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July 3, 2025
Dow: 44,835
S&P: 6273
Nasdaq: 20,877
10-YR T-Note: 4.34%
Bitcoin: 109,607
VIX: 16.21
Gold: $3,342
Crude Oil: 66.4
Don Selkin, the creator and innovator of the "Fair Value" numbers, as its Chief Market Strategist on the Newbridge platform has given CNBC and its Predecessor, these numbers every day for the over 40 years - never missing a single day, as well as given the fair value for the Nasdaq 100 futures since their introduction in 1996 and the Dow Jones stock index futures since 1997. Mr. Selkin has also been quoted in several publications including but not limited to Bloomberg News, New York Post, Reuters, and The New York Times. Mr. Selkin's Fair Value numbers are included in the U.S.
Futures Report broadcast on CNBC every day before the market
opens attributing "Newbridge Securities" as the source. In addition, NSC provides to its professionals, their clients and the public access to Don Selkin's more in depth financial market views.
We saw the first half of the year end with the following items – a trade war, a real war with bombs dropped in the Middle East, plus a barrage of insults hurled by the president of the United States at the head of the Federal Reserve.
The stock market has powered through all of that in the past few months to set new records yesterday to all-time S&P highs at 6227 and the Nasdaq at 20,693.
While investors can take a bow — and breathe a sigh of relief — there is no let-up ahead. The pause that the President put in effect for many tariffs expires on July 9th. Second-quarter profit reports and upcoming economic indicators could reveal more about the impact of the tariffs that did go into effect. The Fed could face pressure on lowering interest rates.
Here’s a look at what’s happened in markets and what could lie ahead:
Trump appeared in the Rose Garden on April 2nd and announced steeper-than-expected tariffs on almost all U.S. trade partners. He especially targeted China, eventually raising the duties on imports from China to 145%. Beijing retaliated by raising tariffs on U.S. goods to 125%.
Within just four days, the S&P collapsed by 12%, and the Dow Jones lost nearly 4,600 points, or about 11%.
Trump shrugged off the stock market drop but he couldn’t ignore the signs of trouble in the bond and foreign exchange markets. Tumbling prices for U.S. government bonds raised worries that the U.S. Treasury market was losing its status as the world’s safest place to keep cash. The value of the U.S. dollar also sank in another signal of diminishing faith in the United States as a safe haven for investors.
On April 9th, Trump announced on social media a “90-day PAUSE” for most of the tariffs he’d announced, except those against China. The S&P made a huge jump of 9.5% for one of its best days ever.
In May, the administration struck a trade deal with the United Kingdom. Then came the biggest news: the U.S. and China said that they were temporarily rolling back most of the tariffs they’d imposed on one another. The countries have vaguely indicated that they have reached some sort of deal, but details are scarce.
Markets briefly got hurt when Trump threatened tariffs against the European Union, but he decided to hold off until July 9th as the countries negotiate.
The trade war was pushed out of the headline by a real war last month as Israel and Iran attacked each other. The price of oil spiked, threatening to boost inflation and slow the global economy. A U.S. strike on Iranian nuclear facilities was followed by a cease-fire and oil prices fell sharply and investors then pushed markets toward a new record.
Trump wants the Fed to lower interest rates. The Fed says it needs to see the impact of his tariffs before it can act. The president has taken to regularly bashing Jerome Powell, whose term as Fed chair expires next May. Trump could name his nominee to replace Powell unusually early, in an attempt to undermine him. The drama could influence trading in the bond and foreign exchange markets, and by extension to stocks.
Strong profit reports for the first quarter helped offset the pressure from tariffs. Soon, starting in two weeks, companies will report results for the second-quarter that just ended, with the large financials getting things started. While analysts have lowered their expectations for earnings growth for the companies in the S&P, they still forecast solid growth of 5%, according to FactSet. The average quarterly profit growth over the past five years is 12.7%. Some companies withdrew profit forecasts amid the uncertainty created by tariffs, making forecasting even trickier.
The “90 day PAUSE” with most countries ends July 8th. There is considerable uncertainty about what is going to happen after that. Trump’s so-called reciprocal tariffs -- aimed at countries with which the United States runs trade deficits and ranging from 11% to 50% -- could snap back into place, something that risks hurting the markets.
The president could also say that his negotiators are making progress with some or all of the targeted countries and give them another reprieve, Vietnam being the most recent example. Members of his administration seemed to indicate this week that there is some flexibility in the deadline.
This is the background as we enter the second half of the year and the start of earnings period in the third week of July with the large financials the first ones to report.
