🔔 Opening Bell: Trump Threatens Japan with Tariff up to 35% as Deadline Looms
Good Morning!
On Tuesday, the S&P 500 closed at 6,198.01, up 0.17%, while the NASDAQ was down 0.42%, closing at 20,181.74. The Dow Jones Industrial Average closed the session at 44,494.94, up 0.98%.
Crypto Highlights
Bitcoin (BTC): Currently trading at $107,749.01, up 1.22% over the past 24 hours.
Ethereum (ETH): Gained 0.60%, trading at $2,449.34 per coin.
Ripple (XRP): Fell 0.02% in the last 24 hours, now trading at $2.18 per coin.
Solana (SOL): Up 1.08%, now priced at $149.08.
Earnings Today
There are no significant earnings announcements scheduled for today.
Headlines
Trump Threatens Japan with Tariff up to 35% as Deadline Looms
President Donald Trump has escalated trade tensions with Japan by threatening to impose tariffs of up to 35% if no deal is reached before the July 9 deadline. This would mark a significant increase from the current 10% levy that was temporarily reduced from 24% during a 90-day negotiation period announced on "Liberation Day" (April 2). The situation has become more complex as Trump expressed doubts about reaching an agreement, stating "I'm not sure we're going to make a deal. I doubt it."
The trade dispute has particularly focused on agricultural imports, with Trump criticizing Japan's rice import policies despite their reported shortage. Japan's officials, including Deputy Chief Cabinet Secretary Kazuhiko Aoki, have remained diplomatic by declining to comment directly on Trump's threats, while Chief Cabinet Secretary Yoshimasa Hayashi has maintained a firm stance on protecting Japanese farmers' interests. Currently, Japanese exports to the US face varying tariffs: 10% on most goods, 25% on vehicles and parts, and 50% on steel and aluminum, with the UK being the only country to have successfully negotiated a new trade agreement during the tariff pause period.
US Pauses Some Munitions Shipments to Ukraine, Including Air Defense Missiles
The Trump administration has implemented a pause on certain weapons shipments to Ukraine, including critical air defense missiles, following a comprehensive review of military spending and foreign support. The decision, approved by Defense Secretary Pete Hegseth, comes at a particularly challenging time for Ukraine as it faces intensifying Russian aerial attacks. White House Deputy Press Secretary Anna Kelly emphasized that the decision was made "to put America's interests first."
The pause in weapons transfers has significant implications for Ukraine's defense capabilities, particularly as the country has been heavily reliant on US-made Patriot air defense systems. With approximately half a dozen such systems in operation, protecting millions of civilians from Russian missiles, the suspension raises concerns about Ukraine's ability to maintain its air defense infrastructure. The decision marks a notable shift in US support, as Europe has recently surpassed the United States in total military aid to Ukraine, contributing 72 billion Euros compared to the US's 65 billion Euros, according to the Kiel Institute for the World Economy.
Private Sector Jobs Show Unexpected Decline in June, ADP Reports
In an unexpected turn of events, private sector employment contracted in June 2025, marking the first decrease since March 2023, according to ADP's latest report. The private sector shed 33,000 jobs, significantly missing economists' expectations of a 100,000 job increase, as forecasted by Dow Jones.
The service sector bore the brunt of the decline, with professional and business services losing 56,000 jobs and health/education sectors dropping 52,000 positions. ADP's chief economist Nela Richardson noted, "Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month." While larger companies showed resilience with firms employing over 500 workers adding 30,000 jobs, smaller businesses with fewer than 20 employees struggled, losing 29,000 positions.
U.S. Auto Sales Plummet Following Pre-Tariffs Panic Buying: 'The Party Is Over'
The U.S. automotive market is experiencing significant turbulence as the annualized selling rate dropped dramatically to 15 million vehicles in June, down from 17.6 million in April. This decline follows a brief surge in spring sales when consumers rushed to dealerships ahead of anticipated price increases due to new tariffs. The market's sudden downturn reflects the combined impact of rising tariffs, soaring prices, and growing economic uncertainty, with the average new car cost reaching $48,799 in June—a 28% increase from 2019 levels.
