Nosebleed Territory or Not

* Analyzing the markets with Richie Naso, a Wall Street veteran of over 40 years and former member of the NYSE.

DJIA 52-wk: +13.85% | YTD: +5.37% | Wkly: +2.30%
S&P 500 52-wk: +12.79% | YTD: +6.76% | Wkly: +1.72%
NASDAQ 52-wk: +12.25% | YTD: +6.68% | Wkly: +1.62%
Technology Select Sector SPDR ETF 52-wk: +10.34% | YTD: +10.51% | Wkly: +2.47%

Key Market Moves

Major Indices Weekly Gains:

The Dow rose ~2.3%, S&P 500 gained ~1.7%, Nasdaq up ~1.6%, and Russell 2000 surged ~3.5%, marking strong performance through the holiday-shortened week (keelpoint.com)

Record Highs Continue:

S&P 500 and Nasdaq hit fresh all-time highs mid-week, supported by optimism around trade and tech sector strength. (investors.com)

Jobs Data Boost:

The June non-farm payrolls added 147,000 jobs (versus 110k forecast) with unemployment falling to 4.1%, reinforcing market resilience. (John Clay)

Drivers Behind Moves

Trade & Tariff Signals

The passage of a federal budget with provisions for possible tariffs rekindled trade concerns—yet the market responded positively, viewing them as less severe than anticipated. (investors.com)

Tech & AI Leadership

Tech stocks, especially AI-driven firms, led gains. ETFs IGV, SMH, ARKK saw solid performance, with Nvidia near a historic $4 trillion valuation. (investors.com)

M&A & IPO Momentum

Deal activity rebounded—IPOs hit their highest levels since 2021, and AI-focused M&A surged, including SoftBank’s $40 billion OpenAI stake and Alphabet's $32 billion bid for Wiz. (investopedia.com)

Fiscal & Yield Considerations

Rising federal deficits (projected to exceed 120% of GDP by 2032) may mean more Treasury issuance and rising yields—an important factor for portfolio diversification. (interactivebrokers.com)

Day-by-Day Highlights

June 30 (Monday): S&P 500 closed Q2 at a record high, up ~0.5%; notable movers included HPE, Juniper, First Solar, Palantir, and Albemarle. (investopedia.com)

Through July 3 (Thursday): Continued modest gains; S&P +0.8%, Dow +0.8%, Nasdaq +1%—Russell 2000 up ~1%. (apnews.com)

July 4 Holiday: Volumes lighter, U.S. markets closed early or were closed in observance of Independence Day.

Summary Outlook

Overall, the week reinforced an optimistic market mood grounded in strong labor figures, ongoing deal / AI momentum, and manageable trade headlines. Still, underlying fiscal pressures and potential tariff risks warrant caution moving forward.

As the July 9 tariff deadline approaches, expect more deals in the coming days, but the drama is far from over. Who is in and who is out—for now.

Ahead of a looming July 9 deadline for higher tariffs on more than 100 countries, the Trump administration is likely to unveil a handful of preliminary deals even as it ramps up pressure on other countries and confirms investors’ hunch that tariffs are here to stay.

Trade negotiations have been chaotic since the administration hit pause on the tariffs it unveiled on April 2 in its bid to rapidly reorder the global trading system. The goal is to reduce the country’s $1.2 trillion trade deficit along with many non-tariff barriers.

Having trouble keeping track? You’re not alone. Recent weeks have been marked with bouts of escalation followed by de-escalation—most famously with China, and more recently with the European Union, Canada, and Japan.

The administration’s vow to strike 90 deals in 90 days is out the window. Only a preliminary agreement with the United Kingdom that left 10% tariffs in place had been struck before Wednesday’s announcement that Vietnam had agreed to 20% tariffs. That’s twice what the export-dependent nation started with but half the level threatened on April 2. The Trump administration also said it would levy a 40% duty on “transshipped” goods—targeting concerns that China was using Vietnam to circumvent trade restrictions.

Negotiations have been complicated by various factors, including domestic politics such as elections this month in Japan, pushback from countries against U.S. demands that they take a harder stance on China, and uncertainty over the fate of industry-oriented tariffs. Some of those are already in place, others are pending.

President Donald Trump this week reiterated the July 9 deadline, adding that he would send letters to countries informing them of their tariff rates. But analysts caution against the notion that the coming days will abate tariff uncertainty. Deals are likely to be preliminary, and those sector-oriented tariffs could jeopardize any fragile agreements.

Even amid the uncertainty, the S&P 500 index has managed to hit new highs. Investors are playing down trade risks after several instances in which the administration has pulled back on escalatory moves. But trade veterans and analysts note that the uncertainty, which has left many businesses hesitant to invest and spend, could continue.

“I look at the template as the U.K. deal: We will agree on what we can, agree that we are not done agreeing on things and keep working, even while we paper the phase one deal,” says Neil Bradley, chief policy officer at the U.S. Chamber of Commerce. “Largely, 10% tariffs stay in place, and they kick the can down the road [on other issues].”

Among the larger trading partners that are contenders to get a framework agreement are India, Canada, South Korea, and possibly the European Union, though each has had rough patches in the back and forth. Deals could include agreements to buy U.S. goods—natural gas, agriculture, weapons—and open up certain markets for U.S. companies.

Industry tariffs are complicating trade negotiations.

