The S&P 500 Index ($SPX) (SPY) today is up +0.16%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.25%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.33%. September E-mini S&P futures (ESU25) are up +0.17%, and September E-mini Nasdaq futures (NQU25) are up +0.32%.
Stock indexes are mildly higher today, with the S&P 500 and Nasdaq 100 posting new all-time highs, and the Dow Jones Industrials posting a 4-1/4 month high. Positive trade news is boosting stocks today, with President Trump’s July 9 deadline fast approaching. Progress is being made in trade negotiations with China and the European Union. Also, trade talks are back on with Canada after the country withdrew a digital services tax, and India’s and Japan’s trade teams extended their stay in Washington to iron out new trade deals.
Stocks fell back from their best levels on weaker-than-expected US economic news, as indicated by the June MNI Chicago PMI and the June Dallas Fed manufacturing survey. Also, comments from Atlanta Fed President Bostic undercut stocks when he said tariffs may lead to more persistent upward pressure on inflation.
The Senate has begun consideration of the Republican reconciliation bill, with the dollar index sliding to a new 3-1/4-year low today, as the nonpartisan Congressional Budget Office estimates that the bill would add nearly $3.3 trillion to US deficits over the next decade.
M&A activity is also supportive for stocks after Home Depot announced it has acquired GMS Inc. for $4.3 billion and AbbVie agreed to buy Capstan Therapeutics for $2.1 billion.
The US June MNI Chicago PMI unexpectedly fell -0.1 to 40.4, weaker than expectations of an increase to 43.0 and the weakest level in 5 months.
The US June Dallas Fed manufacturing outlook survey rose +2.6 to -12.7, weaker than expectations of -10.0.
Atlanta Fed President Bostic was slightly hawkish when he stated that much of the tariff pricing hasn’t yet been reflected in the marketplace and that tariffs may cause an incremental impact on prices, leading to more persistent upward pressure on inflation. He projects one 25 bp rate cut this year and three rate cuts in 2026.
Comments from Treasury Secretary Bessent were supportive for longer-term bonds when he said that the time to issue more longer-term securities was when interest rates were lower in 2020, 2021, and 2022, which eased supply concerns on the long-end of the curve.
Better-than-expected economic news from China is supportive of global economic growth prospects. The China June manufacturing PMI rose +0.2 to 49.7, stronger than expectations of 49.6. Also, the June non-manufacturing PMI rose +0.2 to 50.5, stronger than expectations of no change at 50.3.
On the negative side for stocks is the upcoming earnings season, which begins next week. Bloomberg Intelligence data show that the consensus for Q2 earnings of S&P 500 companies is for a rise of 2.8% year-over-year, the smallest increase in two years. Also, only six of the 11 S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research.
During this holiday-shortened week, the markets will look for additional trade and tariff news along with progress in the passage of President Trump’s tax bill. On Tuesday, the June ISM manufacturing index is expected to climb by +0.2 to 48.7. Also, on Tuesday. May JOLTS job openings are expected to fall -91,000 to 7.3 million. Finally on Tuesday, Fed Chair Powell participates in a panel discussing monetary policy with BOE Governor Bailey, ECB President Lagarde, and BOJ Governor Ueda. On Wednesday, the June ADP employment change is expected to rise by +90,000. On Thursday, Jun nonfarm payrolls are expected to climb by +113,000 and the June employment rate is expected to tick up +0.1 to 4.3%. Also, June average hourly earnings are expected to rise +0.3% m/m and +3.8% y/y. In addition, weekly initial unemployment claims are expected to climb +5,000 to 241,000, and May factory orders are expected to jump +8.1% m/m. Finally, the Jun ISM services index is expected to climb +0.7 to 50.6.
Federal funds futures prices are discounting the chances at 19% for a -25 bp rate cut at the July 29-30 FOMC meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 fell from a 2-week high and is down -0.29%. China’s Shanghai Composite closed up +0.59%. Japan’s Nikkei Stock 225 rose to an 11-1/2 month high and closed up +0.84%.
