Fed Drifts, Bulls March On 10/07/2025

HOT stories for today

US market wrap:

• Markets rebounded after a two-day dip, buoyed by news of a fresh three-week trade truce. Bitcoin surged to a new all-time high, Nvidia became the first company to surpass a $4 trillion market cap, and looming tariff threats failed to derail the rally. The S&P 500 and Dow Jones each ended their two-day losing streaks, gaining 0.6% and 0.5%, respectively, while the Nasdaq soared 0.9% to close at a new peak. 
• All eyes now turn to Delta Airlines’ earnings report due today, which will unofficially kick off the heart of earnings season. With indexes hitting records despite little fresh revenue data, volatility could ramp up quickly, so strap in. President Trump announced a 50% tariff on copper imports, effective August 1, and imposed the same levy on Brazil, citing the legal troubles of former President Bolsonaro and what he described as “unfair” trade practices. Meanwhile, Bitcoin climbed past $112,000, driven by a tech-led surge spearheaded by Nvidia.

Fed Drifts, Bulls March On

• Federal Reserve officials were split at their June 17–18 meeting on how soon and how aggressively to cut interest rates. While most supported some easing later this year, views varied, some favoring a move as early as July, others preferring to hold steady. 
• Concerns centered on conflicting signals: softer consumer spending and labor data vs. inflation still above the 2% target, especially with Trump’s tariff threats potentially fueling price pressures. Despite political pressure from President Trump, who’s calling for sharp rate cuts and even Powell’s resignation, the Fed held rates steady and emphasized a cautious, data-driven approach. Markets now await the late-July meeting, with two cuts still projected in 2025—but no consensus on when they’ll begin.

Stocks on the move:

• UnitedHealth Group (UNH) shares slipped over 1% after reports surfaced that the Justice Department’s health-care fraud division is investigating its Medicare billing practices.
• Mobileye Global (MBLY) dropped 7% as Intel (INTC) announced plans to sell 45 million shares through a secondary public offering.
• Bloom Energy (BE) jumped more than 18% following an upgrade from JPMorgan to overweight from neutral, citing benefits from Trump’s new tax bill.
• Monster Beverage (MNST) declined by over 3% after Rothschild & Co. downgraded the stock to neutral from buy, citing uncertainty surrounding aluminum tariffs and elevated expectations for 2026.

Watchlist: NVDA, AVGO, AMD, DAL, CAG, TSLA, MSFT, META

Today’s action

• Asia-Pacific markets traded mixed Thursday as investors digested the Bank of Korea’s rate hold and fresh U.S. tariff headlines. Japan’s Nikkei 225 opened down 0.45%, while Singapore’s benchmark hit another record high. Futures for Hong Kong’s Hang Seng Index pointed to a slightly softer open. 
• Overnight in the U.S., stock futures held near flat after the S&P 500 bounced modestly from recent losses tied to renewed trade fears. Futures on the S&P 500 and Nasdaq 100 hovered just below the flatline, while Dow futures dipped slightly. Market focus shifted late Wednesday as President Trump announced a 50% tariff on Brazilian imports, effective August 1, linking the move to political tensions surrounding Brazil’s former president, Jair Bolsonaro. Meanwhile, traders await Thursday morning’s jobless claims report for clues on the labor market’s resilience.

Bitcoin

• Bitcoin hit a new all-time high above $112,000 on Wednesday afternoon, lifted by a broader tech rally led by Nvidia (NVDA). Despite weeks of tight trading, the flagship cryptocurrency surged in tandem with equities as investor appetite for risk returned. Public company purchases of Bitcoin outpaced ETF inflows in Q2, signaling growing institutional conviction.
• Still, Bitcoin has risen just 2% over the past month, showing that while it's being embraced as “digital gold,” it remains tied to market sentiment. With expectations for corporate buying to pick up and Congress inching closer to crypto regulation, many traders anticipate more highs ahead in the second half of 2025.
  Watchlist: BTC: 99,000–113,000 | ETH: 2,000–2,800 | SOL: 140–183

Forex

• The Japanese Yen slipped on Thursday, trading near session lows against the US Dollar as concerns over Trump’s 25% tariffs on Japanese goods weighed on sentiment. Safe-haven demand kept losses in check, but the USD/JPY pair remained under pressure from broader dollar softness. 
• The Euro edged higher, with EUR/USD near 1.1730, boosted by the dollar’s decline after dovish FOMC minutes and news that the EU was not included in Trump’s latest tariff list targeting eight nations with duties of 20% to 50%.
  Watchlist: EUR/USD: 1.1000–1.1850 | USD/JPY: 140–162

Basic Materials

• West Texas Intermediate (WTI) dipped to around $67.15 in early Thursday trade after U.S. crude inventories unexpectedly rose by 7.07 million barrels, according to EIA data. Ongoing tariff uncertainty also pressured oil prices, though geopolitical tensions in the Red Sea may help cushion further losses.
• Gold extended its rebound for a second day, lifted by safe-haven demand amid renewed trade fears and a weaker dollar. Softer Treasury yields and building expectations for Fed rate cuts continued to support XAU/USD, which bounced from recent lows near the $3,282 level.
  Watchlist: Gold: 2,600–3,500 | US Oil: 55.60–75.80

Economic Calendar (EST):

08:30 am: USD Unemployment Claims
09:00 am: USD FOMC Member Musalem Speaks
01:01 pm: USD 30-y Bond Auction
01:15 pm: USD FOMC Member Waller Speaks


Earnings:

BMO ( Before Market Open)
DAL          Delta Airlines
CAG         ConAgra Brands
SMPL       The Simply Good Foods

AMC (After Market Close): LEVI, PSMT, WDFC


The TEFS Analyst team wishes you a successful day!