September S&P 500 E-Mini futures (ESU25) are down -0.21%, and September Nasdaq 100 E-Mini futures (NQU25) are down -0.29% this morning, taking a breather after a recent rally, as investors monitor progress on U.S. trade talks and wrangling in Washington over President Donald Trump’s tax-and-spending bill.
President Trump’s “big, beautiful bill” failed to pass the Senate on Monday. A final vote on the bill could come Tuesday, but first, Republicans will need to align on what the legislation would mean for Medicaid, tax cuts, green energy subsidies, and the widening budget deficit.
The approaching end of tariff “pauses” also looms large, with countries scrambling to finalize deals with the U.S. President Trump on Monday voiced frustration over U.S.-Japan trade negotiations, and U.S. Treasury Secretary Scott Bessent cautioned that countries could be notified of sharply higher tariffs despite good-faith negotiations.
Investor focus is also on the latest reading on U.S. job openings and manufacturing sector surveys, as well as remarks from Federal Reserve Chair Jerome Powell.
In yesterday’s trading session, Wall Street’s main stock indexes closed higher. Hewlett Packard Enterprise (HPE) surged over +11% and was the top percentage gainer on the S&P 500 after the Justice Department settled a lawsuit challenging the company’s $14 billion acquisition of Juniper Networks. Also, bank stocks gained ground after the largest U.S. lenders all passed the Fed’s annual stress test, which could prompt the banks to return more capital to shareholders, with Goldman Sachs (GS) rising more than +2% to lead gainers in the Dow and JPMorgan Chase (JPM) advancing about +1%. In addition, Strategy (MSTR) climbed more than +5% and was the top percentage gainer on the Nasdaq 100 after the company purchased an additional 4,980 Bitcoins last week. On the bearish side, Fortive (FTV) slid over -3% after the company announced the retirement of President, CEO, and Director James Lico, and named Olumide Soroye as his successor.
Economic data released on Monday showed that the U.S. Chicago PMI unexpectedly fell to 40.4 in June, weaker than expectations of 42.7.
Atlanta Fed President Raphael Bostic said on Monday that tariff-related price increases may unfold gradually rather than as a one-time surge, potentially leading to more persistent upward pressure on inflation. Bostic said he penciled in one interest rate cut for this year and three in 2026.
Meanwhile, U.S. rate futures have priced in a 78.8% chance of no rate change and a 21.2% chance of a 25 basis point rate cut at the next central bank meeting in July.
Today, investors will focus on remarks from Fed Chair Jerome Powell, who is set to discuss monetary policy at the European Central Bank’s annual forum in Sintra, Portugal. Mr. Powell will speak on a panel alongside his counterparts from the Eurozone, Japan, and the U.K.
On the economic data front, investors will monitor the U.S. JOLTs Job Openings figures for fresh insights into the health of the job market. Economists, on average, forecast that the May JOLTs Job Openings will come in at 7.320M, compared to the April figure of 7.391M.
The U.S. ISM Manufacturing PMI and the S&P Global Manufacturing PMI will also be closely watched today. Economists expect the June ISM Manufacturing PMI to be 48.8 and the S&P Global Manufacturing PMI to be 52.0, compared to the previous values of 48.5 and 52.0, respectively.
U.S. Construction Spending data will be released today as well. Economists foresee this figure coming in at -0.2% m/m in May, compared to -0.4% m/m in April.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.196%, down -0.14%.
The Euro Stoxx 50 Index is down -0.29% this morning as investors digested key inflation data from the region and kept an eye on trade negotiations with the U.S. Defense and media stocks slumped on Tuesday. At the same time, mining stocks outperformed. Preliminary data from Eurostat released on Tuesday showed that inflation in the Eurozone edged higher in June, hitting the European Central Bank’s target and boosting expectations that policymakers will hold the key interest rate steady later this month. Separately, a survey showed that Eurozone manufacturing activity continued to recover in June as new orders held steady for the first time in over three years, indicating a tentative stabilization. In addition, data showed that Germany’s unemployment rate held steady in June, but signs of a softening labor market persist amid ongoing economic uncertainty tied to trade and geopolitics. Meanwhile, the European Union’s top trade official, Maros Sefcovic, will travel to Washington this week for talks as Brussels officials rush to finalize a deal before a key deadline lapses next week. Bloomberg News reported on Monday that the EU is willing to accept a trade arrangement with the U.S. that includes a 10% universal tariff on many of the bloc’s exports, but seeks U.S. commitments to lower rates on key sectors, including pharmaceuticals, alcohol, semiconductors, and commercial aircraft. In other news, median consumer inflation expectations in the Eurozone declined to 2.8% in May, the lowest in three months, down from 3.1% in April. In corporate news, Zealand Pharma A/S (ZEAL.C.DX) rose over +3% after Exane BNP Paribas initiated coverage of the stock with an Outperform rating.