Interest Rates
September 10-year T-notes (ZNU25) today are up by +2 ticks. The 10-year T-note yield is down -0.8 bp to 4.269%.
T-note prices are slightly higher today as positive trade news bolstered hopes for smaller-than-expected tariffs, which eased inflation concerns. Today’s weaker-than-expected Chicago PMI and Dallas Fed reports were also supportive for T-notes. In addition, comments from Treasury Secretary Bessent alleviated concern about supply pressure on the long-end of the Treasury curve.
However, T-notes fell back from their best levels as today’s rally in the S&P 500 to a new record high reduced safe-haven demand for government securities. Also, Atlanta Fed President Bostic said that tariffs may lead to more persistent upward pressure on inflation.
European government bond yields today are mixed. The 10-year German bund yield is up +0.1 bp to 2.593%. The 10-year UK gilt yield is down -1.5 bp to 4.489%.
German May retail sales unexpectedly fell -1.6% m/m, weaker than expectations of a +0.5% m/m increase and the biggest decline in more than 2-1/2 years.
The German June CPI (EU harmonized) rose +0.2% m/m and +1.7% y/y, weaker than expectations of +0.3% m/m and +1.8% y/y.
ECB Vice President Guindos said the Eurozone economy is stalling because of the “brutal uncertainty” surrounding global trade policy and that second and third quarter growth “will be almost flat.”
Swaps are discounting the chances at 7% for a -25 bp rate cut by the ECB at the July 24 policy meeting.
US Stock Movers
Bank stocks are climbing today after news last Friday that the largest US banks all passed the Fed’s annual stress test, which could prompt the banks to increase buybacks and dividends for shareholders. As a result, Goldman Sachs (GS) is up more than +2% to lead gainers in the Dow Jones Industrials. Also, JPMorgan Chase (JPM), Wells Fargo & Co (WFC), and Bank of America (BAC) are up more than +1%.
GMS Inc. (GMS) is up more than +11% after Home Depot agreed to buy the company for $4.3 billion or about $110 per share.
Hewlett-Packard Enterprise (HPE) is up more than +13% to lead gainers in the S&P 500, and Juniper Networks (JNPR) is up more than +8% after the Justice Department settled its lawsuit challenging HPE’s takeover of Juniper Networks.
AppLovin (APP) is up more than +7% to lead gainers in the Nasdaq 100 after UBS raised its price target on the stock to $540 from $475.
Oracle (ORCL) is up more than +5% after Stifel upgraded the stock to buy from hold with a price target of $250.
Whirlpool Corp (WHR) is up more than +4% after Longbow Research upgraded the stock to buy from neutral with a price target of $145.
Moderna (MRNA) is up more than +2% after saying its experimental flu shot met its goal in a late-stage trial.
Walt Disney Co (DIS) is up +0.90% after Jeffries upgraded the stock to buy from hold with a price target of $144.
Real estate investment trust companies (REITs) are under pressure today. Essex Property Trust (ESS) is down more than -2%, and Alexandria Real Estate Equities (ARE), Camden Property Trust (CPT), and AvalonBay Communities (AVB) are down more than -1%.
Cohen & Steers Inc. (CNS) is down more than -4% after Bank of America Global Research initiated coverage on the stock with a recommendation of underperform with a price target of $67.
Fortive (FTV) is down more than -4% after announcing the retirement of CEO and President Lico and saying that Olumide Soroye will replace him.
Zscaler (ZS) is down more than -1% after announcing it intends to offer $1.5 billion of convertible senior notes due 2028 in a private offering.
Earnings Reports (6/30/2025)
B Riley Financial Inc (RILY), Compass Diversified Holdings (CODI), Golden Matrix Group Inc (GMGI), Outdoor Holding Co (POWW), Progress Software Corp (PRGS).
