Market Recap - Monday, July 7, 2025
Stocks Retreat as Trade Tensions Rise and Tariff Deadlines Approach
Stocks closed lower today, with the Dow, S&P 500, and Nasdaq all pulling back from the record highs set in the previous session. The Russell 2000, which tracks small-cap stocks, saw the biggest drop. Big tech stocks like Tesla and semiconductor companies were among the biggest decliners, with Tesla facing criticism from President Trump and concerns about losing market share in China. However, some sectors, like aerospace and defense, healthcare, and dollar stores, performed better than the broader market. The dollar rose, while gold and Bitcoin saw small declines, and oil prices went up by 1.4%.
Key Market Developments:
The biggest headline today came from President Trump, who began issuing tariff letters to countries that have not completed trade deals with the US. Japan and South Korea are the first to face 25% tariffs starting August 1. Other countries, including South Africa and Malaysia, are also targeted. Trump pushed back the July 9 trade deadline to August 1, emphasizing the need to get the best deals possible. Despite these trade headlines, markets have largely shrugged off the news, with investors not expecting a major escalation in tariffs.
There was little else driving the market today, with no major economic data releases or Federal Reserve comments. Overseas, tensions increased between China and the EU after China blocked European companies from participating in medical device procurement tenders. In the US, the Senate and House passed President Trump’s "Big, Beautiful Bill," a significant tax and spending package, which is expected to have an impact on markets as it moves toward becoming law.
Notable Gainers:
WNS (WNS Holdings): +14.3%, after announcing it would be acquired by Capgemini for $3.3 billion in cash, a 17% premium to the previous day's close.
Rocket Lab USA (RKLB): +9.0%, amid ongoing fallout from Trump’s comments regarding SpaceX and its rivalry with Rocket Lab.
Phibro Animal Health (PAHC): +6.8%, after an upgrade by JP Morgan, citing strong company performance and integration of a new unit.
SunRun (RUN): +5.8%, as it was upgraded by BNP Paribas Exane, expecting future growth due to tax credits through the early 2030s.
Notable Decliners:
Core Scientific (CORZ): -17.6%, after announcing its acquisition by CoreWeave in an all-stock transaction, but at a lower-than-expected valuation.
Tesla (TSLA): -6.8%, after President Trump criticized Elon Musk and his "America Party," while the company faces challenges in China.
Royal Gold (RGLD): -6.4%, after announcing a big acquisition deal, but the stock dropped despite a significant premium to the market price.
Oracle (ORCL): -2.1%, after media reports revealed the company was offering large discounts on its database and cloud services to the US government.
Here's Our Take
The market took a step back today as equities retreated from last week's highs. The continued trade tensions, particularly with tariffs and President Trump's push to extend deadlines, have kept some uncertainty in the air. While there was no major economic news, the market is still digesting the potential impact of the new tax and spending package, as well as the trade fallout with countries like Japan and South Korea. Despite the negative headlines, the overall market remains relatively calm, with a few sectors showing resilience, particularly those tied to defense and healthcare. As we move into the rest of the week, the market will likely stay focused on trade talks, especially as the August 1 tariff deadline looms, and we will be looking for any shifts in the economic outlook as we near the July employment data.
P.S. Know someone who'd appreciate smarter stock insights and clearer investing strategies? Forward this email or share this link: subscribe.triplegains.com