Targeted Sector: Steel / Aluminum

• Tariff Rate: 50%
• Countries Impacted: Canada, Mexico, South Korea, European Union, Japan

Targeted Sector: Timber / Lumber

• Tariff Rate: TBD
• Countries Impacted: Canada, Germany, Brazil

Targeted Sector: Copper

• Tariff Rate: TBD
• Countries Impacted: Chile, Mexico, Canada

Targeted Sector: Autos

• Tariff Rate: 25%
• Countries Impacted: Japan, European Union, Mexico, South Korea, Canada

Targeted Sector: Auto Parts

• Tariff Rate: 25%
• Countries Impacted: Mexico, Canada, European Union, Japan, South Korea

Targeted Sector: Semiconductors / Semi Equipment

• Tariff Rate: TBD
• Countries Impacted: South Korea, Taiwan, Japan, China

Targeted Sector: Processed critical minerals and derivative products

• Tariff Rate: TBD
• Countries Impacted: China

Targeted Sector: Maritime, Logistics and Shipbuilding

• Tariff Rate: TBD
• Countries Impacted: China

Sources: Atlantic Council, Federal Register, Office of the U.S. Trade Representative

India was early to the negotiating table and prioritized by the Trump administration, according to trade experts. The country has a hefty share of trade barriers and is a domestically oriented economy. However, Prime Minister Narendra Modi has tried to position India as an alternative for companies such as Apple seeking diversification from China.

India could emerge with an agreement that includes a reduction in some tariffs on both sides, with the objective of a larger bilateral deal to come, says Mark Linscott, a career trade negotiator who worked in the Obama and first Trump administration and is now a senior adviser at consultancy The Asia Group.

The administration will also look to make an example of some countries where talks have been more difficult, analysts say. One example could be Japan. Trump this week described Japan as “spoiled” and bristled at its unwillingness to accept U.S. rice exports. He threatened a tariff rate of as much as 35%— higher than the 24% it floated on April 2.

Here To Stay

Most analysts expect countries to end up with at least a 10% tariff, four times what many started with. With Vietnam out of the way, Malaysia, Thailand, and the Philippines could get hit with higher tariffs—15% to 20%—due to transshipment concerns, says Henrietta Treyz, director of economic policy research at consultancy Veda Partners.

Financial Stocks Are Flying—and They Don’t Look Ready to Stop

“Banking is very good business if you don’t do anything dumb,” according to Warren Buffett. History suggests that’s easier said than done, but that shouldn’t prevent investors from betting big on financials to outperform over the rest of the year.

Not that they’ve been underperformers in 2025. The Financial Select Sector SPDR exchange-traded fund is up about 8.5% since the start of 2025, the third-best among the Sector SPDRs, while the Invesco KBW Bank ETF is up double digits, easily ahead of the S&P 500 index. That’s not too surprising, given the continuing strength of economic data, the expectation for a less onerous regulatory environment, and the hope that the Federal Reserve will cut interest rates at some point in the coming months. Easily-passed bank stress tests and higher dividends, announced this week, also helped.

That wouldn’t be a rarity. While banks have a bad reputation—almost taking down the U.S. economy will do that—financials have actually outperformed in 10 of the past 14 years, notes Trivariate President Adam Parker, who argues investors should overweight the group. At the firm’s recent client event, he noted that sentiment “was positive toward stocks that benefit from a recovery in M&A, like Jefferies, as well as toward the shareholder return potential of Capital One post the Discover Financial merger, value-add services from bellwethers Mastercard and Visa, as well as select insurers like Progressive.”

Nor is he the only one positive on the group. In RBC Capital Markets’ midyear outlook, the firm noted it, too, is overweight U.S. financials. While JPMorgan Chase, Bank of America, and other giant institutions tend to get most of the attention, regional banks look set to benefit from a “less combative regulatory environment [that] is beginning to take shape with the appointment of new regulatory leadership,” the firm’s analysts write. “We believe these changes can lead to stronger growth, less capital and liquidity and debt requirements, and more M&A in the banking sector.”

Bargain hunters, however, may want to go smaller. Hovde Group research director Feddie Strickland notes that while banks with market values above $50 billion have the highest valuations based on price-to-tangible-book ratios, banks worth $250 million to $1 billion are the least expensive. Since Liberation Day, the valuation gap between the two has only gotten wider. Some of the firm’s Outperform-rated picks in the smallest category include Mercantile Bank, Equity Bancshares, and Provident Financial Services.

Financials, however, are far more than banks. RBC notes that the recent ruling overturning the Consumer Financial Protection Bureau $8 late-fee cap has been positive for the credit card companies, and student lending reform could be another positive. As Trivariate’s Parker noted, Capital One Financial has the Discover kicker to help juice upside, and the stock was also named a BTIG’s top 10 pick. It also has strong technical trends, with recent gains suggesting it can keep rallying into the $220 to $230 range, up 5.5% on the high end from a recent $218.

No matter what part of the industry investors favor, RBC analysts argue there’s room to be bullish. “[We have] a constructive view on demand and…one of the most bullish views on the U.S. political backdrop across all U.S. sectors,” they write. “Deregulation is a key tailwind for the sector in our view.”

And you can take that to the bank.

I don’t know how much more good news can happen. President Trump continues to win on almost every front. The market has celebrated repeatedly taking averages to new ATH’s. Near term, that’s what’s worrying me.

— Richie

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