The situation has prompted stark warnings from industry experts, with Jonathan Smoke, chief economist at Cox Automotive Inc., delivering the sobering assessment that "The party is over." The impact of Trump's 25% tariffs on imported vehicles and auto parts is expected to further strain the market, with AlixPartners predicting that automakers will transfer about 80% of these costs to consumers, potentially raising vehicle prices by nearly $2,000 per car. Consumer response to these challenges is evident in financing trends, with more buyers extending loan terms to 84 months, now representing 12% of all auto financing—a three-percentage-point increase from the previous year.
Mortgage Refinance Demand Surges as Interest Rates Drop Further
The mortgage market experienced a shift last week as interest rates fell to their lowest level since April, triggering a notable increase in refinancing activity. The average 30-year fixed-rate mortgage decreased to 6.79% from 6.88%, resulting in a 7% weekly surge in refinance applications, marking a 40% increase compared to the same period last year.
Joel Kan, MBA's vice president and deputy chief economist, noted the significant impact on refinancing, stating "This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications." However, the purchase market remained relatively stagnant, with mortgage applications for home purchases increasing by just 0.1% for the week, reflecting ongoing market uncertainty despite lower rates.
Trump's Tariffs Kept Fed from Cutting Rates, Jerome Powell Says
Federal Reserve Chair Jerome Powell revealed that President Trump's trade policies and tariffs significantly impacted the central bank's monetary decisions during his presidency. In a candid interview, Powell explained how the trade war with China and resulting tariffs created economic uncertainties that prevented the Fed from implementing desired interest rate cuts.
"The trade war with China and other trade tensions created a situation where we actually would have cut earlier and faster, but we were constantly looking at what turned out to be a series of false dawns," Powell stated during the interview. This revelation provides new insight into how geopolitical decisions and trade policies directly influenced America's monetary policy during a crucial economic period.
US Banks Announce Big Shareholder Payouts as Fed Eases Stress Tests
Major US banks are set to return capital to shareholders following the Federal Reserve's decision to ease its annual stress test requirements. The nation's largest financial institutions, including JPMorgan Chase, Bank of America, and Wells Fargo, have announced substantial dividend increases and share buyback programs, demonstrating their strong capital positions and financial resilience.
The Federal Reserve's more lenient approach to stress testing this year has enabled banks to maintain higher capital distributions while still ensuring financial stability. Jamie Dimon, CEO of JPMorgan Chase, stated: "Our fortress balance sheet and earnings power allow us to continuously invest in our company while returning capital to our shareholders." The increased payouts reflect the banking sector's recovery from recent regional banking turmoil and their ability to maintain robust capital levels despite economic uncertainties.
U.S. Job Openings Rise to 7.8 Million in May, Showing Labor Market Resilience
U.S. employers posted 7.8 million job openings in May, up from 7.4 million in April, defying expectations of a decline to 7.3 million. The unexpected increase signals continued resilience in the American labor market despite high borrowing costs and economic policy uncertainty. While hotels, restaurants and finance companies reported increased vacancies, federal government openings fell to their lowest level since May 2020, likely due to President Trump's hiring freeze.
The JOLTS report revealed mixed signals, with quits rising modestly and layoffs declining, suggesting worker confidence. However, overall hiring decreased in May, indicating employer caution amid economic uncertainty. As noted by Nancy Vanden Houten of Oxford Economics: "Hiring remains depressed, but that is less worrisome than it would be otherwise because layoffs continue to be low." The job market has notably cooled from its post-pandemic peak of 12.1 million openings in March 2022, reflecting the impact of Federal Reserve rate hikes and trade policy uncertainties.
Minimum Wage Increasing in Over a Dozen Cities and 3 States on July 1
A wave of minimum wage increases is set to take effect on July 1, 2025, impacting workers across multiple jurisdictions in the United States. The changes will affect three states - Alaska, California, and Oregon - along with numerous cities and local municipalities. According to the National Employment Law Project, nearly two dozen states, cities, and local municipalities will implement some form of minimum wage increase.
