The S&P 500 Index ($SPX) (SPY) today is down -0.35%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.61%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.15%.  September E-mini S&P futures (ESU25) are down -0.37%, and September E-mini Nasdaq futures (NQU25) are down -0.16%. 

Stock indexes are retreating today on the escalation of trade tensions as President Trump ramps up his threats to impose higher tariffs, sparking a risk-off environment in asset markets.  Late Thursday, President Trump said a 35% tariff on some Canadian products would take effect on August 1, up from the current 25%.  The new Canadian tariffs would not apply to goods traded within the rules of the US-Mexico-Canada Trade Agreement, and a lower 10% would be kept on some energy-related imports.  He also said he plans to impose blanket tariffs of 15% or 20% on most US trade partners. 

Higher bond yields are also weighing on stocks today, with the 10-year T-note yield up +5 bp to 4.40%.  Bond yields are climbing today on concern that President Trump’s threats to impose higher tariffs on Canada and other US trading partners will lead to higher US inflation that could prevent the Fed from cutting interest rates.

The price of Bitcoin (^BTSUSD) is up more than +3% today at a new record high.  Bitcoin has rallied more than +9% this week after the US House Committee on Financial Services announced on Tuesday that the week of July 14 will be “Crypto Week.” The US House Committee on Ways and Means has planned an oversight subcommittee hearing on July 16 entitled, “Making America the Crypto Capital of the World,” which may lead to more crypto-friendly regulations.

Stocks continue to see downward pressure as President Trump has vowed to push forward with his aggressive tariff regime, stressing he would not offer additional extensions on country-specific tariffs set to take effect on August 1.  Earlier this week, Mr. Trump imposed a 50% tariff on copper imports that will include semi-finished goods, and said that drug companies could face tariffs as high as 200% on imports if they don’t relocate production to the US within the next year.  In addition, despite stating that the US was close to a trade deal with India, Mr. Trump said he would still impose a 10% tariff on India’s goods for their participation in BRICS, a group of developing nations he claimed were “set up to hurt” the US.   

Another hurdle for stocks is the upcoming earnings season, which begins in earnest next week.  Bloomberg Intelligence data show that the consensus for Q2 earnings of S&P 500 companies is for a rise of +2.8% year-over-year, the smallest increase in two years.  Also, only six of the eleven S&P 500 sectors are projected to post an increase in earnings, the fewest since Q1 of 2023, according to Yardeni Research.

Federal funds futures prices are discounting the chances at 7% for a -25 bp rate cut at the July 29-30 FOMC meeting.

Overseas stock markets today are mixed.   The Euro Stoxx 50 is down -1.06%.  China’s Shanghai Composite climbed to a 9-month high and closed up +0.01%.  Japan’s Nikkei Stock 225 fell to a 1-week low and closed down -0.19%.

Interest Rates

September 10-year T-notes (ZNU25) today are down -13 ticks.  The 10-year T-note yield is up +5.2 bp to 4.401%.  T-note prices are sliding today as President Trump’s threats to impose higher tariffs on Canada and other US trading partners fueled concern about higher US inflation that could prevent the Fed from cutting interest rates.  Also, negative carryover from today’s plunge in 10-year German bunds to a 3-1/4 month low is weighing on T-notes.

European government bond yields today are moving higher.  The 10-year German bund yield rose to a 3-1/4 month high of 2.734% and is up +2.1 bp at 2.726%.  The 10-year UK gilt yield is up +3.0 bp to 4.626%.

UK May manufacturing production fell -1.0% m/m, weaker than expectations of -0.1% m/m and the biggest decline in 10 months.

ECB Executive Board member Isabel Schnabel said, “The bar for another ECB interest rate cut is very high, and there would only be a case for another rate cut if we saw signs of a material deviation of inflation from our target over the medium term. And at the moment, I see no signs of that.”

Swaps are discounting the chances at 2% for a -25 bp rate cut by the ECB at the July 24 policy meeting.

US Stock Movers

Airline stocks are moving lower today, giving back some of Thursday’s sharp gains that were driven by positive guidance news from Delta.  United Airlines Holdings (UAL) is down more than -4% to lead losers in the S&P 500.  Also, American Airlines Group (AAL) is down more than -3%.  In addition, Delta Air Lines (DAL) and Alaska Air Group (ALK) are down more than -2%.

Capricor Therapeutics (CAPR) is down more than -28% after the FDA declined to approve the company’s treatment candidate aimed at treating a disease of the heart muscle associated with Duchenne muscular dystrophy. 

Civista Bancshares (CIVB) is down more than -12% after announcing the pricing of an underwritten public offering of 3.29 million shares of common stock at a price of $21.25 per share, below Thursday’s closing price of $24.82.

Oscar Health (OSCR) is down more than -4% after Wells Fargo Securities downgraded the stock to underweight from equal weight with a price target of $10.

Albemarle (ALB) is down more than -3% after UBS downgraded the stock to sell from neutral with a price target of $57.

Expeditors International of Washington (EXPD) is down more than -2% after Bank of America Global Research downgraded the stock to underperform. 

Northern Trust Corp (NTRS) is down more than -1% after Keefe, Bruyette & Woods downgraded the stock to underperform from market perform with a price target of $120.

Drone-related companies are climbing today after US Defense Secretary Pete Hegseth issued orders to ramp up production and deployment of drones.  Red Cat Holdings (RCAT) is up more than +19%, and AeroVironment (AVAV) and Kratos Defense & Security Solutions (KTOS) are up more than +7%. 

Cryptocurrency-exposed stocks are higher as the price of Bitcoin (^BTCUSD) rose more than +3% to a new record high.  MicroStrategy (MSTR) is up more than +3% to lead gainers in the Nasdaq 100.  Also, MARA Holdings (MARA) and Riot Platforms (RIOT) are up more than +2%.

Levy Strauss & Co (LEVI) is up more than +10% after reporting Q2 net revenue of $1.45 billion, stronger than the consensus of $1.37 billion, and raising guidance on its full-year net revenue forecast to up +1% to +2% from a previous forecast of down -1% to -2%. 

Performance Food Group (PFGC) is up more than +4% on reports that the company has attracted takeover interest from US Foods Holding Corp. 

Visteon Corp (VC) is up more than +2% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $120.   

Nvidia (NVDA) is up more than +1% at a record high to lead gainers in the Dow Jones Industrials after CEO Huang met President Trump at the White House, ahead of Huang’s trip to China.

Earnings Reports (7/11/2025)

Hingham Institution For Saving (HIFS), Lifezone Metals Ltd (LZM), PACS Group Inc (PACS), Smith-Midland Corp (SMID), Unity Bancorp Inc (UNTY).