🔔 Opening Bell: Trump Denies Reaching Out to Iran, Threatens Response Over U.S. Assets
On Monday, the S&P 500 closed at 6,033.11, up 0.49%, while the NASDAQ was up 0.77%, closing at 19,701.21. The Dow Jones Industrial Average closed the session at 42,515.09, up 0.39%.
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Headlines
Trump Denies Reaching Out to Iran, Threatens Response Over U.S. Assets
President Donald Trump has explicitly denied any communication with Iranian leadership regarding a potential ceasefire. The statement comes in the wake of Israel's recent aerial strikes against Iran, which Israeli officials characterized as a preemptive measure.
During his early return from the G7 summit in Canada, Trump delivered a stark warning to Tehran while speaking to reporters aboard Air Force One, stating, "We'll come down so hard if they do anything to our people." The president also disputed Director of National Intelligence Tulsi Gabbard's assessment about Iran's nuclear capabilities, insisting that Iran was "very close" to having a nuclear weapon. The situation remains volatile as diplomatic talks in Muscat, Oman, have been suspended due to the escalating conflict between Israel and Iran.
Fed Maintains Steady Stance on Interest Rates Amid Economic Signals
The Federal Reserve continues to maintain its measured approach to monetary policy, keeping interest rates steady as officials gather for their two-day meeting. This stance reflects the Fed's careful balancing act between its dual mandate of maintaining 2% inflation and ensuring a healthy labor market, with both objectives currently appearing synchronized.
Jon Faust, a fellow at the Center for Financial Economics at Johns Hopkins University and senior adviser to Jerome H. Powell, notes: "As long as the labor market continues to look solid but inflation continues to mainly move sideways, it's going to be a 'wait and see' situation." While the economy shows promising signs of achieving a soft landing, with contained inflation and stable employment figures, challenges remain as various policy factors could potentially impact future economic conditions.
Retail Sales Show Sharp Decline in May as Consumer Spending Pulls Back
The U.S. retail sector experienced a significant downturn in May 2025, with sales declining 0.9%, exceeding the Dow Jones consensus expectation of a 0.6% drop. The decrease was particularly noticeable in several key sectors, with building materials and garden stores falling 2.7%, gasoline stations down 2%, and motor vehicles and parts retailers experiencing a 3.5% decline. The slowdown follows a 0.1% loss in April, though year-over-year sales still maintained a 3.3% growth.
Despite the overall decline, there were some bright spots in the retail landscape. The control group, which excludes volatile categories like auto dealers and gas stations, actually showed a 0.4% increase. Additionally, miscellaneous retailers saw a 2.9% gain, while online sales grew by 0.9%. As Heather Long, chief economist at Navy Federal Credit Union, noted: "Americans bought cars in March ahead of tariffs and stayed away from car dealerships in May. Families are wary of higher prices and are being a lot more selective with where they spend their money."
Weak U.S. Retail Sales and Manufacturing Output Signal Economic Softening
U.S. retail sales fell 0.9% in May, the largest decline since January, driven primarily by reduced auto purchases following a tariff-fueled buying surge earlier in the year. Core retail sales, however, rose 0.4%, and online, clothing, and furniture sales showed strength. Manufacturing output was flat, with gains in motor vehicle and aerospace production offset by declines in other sectors. These data points suggest domestic demand is beginning to cool, aligning with earlier signs of a slowing labor market and rising economic uncertainty.
Economists are increasingly concerned that tariff-induced disruptions and inflationary pressures may weigh on consumer spending in the second half of 2025. While the Federal Reserve is expected to maintain current interest rates, import costs are rising due to a weaker dollar, potentially fueling inflation later this year. Manufacturing, which remains exposed to volatile trade policy and elevated production costs, continues to tread water. As households face resumed student loan payments and market volatility, many experts foresee growing downside risks to the broader economic outlook.
Trump's Truth Social Files for Dual Bitcoin and Ether ETF
In a significant move within the cryptocurrency investment space, Trump Media and Technology Group (DJT) has submitted a filing to the Securities and Exchange Commission (SEC) for a combined Bitcoin and Ethereum ETF. The proposed investment vehicle aims to allocate 75% of its capital to Bitcoin and 25% to Ethereum, marking an expansion from their earlier standalone Bitcoin ETF registration.