The most notable changes include Alaska's increase from $11.73 to $13 per hour (part of a plan to reach $15 by 2027), California's healthcare worker wage boost up to $24 per hour, and Oregon's tiered increases based on location. Additionally, several cities are implementing significant raises, with some like Tukwila, Washington, reaching as high as $21.10 for certain businesses. The Economic Policy Institute estimates that more than 880,000 workers across Alaska, Oregon, and Washington, D.C. will benefit from these wage increases.
Clean Energy Stocks Rise After Senate Removes Solar and Wind Tax
Renewable energy stocks experienced an uptick after the Senate's decision to remove a controversial tax on solar and wind projects from the One Big Beautiful Bill Act. Notable gains were seen across the sector, with NextEra Energy, the largest U.S. renewables developer, rising about 5%, while the benchmark Invesco Solar ETF gained 2.9%.
The legislation, which now heads to the House of Representatives, still includes provisions to phase out clean electricity investment and production tax credits for wind and solar projects. Abigail Ross Hopper, CEO of SEIA, expressed serious concerns about the bill's impact, stating, "This legislation undermines the very foundation of America's manufacturing comeback and global energy leadership." The American Clean Power Association had previously warned that the removed tax would have added up to $7 billion to the solar and wind industry's tax burden.
Elon Musk Wants to Create a New Political Party: Building Rockets May Be Easier
In a bold political move, Elon Musk has announced plans to form the "America party" following his disappointment with President Donald Trump and the proposed domestic policy bill. The Tesla and SpaceX CEO, known for his technological achievements, aims to establish a fiscally conservative party that would challenge the current two-party system, which he refers to as the "uniparty" due to rising government deficits under both Democratic and Republican leadership.
However, experts highlight significant challenges in establishing a third party in the American political landscape. As Emory University political science professor Alan Abramowitz notes, "Third-party movements in the US have generally arisen out of some sort of set of deep-seated grievances. It was not just some wealthy person who's decided they wanted to start a third party." The endeavor faces substantial legal and financial hurdles, including strict donation limits, complex state ballot access requirements, and the challenge of convincing both candidates and voters to abandon the established two-party system.
Qantas Says $6 Million Airline Tickets Were Sold in 15 Minutes
In a remarkable display of pent-up travel demand, Qantas Airways witnessed an extraordinary sales surge as travelers rushed to secure discounted international flights. The Australian flagship carrier managed to sell $6 million worth of tickets in just 15 minutes during a flash sale, demonstrating the robust recovery in the aviation sector.
Qantas Executive Manager of Sales and Distribution, Igor Kwiatkowski, highlighted the significance of this achievement, stating "The response to our flash sale has been phenomenal and shows just how eager people are to travel internationally again. We've seen particularly strong demand for flights to London, Los Angeles, and Singapore." The sale's success underscores the airline industry's resilience and suggests a promising outlook for international travel recovery.
138-Year-Old Grocery Store Staple Files for Bankruptcy
Del Monte Foods, a historic 138-year-old company renowned for its canned fruits and vegetables, has voluntarily filed for Chapter 11 bankruptcy protection while actively seeking a buyer. The company has secured $912.5 million in new funding to maintain operations during its peak canning season, though it faces liabilities estimated between $1 billion and $10 billion.
The company's challenges stem from shifting consumer preferences and macroeconomic pressures, as noted by CEO Greg Longstreet: "After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods." The bankruptcy filing reflects broader industry challenges, including consumers' movement away from preserved foods toward healthier alternatives and increased preference for private label products.
Google AI Pummeling News Sites as Traffic Dips Across the Board
Major US news websites are experiencing traffic declines following Google's implementation of its AI search features last year. According to SimilarWeb data, 37 of the top 50 news domains saw year-over-year traffic reductions after Google's AI Overviews launch in May. The impact has been particularly severe for some prominent publishers, with Forbes and HuffPost experiencing 40% traffic losses, while DailyMail.com and CNN.com saw decreases of 32% and 28% respectively.
The situation has raised serious concerns within the news industry, with Danielle Coffey, President and CEO of News/Media Alliance, stating: "The data absolutely shows the new AI products Google has announced are affecting news publishers' traffic. On top of all the SEO changes that have decreased traffic recently in traditional search, this is certain to negatively impact our ability to invest in quality journalism." While Google maintains that AI Overviews enhance user experience and denies responsibility for the traffic decline, the data shows that click-through rates for top organic results on queries triggering AI Overviews have dropped dramatically from 7.3% to 2.6% between March 2024 and March 2025.
