The S&P 500 Index ($SPX) (SPY) Tuesday closed down -0.11%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.91%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.89%.  September E-mini S&P futures (ESU25) are down -0.12%, and September E-mini Nasdaq futures (NQU25) are down -0.91%. 

Inventory indexes on Tuesday settled blended, with the Dow Jones Industrials posting a 4-1/2 month excessive.  The S&P 500 and Nasdaq 100 moved decrease Tuesday and consolidated under Monday’s all-time highs.  Tesla closed down greater than -5% to guide expertise shares decrease and weigh on the general market after President Trump threatened to withdraw subsidies from Elon Musk’s corporations in response to Musk’s criticism of the Republican reconciliation invoice.  The markets are additionally monitoring progress on commerce talks forward of President Trump’s July 9 deadline, in addition to congressional wrangling over the passage of President Trump’s tax and spending invoice. 

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The Senate handed the Republican reconciliation invoice on Tuesday by a 51-50 vote.  The invoice now goes to the Home, the place will probably be voted on someday this week.  Speaker Johnson mentioned the Home “will work quickly” to go the invoice by July 4.  The reconciliation invoice has the debt ceiling hike that’s essential to avert a Treasury default when the Treasury runs out of borrowing authority someday between mid-August and late September.  The greenback index fell to a 3-1/3 yr low Tuesday because the nonpartisan Congressional Price range Workplace estimates that the invoice would add almost $3.3 trillion to US funds deficits over the following decade. 

Shares remained decrease Tuesday after the better-than-expected US ISM and JOLTS studies pushed bond yields larger and dampened expectations of imminent Fed charge cuts.  Additionally, Fed Chair Powell reiterated his wait-and-see stance on rates of interest as he expects tariffs to indicate up in inflation information over the approaching months.

The US June ISM manufacturing index rose +0.5 to 49.0, stronger than expectations of 48.8. Additionally, the June ISM costs paid sub-index rose +0.3 to 69.7, stronger than expectations of 69.5.

US Could JOLTS job openings unexpectedly rose +374,000 to a 6-month excessive of seven.769 million, exhibiting a stronger labor market than expectations of a decline to 7.300 million. 

Fed Chair Powell mentioned he expects the impacts of tariffs to indicate up in inflation information over the approaching months, however the impression may very well be “higher or lower, or later or sooner than we expected.”

Higher-than-expected manufacturing information from China is supportive of worldwide financial progress prospects.  The China June Caixin manufacturing PMI rose +2.1 to 50.4, stronger than expectations of 49.3. 

On the unfavorable aspect for shares is the upcoming earnings season, which begins subsequent week. Bloomberg Intelligence information present that the consensus for Q2 earnings of S&P 500 corporations is for an increase of +2.8% year-over-year, the smallest enhance in two years.  Additionally, solely six of the 11 S&P 500 sectors are projected to put up a rise in earnings, the fewest since Q1 of 2023, in response to Yardeni Analysis.

Throughout this holiday-shortened week, the markets will search for further commerce and tariff information together with progress within the passage of President Trump’s tax invoice.  On Wednesday, the June ADP employment change is anticipated to rise by +90,000.  On Thursday, Jun nonfarm payrolls are anticipated to climb by +113,000, and the June employment charge is anticipated to tick up +0.1 to 4.3%.  Additionally, June common hourly earnings are anticipated to rise +0.3% m/m and +3.8% y/y.  As well as, weekly preliminary unemployment claims are anticipated to climb +5,000 to 241,000, and Could manufacturing unit orders are anticipated to leap +8.1% m/m.  Lastly, the Jun ISM providers index is anticipated to climb +0.7 to 50.6. 

Federal funds futures costs are discounting the possibilities at 21% for a -25 bp charge reduce on the July 29-30 FOMC assembly.

Abroad inventory markets on Tuesday settled blended.  The Euro Stoxx 50 closed down -0.39%.  China’s Shanghai Composite closed up +0.39%.  Japan’s Nikkei Inventory 225 closed down -1.24%.

Curiosity Charges

September 10-year T-notes (ZNU25) Tuesday closed down by -8.5 ticks.  The ten-year T-note yield rose +2.0 bp to 4.248%.  Sep T-notes fell from a 2-month excessive Tuesday and turned decrease, and the 10-year T-note yield rebounded from a 2-month low of 4.185% and turned larger. 

Hypothesis that Congress is near passing President Trump’s tax and spending invoice has sparked some weak point in T-note costs.  The Congressional Price range Workplace estimates that the invoice would add almost $3.3 trillion to US deficits over the following decade, which might increase Treasury safety gross sales to fund the deficits.  Losses in T-notes accelerated Tuesday after the stronger-than-expected ISM and JOLTS studies had been hawkish for Fed coverage.

