Key Takeaways
- Major U.S. indices closed higher, with the Dow Jones, NASDAQ, and S&P 500 all posting gains, driven by continued AI hype and big tech performance.
- Visa (V) and Edison International (EIX) reported strong Q4 and Q3 earnings respectively, both exceeding analyst expectations for adjusted EPS and revenue, with Visa also boosting its dividend by 14%.
- Mondelez International (MDLZ) and Electronic Arts (EA) presented mixed results, with Mondelez beating revenue but missing on gross margin and lowering its full-year EPS outlook, while EA missed revenue estimates and ceased providing forward guidance.
- Nvidia (NVDA) faces a complete lockout from China's AI chip market, with its market share effectively at zero, prompting plans to increase U.S. chip packaging.
- Trump Media (DJT) announced a partnership with Crypto.com to launch prediction markets on Truth Social.
Market Performance Overview
U.S. equities extended their rally, with major indices closing higher, largely propelled by renewed enthusiasm for artificial intelligence and strong performance from big technology companies. The Dow Jones Index rose by 197.37 points, or 0.42%, to close at 47,741.96. The NASDAQ saw an improvement of 193.94 points, or 0.82%, finishing the day at 23,831.40, while the S&P 500 unofficially ended with an increase of 19.50 points, or 0.28%, settling at 6,894.66.
Market sentiment remains buoyed by expectations of Fed rate cuts, hopes for a thaw in U.S.-China relations, and substantial capital expenditure tailwinds in the AI sector. However, analysts are cautioning that valuations appear stretched, and a disappointing earnings report from one of the "Magnificent Seven" tech giants could significantly impact the market.
Earnings Highlights: Visa and Edison International Outperform
Visa (V) reported robust Q4 2025 earnings, surpassing analyst estimates across key metrics. The payments giant announced Q4 adjusted EPS of $2.98, slightly above the $2.97 estimate, and adjusted net income of $5.8 billion, exceeding the $5.76 billion estimate. Revenue also came in strong at $10.7 billion, topping the $10.614 billion consensus. The company's performance was driven by a 9% increase in payment volume, an 11% rise in cross-border volume (excluding Europe), and a 10% increase in processed transactions to 67.7 billion. Visa also announced a 14% increase in its quarterly cash dividend to $0.67 per share. The results included an $899 million litigation provision.
Edison International (EIX) delivered a strong Q3 2025 performance, beating core EPS estimates. The utility reported Q3 net income of $832 million and EPS of $2.16. Crucially, Q3 core EPS reached $2.34, significantly higher than the $2.18 estimate. The company's Q3 adjusted net income was $901 million, well above the Ibes estimate of $757.9 million. Edison International also reiterated its FY core EPS outlook of $5.95-$6.20 and expressed continued confidence in achieving 5-7% core EPS growth from 2025-2028.
Mixed Results for Mondelez and Electronic Arts
Mondelez International (MDLZ) presented a mixed Q3 2025 earnings report. The snack food giant reported Q3 EPS of $0.57 and net revenue of $9.74 billion, slightly beating the $9.7 billion estimate. However, the adjusted gross margin came in lower at 30.4%, compared to an expected 33.1%. Looking ahead, Mondelez now forecasts full-year organic net revenue growth to be above +4%, a slight reduction from its previous expectation of about +5%. The company also adjusted its full-year adjusted EPS outlook to be down near -15%, a more significant decline than its prior forecast of about -10%.
Electronic Arts (EA) reported its Q2 2025 earnings, with revenue falling short of expectations. The video game publisher posted Q2 revenue of $1.8 billion, missing the $1.88 billion estimate. Net income for the quarter was $137 million, resulting in EPS of $0.54. In a significant development, EA announced it will no longer provide forward-looking guidance, signaling a shift in its communication strategy with investors.
Nvidia's China Setback and Trump Media's New Venture
Nvidia (NVDA) faces a substantial challenge in the Chinese market, as the company stated it has been completely shut out of China’s AI chip market, with its market share now effectively zero. The company has not yet applied for licenses to ship its new Blackwell chips to China. In response to these geopolitical and market pressures, Nvidia plans to ramp up chip packaging in the U.S. soon, with TSMC also preparing for increased domestic production.
In other news, Trump Media (DJT) announced a new strategic partnership, revealing plans to launch prediction markets on Truth Social in collaboration with Crypto.com. This move marks a new venture for the social media platform into the burgeoning prediction market space.
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.