Nasdaq hits correction territroy: what comes next? 07/03/2025

HOT stories for today

 

US market wrap:
 

• U.S. stocks plunged despite Trump reversing course on tariffs for Canada and Mexico. Risk-off sentiment dominated global markets, with China standing out as an exception, rallying on stimulus optimism. Concerns escalated Thursday afternoon after Treasury Secretary Scott Bessent defended tariffs, leaving investors uncertain about how far the White House is willing to go on compromises regarding the embattled policy. The continuous shifts in tariff decisions and conflicting statements from administration officials left markets fatigued, adding to the already fragile investor sentiment.
• The S&P 500 heatmap showed only 2 of 11 sectors in positive territory, with energy (+0.30%) leading while technology (-2.78%) lagged as the worst-performing sector. Today's key market drivers: Powell's speech and NFP report. Investors are eagerly awaiting positive signals, hoping for a ray of optimism amid market uncertainty.

Nasdaq hits correction terrritroy: what comes next? 

• The Nasdaq plunged into correction territory Thursday as global trade war fears intensified. Despite Marvell Technology (MRVL) beating earnings expectations, its results sparked fresh doubts about the AI trade, adding to investor unease. The Nasdaq Composite tumbled -2.6%)to 18,069.26, down 10.4% from its record high.
• What triggered the selloff?
  Trump dismissed market concerns, insisting tariffs will make the U.S. "very strong." He denied delaying Canada and Mexico tariffs due to market volatility. Bond markets added pressure as global yields surged, with Germany’s 10-year bund yield spiking 30 basis points before stabilizing. Deutsche Bank’s Jim Reid called Germany’s policy shift a "once-in-a-generation" event, fueling a risk-on rally in Europe while U.S. markets remained on edge. With trade tensions rising and market uncertainty growing, investors are bracing for more volatility ahead.

 
Stocks on the move: 
      

• Hewlett Packard Enterprise (HPE) – Shares plunged 17% in after-hours trading after the company issued weaker-than-expected guidance for the fiscal second quarter. The company projected adjusted earnings between $0.28 and $0.34 per share, with revenue ranging from $7.2 billion to $7.6 billion, falling short of analyst expectations.
• Broadcom (AVGO) – The semiconductor giant soared 17% following a strong fiscal first-quarter earnings beat on both revenue and profit. Broadcom also raised its outlook for the current quarter, boosting investor confidence.
• Mobileye Global (MBLY) – Shares of the autonomous driving technology firm climbed over 3% in after-hours trading after a regulatory filing revealed that Steve Cohen’s hedge fund, Point72, acquired a 5% stake in the company. Cohen has been a longtime advocate of AI-related investments.
• Walgreens Boots Alliance (WBA) – Shares spiked nearly 6% in extended trading before being halted on news that private equity firm Sycamore Partners secured a $10 billion deal to take the drugstore chain private.

Today’s action

• Asia-Pacific stocks fell on Friday, tracking Wall Street’s losses after Trump’s tariff concessions failed to reassure investors. Japan’s Nikkei 225 led the decline, dropping 2.17%, while long-term Japanese government bond yields surged to levels not seen since the 2008 financial crisis.
• In China, customs data revealed weaker-than-expected export growth for January and February, rising only 2.3% year-over-year in U.S. dollar terms, well below the 5% forecast in a Reuters poll. U.S. stock futures edged higher on Thursday evening as traders attempted to move past tariff concerns while focusing on Friday’s crucial nonfarm payrolls (NFP) report. Investors await the February jobs report, expected to show 170,000 new jobs and an unchanged unemployment rate of 4%, providing key insights into the economy’s health.

Wahtclist: AVGO, WBA, MBLY, IOT, HPE, COIN, GAP, COST 

Bitcoin

• Bitcoin (BTC) fell 3% to $87,586 after President Donald Trump signed an order establishing a U.S. strategic bitcoin reserve and digital asset stockpile. Investors reacted negatively to the lack of immediate BTC purchases, sending prices briefly to $84,688.
• Other cryptocurrencies also dipped as well. White House crypto chief David Sacks confirmed the reserve will include 198,000 BTC seized by the U.S. government (worth $17B) and other forfeited assets, with no taxpayer-funded acquisitions planned. Markets remain cautious, with JPMorgan warning economic uncertainty could limit crypto gains. Bitcoin briefly hit $90K but risks falling toward $70K if it fails to hold.
  Watchlist: Bitcoin: 80 000-100 000, Ethereum:2000-2600, Solana: 120-176

Forex

• The Japanese Yen (JPY) remains firm, hovering near its highest level since early October, as growing expectations for more Bank of Japan (BoJ) rate hikes continue to support the currency. Rising Japanese government bond (JGB) yields and narrowing rate differentials with other major economies further boost demand for the safe-haven JPY, especially amid global trade tariff uncertainties.
• The EUR/USD pair trades around 1.0810 in Friday’s Asian session, after touching a four-month high of 1.0853 on March 7. The US Dollar struggles as Treasury yields decline, driven by rising expectations for Fed rate cuts amid concerns over US economic growth. Meanwhile, ECB President Christine Lagarde warned that downside risks to growth persist, keeping investors focused on the European Central Bank’s policy direction.
  Watchlist: EUR/USD: 1.0200-1.0820, USD/JPY: 149-158.80

Basic Materials

• Gold (XAU/USD) hovers above $2,900 in Friday’s Asian session as traders await the US Nonfarm Payrolls (NFP) report. Rising trade tensions, a weaker US Dollar, and a risk-off mood provide support, while bets on further Fed rate cuts help limit downside movement. However, lack of fresh catalysts keeps gold trading in a tight range for the second consecutive session.
• West Texas Intermediate (WTI) trades around $66.00, facing selling pressure in early Friday trading. Rising US crude inventories and OPEC+ plans to boost production weigh on prices, while concerns over US, Canada, and China trade tariffs add to market uncertainty. Traders now look to the US employment report for fresh direction.
  Watchlist: GOLD 2600-2945, US Oil: 66.00-79.00

Key Economic Events Today:

EST time

08:30 am: USD Unemployment Rate
08:30 am: USD Non-Farm Employment Change
10:15 am: USD FOMC Member Bowman speaks
10:45 am: USD FOMC Member Williams speaks
12:20 pm: USD FOMC Member Kugler speaks
12:30 pm: USD FED Chair Powell Speaks
01:30 pm: USD President Trump Speaks

Earnings

BMO (Before the US Market opens)
AQN         Algonquin Power
ADV          Advantage Solutions
GCO          Genedco Inc.
WHF          Whitehorse Finance 

AMC (After the US Market closes): Enjoy your weekend!

The TEFS Analyst team wishes you a successful day!