Earnings Optimism Meets Rate Reality: Where Equities and Loans Diverge

Nuveen’s CIO Weekly Commentary (28 July 2025), led by CIO Saira Malik, assesses how resilient earnings, retail inflows, and tariff risks are shaping equity and fixed income positioning.

• Equity strength tested: S&P 500 earnings growth surpassed expectations at +6.4%, but technical momentum is stalling as trade deadline risks resurface and volatility looms.

• Retail flows surge: Over $50B in net retail buying helped lift markets, particularly in tech, where the "Magnificent 7" now comprise over one-third of S&P 500 market cap.

• Senior loans attractive: Yielding 6.5–8%, with low volatility and discount pricing, senior loans offer compelling risk-adjusted returns and protection from rate swings.

Where do income and risk-adjusted value align in today’s bifurcated market? The full commentary explores tactical shifts across equities and fixed income.