T-note costs initially moved larger on Tuesday on account of carryover help from energy in European authorities bonds.  T-notes had been additionally boosted as optimistic commerce information has bolstered hopes for smaller-than-expected tariffs, which might soften the inflation outlook. 

European authorities bond yields on Tuesday moved decrease.  The ten-year German bund yield fell -3.3 bp to 2.574%.  The ten-year UK gilt yield dropped to an 8-week low of 4.417% and completed down -3.5 bp to 4.454%.

The Eurozone June CPI edged as much as +2.0% y/y from +1.9% y/y in Could, proper on expectations. The June core CPI was unchanged from Could at +2.3% y/y, proper on expectations.

The ECB Could 1-year CPI inflation expectations unexpectedly eased to +2.8% from +3.1% in Apr, versus expectations of no change at +3.1%.  The Could 3-year CPI expectations unexpectedly eased to +2.4% from +2.5% in Apr versus expectations of no change at +2.5%.

The Eurozone June manufacturing PMI was revised upward by +0.1 to 49.5 from the beforehand reported 49.4. 

The German June unemployment change rose +11,000, exhibiting a stronger labor market than expectations of +15,000.  The Jun unemployment charge was unchanged at 6.3%, exhibiting a stronger labor market than expectations of a rise to six.4%.

ECB Governing Council member Kazaks mentioned, “If the euro were to significantly appreciate further, it could weigh down on inflation and exports, which could tilt the balance toward another ECB interest rate cut.”

Swaps are discounting the possibilities at 6% for a -25 bp charge reduce by the ECB on the July 24 coverage assembly.

US Inventory Movers

Tesla (TSLA) closed down greater than -5% as President Trump threatened to withdraw authorities subsidies from Elon Musk’s corporations after Musk criticized the Republicans’ reconciliation invoice.  Analysts estimate that modifications to regulatory credit may threaten as much as 40% of Tesla’s earnings.

Weak point in chip shares is a unfavorable issue for the general market.  Superior Micro Gadgets (AMD) closed down greater than -4%, and Broadcom (AVGO) and ARM Holdings Plc (ARM) closed down greater than -3%.  Additionally, Nvidia (NVDA) closed down greater than -2% to guide losers within the Dow Jones Industrials.  As well as, Marvell Know-how (MRVL), Micron Know-how (MU), and ASML Holding NV (ASML) closed down greater than -1%.

Makers of glucose screens and insulin pumps retreated Tuesday after the US authorities proposed a fee scheduling change for diabetes units in addition to a aggressive bidding program.  Because of this, Tandem Diabetes Care (TNDM) closed down greater than -7%, and Insulet (PODD) and Dexcom (DXCM) closed down greater than -4%.

Warner Bros Discovery (WBD) closed down greater than -4% after holder Advance/Newhouse deliberate to promote as a lot as $1.1 billion of its holdings in WBD through an in a single day unregistered block commerce.

AeroVironment (AVAV) closed down greater than -11% after asserting plans to promote $750 million value of shares of its frequent inventory in an underwritten public providing and $600 million of mixture convertible senior notes due 2020. 

Dyne Therapeutics (DYN) closed down greater than -8% after providing 24.2 million shares of its frequent inventory in an underwritten public providing at a worth of $8.25 per share, under Monday’s closing worth of $9.52.

Sweetgreen Inc (SG) closed down greater than -2% after TD Cowen downgraded the inventory to carry from purchase.

US-listed Macau on line casino operators rallied Tuesday after Macau’s month-to-month gaming income rose +19% y/y in June, above expectations of a +9.4% y/y acquire.  Because of this, Las Vegas Sands (LVS) closed up greater than +8% to guide gainers within the S&P 500.  Additionally, Wynn Resorts Ltd. (WYNN) closed up greater than +8% and MGM Resorts Worldwide (MGM) closed up greater than +7%. 

Packaging Company of America (PKG) closed up greater than +7% after the corporate acquired Greif Containerboard for $1.8 billion, and Barclays mentioned the acquisition will enhance PKG’s capability to six.0 MMT, holding its place because the third-largest containerboard maker within the US. 

Ryder System (R) closed up greater than +6% after Wolfe Analysis upgraded the inventory to outperform from peer carry out with a worth goal of $183. 

Hasbro (HAS) closed up greater than +4% after Goldman Sachs upgraded the inventory to purchase from impartial with a worth goal of $85.

Nike (NKE) closed up greater than +3% after Argus Analysis upgraded the inventory to purchase from maintain with a worth goal of $85.

CH Robinson Worldwide (CHRW) closed up greater than +2% after Wolfe Analysis upgraded the inventory to outperform from peer carry out with a worth goal of $112. 

Commerce Desk (TTD) closed up greater than +2% after Citibank raised its worth goal on the inventory to $90 from $82. 

Earnings Studies (7/2/2025)

Franklin Covey Co (FC), UniFirst Corp/MA (UNF).

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