV Sales Drop, Robotaxi and Affordable Model Still Promised

Tesla’s second-quarter results were a mixed bag: earnings met expectations, but revenue fell 12% and net income dropped 16% as EV sales slumped. Auto revenue declined 16% year over year, with only 384,122 vehicles sold the company’s steepest delivery drop ever. Still, Elon Musk kept the spotlight on the future, emphasizing robotaxis, the Cybercab, and a “more affordable” EV model set for next year.

From Cars to Concepts: Tesla is leaning harder into the narrative that it’s not just a car company. Musk called this quarter a “seminal point” as Tesla pivots to robotics and AI. But investors got few concrete updates - just a promise of a broader robotaxi rollout and potential production of 100,000 Optimus robots per month within five years. For now, the Austin-based robotaxi service remains invite-only with a fleet of fewer than 20 cars.

Regulatory Credits and Red Ink

Tesla pulled in $435 million from selling carbon credits, but that lifeline is drying up. The company’s free cash flow cratered to $146 million, down 90% from last year. Meanwhile, capex spending was slashed, casting doubt on its lofty robotics ambitions. Musk admitted rough quarters may be ahead, especially with the loss of EV tax credits and waning consumer sentiment in key markets like California and Europe.

Bottom Line: Despite lackluster earnings and no new vehicle guidance, Tesla shares ticked up slightly as investors held onto hope in Musk’s futuristic pitches. But with core EV sales still making up nearly three-quarters of revenue and shrinking it’s getting harder to ignore the gap between Tesla’s vision and its reality.

NEWS
Market Movements

TRADE
Trump, Japan Ink Major Trade Deal with 15% Auto Tariff and $550B U.S. Investment

President Trump announced that the U.S. and Japan have agreed to a new baseline “reciprocal” tariff rate of 15 percent on all Japanese exports including cars and trucks down from the previous 25 percent for autos. In exchange, Japan will invest a staggering $550 billion in U.S. industries like pharmaceuticals and semiconductors, with America seeing roughly 90 percent of the profits.

Auto Industry Revved Up

Japanese automakers went into overdrive: Toyota surged nearly 14 percent, Honda climbed 13 percent, Mazda jumped 17 percent, and Mitsubishi rallied 13 percent. The Nikkei 225 also rallied more than 3 percent. U.S. automakers like GM, Ford, and Stellantis warned that the deal still leaves them with a 25 percent tariff hurdle, potentially tilting the playing field.

Rice and Reciprocity: President Trump emphasized that Japan will open its markets to U.S. rice and other agricultural goods. Japanese negotiator Ryosei Akazawa even posted #MissionAccomplished on X, while PM Ishiba praised the tariff deal as the lowest ever with a major U.S. trade partner.

Global Echoes

This deal sets a template for future agreements with Canada, the EU, South Korea, and others before Trump’s Aug. 1 deadline. Europe has warned of $100 billion in retaliatory tariffs if no deal is reached. Meanwhile, Japan is still working with the U.S. on steel and aluminum tariffs, which remain at 50 percent.

Why It Matters: This deal signals America’s shift toward more reciprocal, hardline trade terms. Japan secures better market access and capital outflows, U.S. automakers face fresh competition, and global trade dynamics are recalibrating as other countries scramble to strike similar deals under growing political pressure.

Calendar
On The Horizon

Tomorrow

Tomorrow’s economic calendar could rattle a few sectors, with fresh data on both jobless claims and new home sales. The housing figures come just a day after US home prices hit a new high though not all ZIP codes are created equal. Expect analysts to dig into which regions are driving the price spike and whether buyers are still biting or starting to bail.

IMAX reports before the bell, and expectations are sky-high, much like its ticket prices. The stock has soared over 60% in the past year thanks to booming demand for its premium movie format and savvy international expansion. But when you're priced for perfection, even a solid quarter can get punished. Wall Street is eyeing $0.17 in EPS on $92.2 million in revenue.

NEWS
The Daily Rundown

  • 🧁 Kellanova to Remove Artificial Dyes by 2028: Kellanova, the maker of Pop-Tarts, Pringles, and Eggo waffles, announced it will remove artificial dyes from all its products by 2028. The change aligns with consumer trends toward cleaner-label foods and natural ingredients. Reformulations will roll out gradually across snacks and breakfast items worldwide. The move follows similar efforts by other food giants responding to public health concerns.

  • 🏷️ Target Limits Price Match Policy: Target is changing its price match perk to only include prices from its own stores and website. Previously, the policy allowed matches from Amazon, Walmart, and other competitors. The change, which takes effect July 28, is aimed at simplifying operations and reducing price pressure. Some shoppers criticized the move as reducing Target’s competitive value.

  • 🏛️ Trump Administration Exits UNESCO Again: The Trump administration is pulling the U.S. out of the UN cultural agency UNESCO, two years after President Biden rejoined it. Officials cited political bias and a rejection of U.S. values as the reason for the exit. This marks the second withdrawal under Trump, echoing a similar move in 2017. UNESCO expressed regret but said its programs would continue with global support.

  • 📰 LA Times to Go Public Under Soon-Shiong: Patrick Soon-Shiong announced plans to take the Los Angeles Times public through a Regulation A IPO capped at $75 million. The decision comes after major newsroom layoffs and follows the creation of a new media-tech platform. Staff were reportedly blindsided by the announcement, which was made during a Daily Show appearance. Soon-Shiong will retain control after the public offering.

  • 🥤 Coca-Cola Launches Cane Sugar Version: Coca-Cola said it will launch a version of its flagship soda made with cane sugar instead of high-fructose corn syrup. The move follows a push from President Trump and RFK Jr. to reduce artificial ingredients in American products. The cane sugar version won’t replace the original but will be offered alongside it. Critics warn it could impact U.S. corn producers and soda prices.

  • 🍔 Tesla Diner Opens in West Hollywood: Tesla opened its first branded diner in West Hollywood, combining EV charging with a retro food experience. The location features 66-foot LED movie screens, a humanoid robot serving popcorn, and a menu with burgers and fries. Customers can eat while their cars charge in themed bays inspired by classic American diners. If successful, Tesla plans to expand the concept to more cities.

  • 🎸 Ozzy Osbourne Dies at 76: Legendary Black Sabbath frontman Ozzy Osbourne died at the age of 76 while surrounded by family. The heavy metal icon had been battling health issues including Parkinson’s disease in recent years. Osbourne’s death came just weeks after his farewell concert with Black Sabbath in England. Fans and fellow musicians paid tribute to his music and chaotic legacy.

  • 📺 South Park Signs $1.25B Streaming Deal: The creators of South Park signed a five-year, $1.25 billion global streaming deal with Paramount for the entire franchise. The contract includes new episodes and full control of distribution following years of legal wrangling. Season 27 premiered this week on Comedy Central and Paramount+. The deal comes after the company settled a legal dispute involving President Trump and the Skydance merger.

  • ⛓️ China Blocks U.S. Officials With Exit Bans: China has issued exit bans on a U.S. Commerce Department employee and a Wells Fargo executive amid growing diplomatic tensions. Both individuals were visiting the country and have been barred from leaving due to pending investigations. The U.S. government has condemned the move as coercive and opaque. Companies like BlackRock and Wells Fargo are now restricting employee travel to China.

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