Back on the Brink: Markets Eye Tariff Risk 07/07/2025

HOT stories for today


 

US market wrap:

• US markets had a strong finish on Thursday’s short session ahead of Independence Day, with all major indexes reaching fresh all-time highs. The S&P 500 rose by 0.79%, the Nasdaq 100 increased by 0.98%, and the Dow Jones climbed by 0.76%. This momentum was driven by stronger-than-expected payroll numbers for June, a steady unemployment rate of 4.1%, and optimism surrounding the upcoming earnings season. Additionally, a preliminary trade agreement with Vietnam boosted investor sentiment, though the White House later clarified that final tariff figures are still under discussion.
• Adding to trade tensions, President Trump announced Sunday a new 10% tariff on countries “aligning themselves with the anti-American policies of BRICS,” though he did not elaborate. This came as BRICS leaders convened in Brazil for a key summit. Earlier the same day, Treasury Secretary Scott Bessent confirmed that tariffs introduced in April will be enforced starting August 1 for nations that haven’t reached a deal with the U.S. 

Mini Stagflation ahead? Roubini issues 2025 warning

• Economist Nouriel Roubini warns a “mini stagflationary shock” could emerge in H2 2025 as U.S. growth slows and inflation stays sticky. Thursday’s nonfarm payrolls beat expectations, but deeper data shows cracks: ADP payrolls fell by 33,000, and wage growth cooled. 
• Political heat is rising: President Trump renewed attacks on Fed Chair Powell, demanding emergency rate cuts to 1% and suggesting he may appoint a “shadow chair” ahead of 2026. Despite softer inflation and a resilient consumer, markets remain vulnerable to geopolitical flare-ups, resurgent oil prices, and delayed Fed action. Roubini highlights similarities to 1970s-style stagflation, characterized by sticky inflation and slowing momentum, which creates a volatile mix. Investors will now watch July CPI and Q2 earnings to test market resilience.

Stocks on the move:

• Tesla (TSLA): Fell 2.6% after Q2 delivery data missed expectations, stoking demand concerns.
• Centene (CNC): Gained 3.1% as JPMorgan reaffirmed bullish guidance tied to Medicaid margins.
• Nike (NKE): Slipped 2.1% as analysts flagged China demand softness and inventory pressure.
• Datadog (DDOG): Jumped 15% after its inclusion in the S&P 500 was confirmed.
• BitMine (BTM): Soared 130% on investor enthusiasm over its Ethereum treasury strategy.

Watchlist: TSLA, META, AMZN, NVDA, AMD, PLTR, DDOG, NKE

Today’s action

• Japan’s Nikkei 225 slipped 0.53% on Monday, weighed down by losses in tech and machinery stocks, while Hong Kong’s Hang Seng dropped 0.61% amid renewed weakness in Chinese internet giants. South Korea’s Kospi managed a 0.19% gain, supported by semiconductor strength, and Australia’s ASX 200 edged down 0.11% as miners pulled back. Investors across the region treaded cautiously after U.S. President Trump reaffirmed that reciprocal tariffs will begin August 1 and floated an additional 10% levy on BRICS-aligned nations, injecting fresh geopolitical uncertainty.
• U.S. stock futures dipped slightly in early trade, with S&P 500 and Nasdaq 100 contracts down modestly after Thursday’s strong close. Investors continue to weigh solid jobs data against rising political tensions while also bracing for this week’s key CPI release and the kickoff of earnings season. Major banks, including JPMorgan, Wells Fargo, and Citigroup, are slated to report on Tuesday, setting the tone for Q2 results.

Bitcoin

• Bitcoin (BTC) closed above $109,200 for the first time, propelled by more than $2.2 billion in spot ETF capital this week—the strongest institutional inflow of 2025. BlackRock alone added $336.8 million in BTC, highlighting growing confidence from major asset managers.
• Ethereum (ETH) and Solana (SOL) also gained traction, buoyed by positive sentiment around potential altcoin ETF launches. With technical indicators heating up, analysts are now targeting $112K as the next key resistance level for Bitcoin.
  Watchlist: Bitcoin: 99,000 -112,000, Ethereum: 2,000-2,800, Solana: 140-183

Forex

• The euro edged down to 1.1765 Monday morning, pressured by fresh concerns over global trade disputes. Traders turned cautious after U.S. Treasury Secretary Bessent warned that tariffs may revert to April 2 levels by August 1 if deals aren't finalized, dampening euro demand despite bullish momentum above the 100-day EMA
• Meanwhile, the Japanese yen weakened, pushing the USD/JPY exchange rate above the 145.00 mark. A combination of soft wage data and renewed U.S. tariff threats—particularly over Japan’s resistance to U.S. rice imports—added pressure. With diverging Fed-BoJ policy outlooks and rising geopolitical risks, both the EUR and JPY struggled against a firm U.S. dollar.
  Watchlist: EUR/USD: 1.1000–1.1850, USD/JPY: 140–162

Basic Materials

• Gold (XAU/USD) fell to around $3,300 on Monday, marking a multi-day low as the U.S. dollar firmed slightly in early trade. Despite modest greenback strength, safe-haven demand may remain underpinned by rising geopolitical tensions and investor concern over the long-term fiscal impact of Trump’s sweeping tax-and-spend bill. Ongoing Fed rate cut expectations are also likely to cushion deeper declines in the yellow metal.
• Meanwhile, WTI crude oil dipped toward $65.00 after OPEC+ announced plans to boost production by 548,000 barrels per day in August. The unexpected increase revived concerns about oversupply, pressuring prices despite recent geopolitical flare-ups in the Middle East. Traders now look to global demand signals and inventory data for further direction.
  Watchlist: GOLD: 2,600–3,500, US Oil: 55.60–75.80

Economic Calendar (EST):

No major economic news

Earnings:

Today: No major earnings


The TEFS Analyst team wishes you a successful day!