Key Takeaways
- The Bank of England cut its key interest rate by 25 basis points to 4.0%, marking the fifth reduction in a year, amidst a finely balanced decision and rising inflation forecasts.
- US Treasury Secretary Scott Bessent stated that trade deals are "largely done" and emphasized that the current period is not the biggest trade reset since 1935, citing the "China trade shock" as more significant.
- President Trump instructed the Department of Commerce to begin work on a new census, explicitly stating that people in the U.S. illegally will not be counted.
- ConocoPhillips (COP) reported Q2 2025 adjusted EPS of $1.42, exceeding analyst estimates, driven by strong production and successful integration of Marathon Oil assets.
- Warner Bros. Discovery (WBD) posted Q2 2025 revenue of $9.81 billion and a net income of $1.58 billion, significantly outperforming analyst expectations for EPS.
Monetary Policy: Bank of England Cuts Rates Amid Inflationary Pressures
The Bank of England (BoE) has reduced its benchmark interest rate by 25 basis points to 4.0%, the fifth such cut in the past year. The decision, made by a 5-4 majority within the Monetary Policy Committee (MPC), was described as "finely balanced" by Governor Andrew Bailey. The BoE anticipates that CPI inflation will rise slightly further, peaking at 4.0% in September 2025, a higher forecast than the previous 3.7% estimate. This increase is attributed to near-term upward pressure from energy, food, and services prices.
Despite the rate cut, the BoE reiterated its guidance for a gradual and careful approach to future policy adjustments, emphasizing that monetary policy is not on a pre-set path. Underlying GDP growth remains subdued, and slack has emerged in the labor market, with unemployment rising to 4.7% in the three months to May.
US Trade and Manufacturing Outlook
US Treasury Secretary Scott Bessent indicated that "trade deals are largely done," suggesting significant progress in ongoing negotiations. Speaking on MSNBC, Bessent clarified that he does not view the current period as the biggest trade re-set since 1935, instead pointing to the China Trade Shock as a more impactful historical event. He also reported that U.S. manufacturing has moved overseas due to increased regulation.
In a notable development, Micron Technologies was visiting the US this week and is projected to "put in" $200 billion in investment, signaling a substantial commitment to domestic industry.
Trump Administration's Census Directive
President Trump has instructed the Department of Commerce to immediately begin work on a new and highly accurate census. A key directive from the President states that people in the U.S. illegally will not be counted in this census. This move follows previous attempts by the Trump administration to exclude undocumented immigrants from the census count for congressional apportionment purposes, which faced legal challenges.
Corporate Earnings: Energy, Media, and Diversified Holdings
ConocoPhillips (COP) announced strong Q2 2025 earnings, with adjusted EPS of $1.42, surpassing analyst estimates of $1.34. The energy giant reported adjusted net income of $1.8 billion and cash flow from operations of $3.49 billion. Production reached 2,391 million barrels of oil equivalent per day (BOE/D). The company also increased its disposition target to $5 billion by year-end 2026 and declared a Q3 ordinary dividend of $0.78 per share.
Warner Bros. Discovery (WBD) reported Q2 2025 revenue of $9.81 billion, meeting estimates, and a total of 125.7 million subscribers, exceeding expectations. The company posted a net income of $1.58 billion, a significant turnaround from a loss in the prior year, and EPS of $0.63, outperforming analyst estimates. Studios revenue reached $3.80 billion.
Brookfield Corporation (BN, BAM) reported boosted Q2 2025 earnings, with distributable earnings before realizations rising to $1.3 billion ($0.80 per share). The company also announced a three-for-two stock split. Total net income for the quarter was $1.1 billion.
Pharmaceutical and Technology Updates
Eli Lilly (LLY) CEO David Ricks stated that he has not seen safety concerns for their oral weight loss drug during clinical trials, and expressed no disappointment with the trial results. This comes after earlier reports of a 12.5% drop in LLY stock due to "disappointing results" from the oral GLP-1 Orforglipron weight loss trial, despite the company beating EPS and revenue estimates and lifting its full-year view.
In other technology news, Apple (AAPL) has pledged another $100 billion investment in the US. Sony (SONY) saw its stock rise by 4.5% after raising its earnings outlook. Sony raised its full-year operating profit forecast to ¥1.33 trillion ($9 billion), citing a diminished impact from U.S. President Donald Trump's trade war.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.