July 7th, 2025
Stocks Dip at Open as Investors Eye Trade Developments
U.S. equity markets opened lower Monday, kicking off a relatively quiet week for economic data. Industrial stocks are bucking the trend with modest gains, while consumer discretionary and staples sectors are under pressure. Overseas, Asian markets ended mixed, and European shares are climbing after Eurozone retail sales rose 1.8% year-over-year in May—surpassing expectations for a sharper slowdown.
Economic Takeaways:
- Major indexes finished last week’s holiday-shortened trading at fresh all-time highs.
- The U.S. dollar is strengthening against major global currencies.
- Uranium futures have risen more than 8.2% in the last month and 22% from their March low.
- Treasury yields are ticking up, with the 10-year yield rising to 4.37%.
- In commodities, WTI crude is climbing despite OPEC+ delivering a larger-than-expected production hike at its July 6 meeting. Crude oil futures (/CL) rose amid market surprise as OPEC+ announced a larger-than-expected output increase for August, stoking oversupply concerns. Eight oil-producing nations agreed to collectively raise crude production by 548,000 barrels per day as voluntary supply cuts continue to be rolled back.
- President Trump signaled that updates on trade agreements or tariffs will be unveiled by July 9, with some potentially arriving as early as today. Trump also stated that countries supporting certain BRICS policies will face an extra 10% tariff. The BRICS bloc—comprising Brazil, Russia, India, China, and other South American nations—is currently holding a two-day summit in Brazil.
- Treasury Secretary Scott Bessent told CNBC several deal announcements are ahead. Bessent noted that countries may now have until August 1—an extension from the original Wednesday deadline—but warned that this leaves limited time for dozens of nations to finalize agreements before potentially facing steep tariffs.
- The tax and spending-cut bill adds an estimated $3.3 trillion to the national debt, according to the non-partisan Congressional Budget Office.
- June saw a surge in initial public offerings (IPOs), with five tech companies successfully launching their public market debuts.
- Bitcoin (/BTC) slipped 1% to fall back below $110,000. Despite testing all-time highs on Thursday, the cryptocurrency has shown little upward momentum since late May. It remains above its 50-day moving average, which could provide technical support near $105,000.
- Following last week’s stronger-than-expected job numbers, the probability of a July rate cut dropped below 5% early Monday, according to the CME FedWatch Tool. The chance of at least one rate cut by September fell to just under 70%, down from nearly 100% on Thursday morning.
Elon Musk Wants a New Political Party
Elon Musk’s plan to launch a new political party has stirred controversy. Over the weekend, Musk announced on X that he is forming the “America Party.” In response, former President Trump took to social media, saying the Tesla CEO had gone “completely ‘off the rails.’”
Yahoo Finance’s Pras Subramanian reports:
Musk’s previous sharp criticisms of the bill caused a major fallout with Trump, putting Tesla and Musk’s other ventures, like SpaceX, in the crosshairs.
The ongoing clash proved too much even for Tesla supporters and investors, who saw the stock take a significant hit a few weeks ago before bouncing back.
“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take,” Wedbush analyst Dan Ives wrote. “After leaving the Trump Administration and DOGE there was initial relief from Tesla shareholders and big supporters … That relief lasted a very short time and now has taken a turn for the worst with this latest announcement.”
Oil Prices Poised to Fall as OPEC Boosts Supply
Wall Street analysts are forecasting a notable decline in oil prices by year-end due to an expected surge in market supply.
Despite this outlook, West Texas Intermediate crude (CL=F) was trading above $67 per barrel on Monday, while Brent crude (BZ=F), the global benchmark, held above $69 per barrel. These gains came even after OPEC and its allies announced a larger-than-expected output increase over the weekend.
“Overall, supply is clearly rising; however, demand remains stronger than anticipated, resulting in volatile trading,” said Dennis Kissler, senior vice president at BOK Financial, in a Monday market note.
OPEC justified its August production increase of 548,000 barrels per day—the fourth consecutive monthly hike—citing lower global oil inventories. This boost surpassed market expectations.
“Saturday’s move to accelerate supply increases signals OPEC’s ongoing strategy to normalize spare capacity, protect market share, maintain internal unity, and restrain U.S. shale output,” said Goldman Sachs analysts Daan Struyven and team.
They predict further production growth from OPEC in September and reaffirmed their price forecast, projecting Brent crude to average $59 per barrel in Q4 2025 and $56 in 2026.
On the Move
- Tesla (TSLA) dropped 6.4% in early Monday trading after CEO Elon Musk announced plans to launch a new political party and faced fresh criticism from former President Trump. Adding to the pressure, William Blair downgraded Tesla from Outperform to Market Perform, citing demand challenges and the removal of tax and regulatory credits in the recent budget bill that previously benefited the company.
- Microsoft (MSFT) edged higher, eyeing a test of technical resistance around the $500 level following modest gains in Thursday’s shortened session. The software giant also revealed plans to cut 9,000 jobs, bringing total layoffs over the past two months to 15,000—just under 4% of its workforce.
- Nvidia (NVDA) slipped 0.7% in pre-market trading after closing at a record high Thursday, up 1.3%. The chipmaker is on track to surpass Apple (AAPL) as the world’s most valuable company, with a market cap of $3.89 trillion compared to Apple’s $3.915 trillion. Citi lifted its price target for Nvidia stock, citing the expanding AI market.
- Tripadvisor (TRIP) fell 0.4% early Monday after surging nearly 17% on Thursday to its highest level since February, following hedge fund Starboard Value’s disclosure of a stake exceeding 9% in the online travel platform.
- Renewable energy stocks including First Solar (FSLR) and Enphase Energy (ENPH) each dipped 1% in pre-market trading after gains on Thursday. The latest, and likely final, version of President Trump’s major bill removed a proposed tax on solar and wind companies during Senate revisions last week.
- Constellation Brands (STZ) climbed just over 1% following a Jefferies upgrade from Hold to Buy, citing the company’s “solid” balance sheet among key factors.
- Shell PLC (SHEL) declined nearly 3% after the company reported profit headwinds from weakness in its gas trading division and losses in chemicals and products units, according to Reuters.
What’s Ahead
No major announcements or earnings tomorrow but on Wednesday we can look forward to the FOMC minutes. Thursday earnings reports will come from Delta (DAL), Conagra (CAG), and Levi Strauss (LEVI).
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