Germany’s Unemployment Change, Germany’s Unemployment Rate, Eurozone’s Manufacturing PMI, Eurozone’s CPI (preliminary), and Eurozone’s Core CPI (preliminary) data were released today.
The German June Unemployment Change came in at 11K, stronger than expectations of 18K.
The German June Unemployment Rate was 6.3%, stronger than expectations of 6.4%.
Eurozone’s June Manufacturing PMI stood at 49.5, stronger than expectations of 49.4.
Eurozone’s June CPI came in at +2.0% y/y, in line with expectations.
Eurozone’s June Core CPI arrived at +2.3% y/y, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.39%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.24%.
China’s Shanghai Composite Index closed higher today after a private survey showed the country’s factory activity returned to expansion. Healthcare stocks led the gains on Tuesday after Beijing announced measures to support the high-quality development of the country’s innovative pharmaceutical sector. Financial stocks also gained ground. Huatai Securities analysts said that financial stocks like insurance and state-owned banks remain the preferred core holdings as they provide short-term defensive value and could benefit from yuan appreciation over the medium term. Meanwhile, a private-sector survey released on Tuesday showed that China’s factory activity unexpectedly returned to expansion in June, as a temporary trade truce between Beijing and Washington helped ease some of the pressures on Chinese manufacturers. The improvement was supported by a rebound in supply and demand, with both manufacturing production and sales bouncing back into growth after a short-lived decline in the prior month, according to Caixin. However, with deflationary pressures persisting and the labor market under stress, analysts are debating whether officials will introduce new measures to support growth over the next three months. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said, “The Politburo meeting later this month will shed light on how the policymakers think about these macro issues.” Investors also look ahead to the upcoming half-year earnings season, beginning in July, to assess whether corporate fundamentals are showing signs of improvement.
The Chinese June Caixin Manufacturing PMI stood at 50.4, stronger than expectations of 49.2.
Japan’s Nikkei 225 Stock Index closed lower today, snapping a five-session winning streak as sentiment took a hit after U.S. President Donald Trump threatened to impose a fresh tariff level on the country. Electronics, automobile, and financial stocks led the declines on Tuesday. Uncertainty over U.S.-Japan trade talks led investors to take profits following the benchmark index’s recent sharp gains. President Trump pointed to what he described as Japan’s reluctance to accept U.S. rice exports. Earlier, Trump had described auto trade between the two countries as unfair and suggested maintaining 25% tariffs on cars. At the same time, Japan’s top trade negotiator, Ryosei Akazawa, said on Tuesday that Japan will not sacrifice the agricultural sector as part of its tariff negotiations with the U.S. Investors also digested the latest economic data from the country, which raised the prospect of Bank of Japan interest rate hikes and pushed the yen higher. A private-sector survey released on Tuesday showed that Japan’s manufacturing sector expanded in June for the first time in 13 months, driven by a rebound in output. Separately, the BOJ’s tankan survey showed that confidence among large Japanese manufacturers improved in the second quarter as companies stuck to their bullish long-term investment plans despite tariff worries. The data are likely to give BOJ Governor Kazuo Ueda confidence to keep the discussion of a potential rate hike on the table when his board convenes at the end of the month. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -1.38% to 24.25.
The Japanese June au Jibun Bank Manufacturing PMI came in at 50.1, weaker than expectations of 50.4.
The Japanese Tankan Large Manufacturers Index has been reported at 13 in the second quarter, stronger than expectations of 10.
The Japanese Tankan Large Non-Manufacturers Index came in at 34 in the second quarter, in line with expectations.
Pre-Market U.S. Stock Movers
Tesla (TSLA) slumped over -4% in pre-market trading after CEO Elon Musk slammed Trump’s tax bill as “utterly insane and destructive,” while the president suggested the Department of Government Efficiency should investigate government subsidies received by Musk’s companies.
Textron (TXT) fell more than -2% in pre-market trading after Goldman Sachs downgraded the stock to Neutral from Buy.
AeroVironment (AVAV) slid over -5% in pre-market trading after the defense tech firm announced plans to raise up to $1.35 billion through public offerings of stock and convertible debt.
C.H. Robinson Worldwide (CHRW) gained more than +1% in pre-market trading after Wolfe Research upgraded the stock to Outperform from Peer Perform with a $112 price target.
Wolfspeed (WOLF) jumped about +86% in pre-market trading after the company filed for a prepackaged Chapter 11 bankruptcy as part of a plan to restructure its debt.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - July 1st
Constellation Brands (STZ), MSC Industrial Direct (MSM), Greenbrier (GBX), TechTarget (TTGT).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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