Bulls Battle Back After New Tariff Threats

The S&P 500 Index ($SPX) (SPY) today is up +0.15%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.09%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.43%.  September E-mini S&P futures (ESU25) are up +0.17%, and September E-mini Nasdaq futures (NQU25) are up +0.42%. 

Stock indexes today are off their lows of the session 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 today 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."

Trade news from China was better than expected, a positive factor for global economic growth. 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 is up by more than +2% today at 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 today are mixed.   The Euro Stoxx 50 is down -0.44%.  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) today are down by -2 ticks.  The 10-year T-note yield is up by +2.2 bp to 4.432%.  T-note prices are 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 are also weighing on T-notes as the 10-year breakeven inflation rate today rose to a 3.5-month high of 2.398%.

T-note prices are also being 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 today is bearish for T-notes.

European government bond yields today are mixed.  The 10-year German bund yield rose to a 3.5-month high of 2.739% and is up +0.7 bp at 2.732%. The 10-year UK gilt yield is down -1.7 bp to 4.605%.

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 is weighing on the broader market.  Micron Technology (MU) is down more than -4% to lead losers in the Nasdaq 100.  Also, ARM Holdings Plc (ARM), Qualcomm (QCOM), and NXP Semiconductors NV (NXPI) are down more than -2%.  In addition, GlobalFoundries (GFS), Lam Research (LRCX), Marvell Technology (MRVL), Microchip Technology (MCHP), Advanced Micro Devices (AMD), Intel (INTC), and Texas Instruments (TXN) are down more than -1%. 

Energy producers and energy service providers are sliding today after WTI crude prices fell from a 3-week high and turned lower.  Haliburton (HAL) is down more than -4% and APA Corp (APA) is down more than -3%.  Also, Occidental Petroleum (OXY), Schlumberger (SLB), Marathon Petroleum (MPC), Diamondback Energy (FANG), and Valero Energy (VLO) are down more than -2%.

Cryptocurrency-exposed stocks are moving higher with the price of Bitcoin (^BTCUSD) up more than +2% to a new record high.  MARA Holdings (MARA) is up more than +6%, Riot Platforms (RIOT) and MicroStrategy (MSTR) are up more than +3%, and Coinbase Global (COIN) is up more than +1%.

Waters (WAT) is 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) is down more than -2% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to in line from outperform.

Best Buy (BBY) is down more than -2% after Piper Sandler downgraded the stock to neutral from overweight.

Starbucks (SBUX) is down more than -2% after Melius Research LLC initiated coverage on the stock with a recommendation of sell and a price target of $80. 

Intapp (INTA) is down more than -1% after Barclays downgraded the stock to underweight from equal weight with a price target of $44.

Nebius Group NV (NBIS) is up more than +10% after Goldman Sachs initiated coverage of the stock with a recommendation of buy and a price target of $68. 

Fastenal (FAST) is up more than +4% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q2 net sales of $2.08 billion, better than the consensus of $2.07 billion.

Autodesk (ADSK) is up more than +4% to lead gainers in the S&P 500 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.

Gen Digital (GEN) is up more than +2% after B Riley Securities initiated coverage on the stock with a recommendation of buy and a price target of $46.

Global Payments (GPN) is up by more than +1% after TD Cowen upgraded the stock to buy from hold with a price target of $84. 

Visteon Corp (VC) is up more than +1% after UBS upgraded the stock to buy from neutral with a price target of $142.   

Earnings Reports (7/14/2025)

Equity Bancshares Inc (EQBK), Fastenal Co (FAST), FB Financial Corp (FBK), Immersion Corp (IMMR), Kestra Medical Technologies Ltd (KMTS), Rezolve AI PLC (RZLV), Simulations Plus Inc (SLP).