The stock market sees only blue skies as equities shrugged off fears of tariffs, consumer spending and inflation in July, leading the Sportico Sports Stock Index to advance nearly 2% in the month, reaching its highest level since late 2021.
The index closed July at 1,522 after touching a peak of 1,573 last week, its highest mark since December 2021. The strength reflected confidence throughout the stock market, which saw the tech-heavy Nasdaq Composite index rally nearly 4% and the S&P 500 gain more than 2%.
“Boom times are back—at least for now—as GDP is running at 3%, unemployment is low and inflation remains in check,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management, which manages about $750 million. “As with so many things in the economy, the situation is very fluid, and we have yet to see the full impact of tariffs flowing through to inflation.”
Among the 40-stock Sportico sports index, gains were concentrated in a handful of top performers, led by Rush Street Interactive (RSI). The casino and sportsbook operator leapt 26% Thursday to finish July at $20.20, its highest level since the end of 2021. Rush Street is seeing a lot of traction with its BetRivers online platform, especially with the ability of players at virtual poker tables to also be able to concurrently bet on sports and play casino games.
“Ongoing enhancements across both iCasino and Online Sports Betting platforms are fueling deeper user engagement,” wrote Jefferies analyst David Katz in a note Thursday. “Improvement in parlay and prop bet offerings are contributing to higher bet frequency and retention.”
Along with Rush Street, two other components of the index rallied more than 10% in July. Despite little news, TopGolf Callaway Brands (MODG) gained 15%, as interest on social media and chatboards seems to be rising as retail investors anticipate the spinoff of TopGolf from the equipment-making arm. Rogers Communications (RCI) advanced 13% in the month, as management sounded a bullish note on revenue from the Toronto Blue Jays and on the acquisition of the majority of Maple Leaf Sports and Entertainment and potential value creation it sees down the line. Earlier in July, CEO Tony Staffieri told Sportico: “There are a number of alternatives available to us. Whether it’s private investors, some type of IPO or some type of spin-out.” He also told investors last week the company expects to eventually merge the MLSE and Blue Jays divisions and find cost efficiencies as well.
Overall, the Sportico Sports Stock Index saw half its components rise in July with half losing ground. Ferrari (RACE) lost 11% in the month thanks to a plunge Thursday after announcing earnings. While the company reported benefits from lower costs and better performance with its Formula 1 team, slowing sales of its luxury cars spooked investors, even as management said the lowering of Trump tariffs on its cars from 27.5% to 15% would allow them to lower prices in the U.S. as less-taxed vehicles arrive stateside. Ferrari shares lost 10% on the day, their worst showing since the company debuted on the stock market nine years ago.
Vivid Seats (SEAT) was the other sports stock to lose 10% of its value in the month. Vivid continues to struggle under expectations that its revenue will decline 16% in 2025, according to data compiled by S&P Global Market Intelligence. Its shares closed July at $1.51, close to its all-time low.
The Sportico Sports Stock Index is a basket of 40 stocks that rely on sports for a significant portion of future growth. The index includes sports teams and leagues such as Manchester United (MANU, down 1%) sneaker makers including On Holding (ONON, down 7%) and media companies such as Paramount (PARA, down 4%). The index is equal weighted, meaning each stock starts off as 2.5% the value of the overall benchmark. Every three months the components are reset to 2.5% weighting with stocks dropped and added as needed at those times. To be included in the index, stocks must be traded in the U.S. with sufficient daily volume and a market capitalization greater than $50 million.
The index was launched in August 2020 at 1,000, meaning it is up 52% since. The index peaked at 1,763 in October 2021.