The initiative has gained notable support from Singapore-based exchange Crypto.com, which will serve as both custodian and liquidity provider for the ETF. This development aligns with the Trump family's broader involvement in cryptocurrency markets, particularly through World Liberty Financial, which maintains a substantial 96% of its assets on the Ethereum blockchain. If approved, this ETF would join an elite group of crypto investment products alongside industry giants like BlackRock, Grayscale, Fidelity, and Franklin Templeton, in a market where Bitcoin ETFs alone currently manage $131 billion in assets.
Oil Prices Rise 3% as Trump Demands Iran's Surrender, Threatens Supreme Leader
Crude oil futures experienced a significant surge of approximately 3% on Tuesday, driven by escalating tensions between the U.S. and Iran. The U.S. crude oil contract for July delivery reached $73.84 per barrel, while Brent crude rose to $75.41, following President Trump's confrontational statements towards Iran's Supreme Leader Ayatollah Ali Khamenei.
The market's response has been relatively measured despite the conflict, with prices only rising about 8% since Israel's initial air campaign against Iran's nuclear facilities. Former Biden energy advisor Amos Hochstein provided key insight, stating, "What the market is seeing is this confidence that Israel can continue this escalation with Iran and the war against Iran without the Iranians being able to do very much in response." The stability is attributed to well-supplied crude markets, with OPEC+ increasing supply and U.S. production maintaining record levels.
Trump Signs Order Confirming Parts of UK-US Tariff Deal
President Donald Trump has signed an executive order implementing portions of the previously agreed UK-US tariff deal, marking a significant development in bilateral trade relations. The agreement notably reduces tariffs on UK cars entering the US market, setting a quota of 100,000 vehicles at a 10% tariff rate, down from the previous 25%. This represents a crucial win for British automakers, with Mike Hawes of the Society of Motor Manufacturers and Traders calling it "a huge reassurance" to the sector.
However, the deal's implementation has raised some concerns, particularly regarding steel tariffs and agricultural quotas. While the original agreement suggested the removal of steel tariffs, the signed order doesn't specify these terms, leaving uncertainty for UK steel manufacturers. The deal also includes controversial provisions such as a tariff-free quota of 1.4 billion liters of US ethanol and increased quotas for US beef imports, prompting concerns from domestic producers like ABF Sugar, whose chief executive Paul Kenward warned, "A lot is at stake here, not just in the short-term but the long-term."
Nvidia to Attend China Supply-Chain Expo in July for the First Time
U.S. chipmaker Nvidia will participate in the China International Supply Chain Expo in Beijing from July 16 to 20, marking its first appearance at the event, according to Chinese state broadcaster CCTV. The expo, now in its third year, will host over 230 new participants and is considered a key opportunity for foreign firms to show ongoing commitment to China, even amid rising geopolitical tensions and U.S. export restrictions targeting advanced chip technologies.
Nvidia, a leader in AI chip manufacturing, has been grappling with shrinking market share in China due to tightening U.S. trade controls. Despite escalating trade friction, U.S. companies remain significantly represented, comprising the largest group of foreign participants at this year’s event—a 15% increase from 2024. While the expo rarely results in major deals, it serves as a platform for diplomatic and economic signaling, with previous high-profile endorsements such as a speech by Chinese Premier Li Qiang emphasizing the resilience of China's supply chains.
OpenAI Wins $200 Million U.S. Defense Contract
OpenAI has secured a significant one-year contract worth $200 million with the U.S. Department of Defense, marking a major step in the company's engagement with national security initiatives. The contract, awarded to OpenAI Public Sector LLC, will focus on developing prototype frontier AI capabilities for both warfighting and enterprise domains, with most work taking place in the Washington, D.C. area.
The agreement falls under a new initiative called OpenAI for Government, which includes the existing ChatGPT Gov product. The company will help transform administrative operations, improve healthcare services for service members and their families, and enhance cybersecurity measures. OpenAI CEO Sam Altman expressed his commitment to national security, stating, "We have to and are proud to and really want to engage in national security areas." This contract represents a small portion of OpenAI's revenue, as the company currently generates over $10 billion in annualized sales.
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