The S&P 500 Index ($SPX) (SPY) Monday closed up +0.14%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.20%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.33%. September E-mini S&P futures (ESU25) are up +0.14%, and September E-mini Nasdaq futures (NQU25) are up +0.30%.
Stock indexes on Monday recovered from early losses and settled higher. Short covering emerged in stocks Monday on comments from President Trump, who said he is open to more trade negotiations, including with the European Union.
Stocks initially moved lower on Monday after President Trump ramped up tariff threats against US trading partners. Over the weekend, President Trump said the US will impose 30% tariffs on US imports from the European Union and Mexico, beginning August 1. That was a follow-up to President Trump’s announcement last Thursday that a 35% tariff on some Canadian products would take effect on August 1, up from the current 25%.
Stocks have been undercut as President Trump vowed to push forward with his aggressive tariff regime, stressing he would not offer additional extensions on country-specific tariffs set to take effect on August 1. Last week, Mr. Trump imposed a 50% tariff on copper imports that will include semi-finished goods and said that drug companies could face tariffs as high as 200% on imports if they don’t relocate production to the US within the next year. In addition, despite stating that the US was close to a trade deal with India, Mr. Trump said he would still impose a 10% tariff on India’s goods for their participation in BRICS, a group of developing nations he claimed were “set up to hurt” the US.
Hawkish comments Monday from Cleveland Fed President Beth Hammack weighed on stocks and bonds when she said she wants to see inflation lowered further before she’d support cutting interest rates. She said, “We’re not there yet on the inflation side of the Fed’s mandate, and I think it’s important that we wait and see how all the new policies that have been put forward are going to impact inflation.”
Monday’s trade news from China was better than expected, a positive factor for global economic growth and stocks. China June exports rose +5.8% y/y, stronger than expectations of +5.0% y/y. Also, June imports rose +1.1% y/y, stronger than expectations of +0.3% y/y.
The price of Bitcoin (^BTSUSD) continues to soar and rose by more than +1% Monday to a new record high as the US House prepares to consider legislation this week that would advance President Trump’s crypto-friendly agenda. The US House Committee on Financial Services said this week will be “Crypto Week.” The US House Committee on Ways and Means has planned an oversight subcommittee hearing on July 16 entitled, “Making America the Crypto Capital of the World,” which may lead to more crypto-friendly regulations.
The markets this week will focus on any fresh news on tariffs or trade deals. On Tuesday, the US June CPI is expected to strengthen to +1.9% y/y from +1.7% y/y in May, and the June core CPI is expected to strengthen to +2.9% y/y from +2.8% y/y in May. On Wednesday, June PPI final demand is expected to ease to +2.5% y/y from +2.6% in May, and June core PPI is expected to ease to +2.7% y/y from +3.0% y/y in May. Also, on Wednesday, June manufacturing production is expected to fall by -0.1% m/m. Finally, on Wednesday, the Fed will release its Beige Book. On Thursday, June retail sales are expected to climb by +0.1% m/m and +0.3% ex-autos, and weekly initial unemployment claims are expected to climb by +7,000 to 234,000. Also, on Thursday, the July Philadelphia Fed business outlook survey is expected to climb +3.0 points to -1.0, and the July NAHB housing market index is expected to rise +1 to 33. On Friday, June housing starts are expected to climb +3.3% m/m to 1.298 million, and June building permits are expected to slip -0.6% m/m to 1.386 million. Also, the University of Michigan’s US July consumer sentiment index is expected to climb +0.8 to 61.5.
Another hurdle for stocks is the upcoming earnings season, which begins in earnest this week with the release of big bank earnings results. 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 eleven S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research.
Federal funds futures prices are discounting the chances at 5% for a -25 bp rate cut at the July 29-30 FOMC meeting.
Overseas stock markets on Monday settled mixed. The Euro Stoxx 50 closed down -0.23%. China’s Shanghai Composite closed up +0.27%. Japan’s Nikkei Stock 225 closed down -0.28%.
Interest Rates
September 10-year T-notes (ZNU25) Monday closed up by +1.5 ticks. The 10-year T-note yield rose by +1.6 bp to 4.425%. T-note prices on Monday recovered from early losses and settled little changed after a -2% plunge in WTI crude oil prices sparked short-covering in T-notes.