Amazon Deploys Its 1 Millionth Robot, Releases Generative AI Model
Amazon has achieved a new milestone in its automation journey by deploying its one millionth robot to a fulfillment facility in Japan, marking a dramatic evolution since its initial robotics venture in 2012 with the Kiva Systems acquisition. This achievement puts the company on track to have an equal number of robots and human workers in its warehouses, with robots currently assisting in 75% of Amazon's global deliveries.
In conjunction with this milestone, Amazon has unveiled DeepFleet, a new generative AI model designed to enhance warehouse robot coordination. Developed using Amazon SageMaker, this AI solution promises to boost robotic fleet efficiency by 10%. The company's commitment to robotics innovation is further demonstrated by recent developments, including the introduction of Vulcan, a sophisticated two-armed robot with touch-sensing capabilities, and the launch of "next-generation fulfillment centers" that feature 10 times more robots than current facilities.
Constellation Brands Reports Lower Earnings as Aluminum Tariffs and Weak Demand Hit Profits
Constellation Brands, the maker of popular Mexican beer imports like Corona and Modelo Especial, faced significant headwinds in their first quarter of fiscal 2026, reporting earnings and revenue below Wall Street's expectations. The company posted adjusted earnings of $3.22 per share against an expected $3.31, while revenue came in at $2.52 billion, missing the projected $2.55 billion mark. The disappointing results were primarily attributed to increased aluminum tariffs and softening consumer demand.
Despite these challenges, CEO Bill Newlands maintained a confident outlook, though acknowledging the impact of "non-structural socioeconomic factors" on sales. The company's beer business, which represents approximately 80% of total revenue, saw shipment volumes decline by 3.3%. Notably, the company's stock has already declined more than 20% this year due to concerns over tariff impacts, though Constellation maintains its full-year fiscal 2026 guidance, expecting comparable earnings per share of $12.60 to $12.90.
Figma Moves Closer to a Blockbuster IPO That Could Raise $1.5B
Design software company Figma has taken a step toward its initial public offering by publicly sharing its impressive financial records. The company demonstrated strong performance with $749 million in revenue for 2024, representing a 48% increase from the previous year, and continued growth into 2025 with 46% year-over-year growth in Q1. With a remarkable 91% gross margin and rolling 12-month revenue of $821 million, Renaissance Capital estimates the IPO could raise up to $1.5 billion, potentially matching CoreWeave's position as the largest tech IPO of 2025.
The S-1 filing reveals interesting details about the company's structure and future outlook, with CEO Dylan Field controlling approximately 75% of voting rights. While the company acknowledges potential risks from emerging AI competitors, Figma maintains a strong market position with its own AI products. As stated in their regulatory document: "While we have made, and expect to continue to make, significant investments to integrate AI, including generative AI, into our platform, AI technologies are rapidly evolving and there can be no guarantee that our products will remain competitive as new AI technologies are developed."
Public Companies Outpace ETFs in Bitcoin Buying for Third Straight Quarter
Corporate treasuries have demonstrated their growing appetite for Bitcoin, outpacing ETF acquisitions for the third consecutive quarter in a significant market trend. Public companies increased their Bitcoin holdings by 18% with approximately 131,000 coins in Q2, while ETFs showed a more modest 8% growth with 111,000 BTC during the same period.
The surge in corporate Bitcoin adoption reflects a shifting regulatory landscape under the Trump administration, with notable developments including Trump's executive order for a U.S. Bitcoin reserve. As noted by Nick Marie, head of research at Ecoinometrics: "The institutional buyer who is getting exposure to bitcoin through the ETFs are not buying for the same reason as those public companies who are basically trying to accumulate bitcoin to increase shareholder value at the end of the day." Strategy (formerly MicroStrategy) remains the dominant player with approximately 597,000 BTC, while new entrants like GameStop and KindlyMD join the growing list of over 140 public companies globally implementing Bitcoin treasury strategies.
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