T-notes initially moved lower Monday, with Sep T-notes posting a 3-week low, and the 10-year T-note yield climbing to a 3.5-week high of 4.443%. T-notes came under pressure after President Trump said over the weekend that the US will impose 30% tariffs on goods from the European Union and Mexico, beginning August 1, which could boost inflation and prevent the Fed from cutting interest rates. Rising US inflation expectations also weighed on T-notes as the 10-year breakeven inflation rate rose to a 3.5-month high Monday of 2.405%.
T-note prices were also undercut by hawkish comments from Cleveland Fed President Beth Hammack, who said she wants to see inflation lowered further before she’d support cutting interest rates. Finally, negative carryover from a slide in 10-year German bunds to a 3.5-month low on Monday was bearish for T-notes.
European government bond yields on Monday were mixed. The 10-year German bund yield rose to a 3.5-month high of 2.739% and finished up +0.4 bp at 2.729%. The 10-year UK gilt yield fell -2.2 bp to 4.600%.
Swaps are discounting the chances at 2% for a -25 bp rate cut by the ECB at the July 24 policy meeting.
US Stock Movers
The weakness in semiconductor chip stocks limited gains in the broader market. Micron Technology (MU) closed down more than -4% to lead losers in the Nasdaq 100. Also, GlobalFoundries (GFS), Lam Research (LRCX), and Qualcomm (QCOM) closed down more than -2%. In addition, ARM Holdings Plc (ARM), NXP Semiconductors NV (NXPI), and ON Semiconductor Corp (ON) closed down more than -1%.
Energy producers and energy service providers are sliding today after WTI crude prices tumbled more than -2%. Haliburton (HAL) closed down more than -4% and APA Corp (APA) closed down more than -3%. Also, Occidental Petroleum (OXY), Schlumberger (SLB), Marathon Petroleum (MPC), Baker Hughes (BKR), Phillips 66 (PSX), and Valero Energy (VLO) closed down more than -2%. In addition, Chevron (CVX) closed down more than -2% to lead losers in the Dow Jones Industrials.
Cryptocurrency-exposed stocks moved higher after the price of Bitcoin (^BTCUSD) rose more than +1% to a new record high. MicroStrategy (MSTR) closed up more than +3%, Coinbase Global (COIN) closed up more than +1%, and Riot Platforms (RIOT) closed up nearly 1%.
Nebius Group NV (NBIS) closed up more than +17% after Goldman Sachs initiated coverage of the stock with a recommendation of buy and a price target of $68.
AppLovin (APP) closed up more than +5% to lead gainers in the Nasdaq 100 after Citigroup said the stock remains a “Top Pick” and it expects the 2025 results to fall at the high end of the company’s revenue and adjusted Ebitda forecasts.
Autodesk (ADSK) closed up more than +5% after it said it is allocating its capital to organic investment, targeted and tuck-in acquisitions, and continuing its share repurchase program as its free cash flow grows.
Fastenal (FAST) closed up more than +4% after reporting Q2 net sales of $2.08 billion, better than the consensus of $2.07 billion.
Gen Digital (GEN) closed up more than +1% after B Riley Securities initiated coverage on the stock with a recommendation of buy and a price target of $46.
Visteon Corp (VC) closed up more than +3% after UBS upgraded the stock to buy from neutral with a price target of $142.
Boeing (BA) closed up by more than +1% to lead gainers in the Dow Jones Industrials after investigators, in a preliminary report on last month’s Air India crash, said there was no evidence found that would require them to take action over the aircraft or its engines.
Waters (WAT) closed down more than -13% to lead losers in the S&P 500 after the company said it will combine a Reverse Morris Trust transaction valued at about $17.5 billion with Becton’s Biosciences & Diagnostic Solutions, in which Waters will assume about $4 billion of incremental debt.
Procter & Gamble (PG) closed down more than -2% after Evercore ISI downgraded the stock to in line from outperform.
Best Buy (BBY) closed down more than -1% after Piper Sandler downgraded the stock to neutral from overweight.
Starbucks (SBUX) closed down more than -1% after Melius Research LLC initiated coverage on the stock with a recommendation of sell and a price target of $80.
Intapp (INTA) closed down more than -1% after Barclays downgraded the stock to underweight from equal weight with a price target of $44.
Earnings Reports (7/15/2025)
Albertsons Cos Inc (ACI), Bank of New York Mellon Corp/The (BK), Blackrock Inc (BLK), Citigroup Inc (C), JB Hunt Transport Services Inc (JBHT), JPMorgan Chase & Co (JPM), Omnicom Group Inc (OMC), Pinnacle Financial Partners In (PNFP), State Street Corp (STT), Sun Communities Inc (SUI), Wells Fargo & Co (WFC).
