Futures Hold Steady as Markets Balance Tech Cycle and Tariff Uncertainty

Where Are Markets Today?

Markets are starting on a guardedly positive footing this morning, with U.S. stock futures flat overall and European futures higher. As of late Tuesday evening, Dow futures gained 9 points, S&P 500 futures rose fractionally, and Nasdaq 100 futures gained 0.1%, reflecting decreased demand for technology following a strong second quarter.

The Dow jumped almost 400 points yesterday in regular trading, while the S&P 500 fell 0.1% and the Nasdaq Composite fell 0.8% as investors rotated out of higher-growth tech stocks. The flat-to-higher start indicates that investors are rebalancing exposure ahead of greater macro clarity. Futures point to a firmer European start: London’s FTSE is seen 0.2% higher, Germany’s DAX 0.4% up, France’s CAC 40 0.5%, and Italy’s FTSE MIB 0.6% higher. It is supported by fresh optimism for possible trade progress in the run-up to the July 9 deadline for Trump’s 90-day tariff exemption. Though no specific breakthroughs have been nailed down, the market is responding to the possibility of extensions or partial agreements. Traders are also parsing dovish-tilting remarks from Fed Chair Jerome Powell, who said the central bank might already have lowered interest rates if not for uncertainty from Trump’s tariffs on trade policy.

There are two conspicuous influences powering this cautious optimism. Investors are also rotating after a Q2 surge spearheaded by the “Magnificent Seven,” with some profit-taking being seen in growth-heavy areas such as tech. The rotation into value and cyclical trades, which perform well in benign rate conditions, is probably helping relative outperformance in European futures, where banks and industrials are an overwhelming proportion. Second, macroeconomic direction still dominates: Powell’s remarks regarding postponed rate cuts thanks to tariffs are dovish by nature yet indicate that inflation threats continue to be anchored to volatile trade events, thereby keeping traders nervous.

The result is a market in transition: digesting past gains, weighing future risks, and waiting for new signals. Though futures trading this morning exhibits resilience, particularly in Europe, investors are still cautious of Washington headline risk, macro surprises from today’s ADP jobs report, and any fresh development on the global trade front. Should momentum gather around less trade tension or more policy direction clarity from either the Fed or ECB, this flat-to-firm positioning could translate into more broad-based market strength. Barring that, markets will be range-bound, optimism cautious.

Overall Index Performance as of 2nd July 2025

• S&P 500: 6,205 (+0.52%)
• Nasdaq Composite: 20,370 (+0.47%)
• Dow Jones Industrial Average: 44,095 (+0.63%)
• Russell 2000: 2,072 (+0.25%) 

The Magnificent Seven and the S&P 500 

The S&P 500 continues to rise, fueled by the concentrated strength of so-called “Magnificent Seven.” Those behemoth tech titans—Apple, Microsoft, Nvidia, Meta, Amazon, Alphabet, and Broadcom—remain the chief drivers of the index’s rise. But under the hood, market breadth is poor: over 60% of Nasdaq members are below their 200-day moving average, indicating a lopsided rally.

Drivers Behind The Markets Move

Atlantic markets are trading cautiously today, responding to a combination of monetary policy expectations, trade policy tensions, and upcoming economic data. Investor attitudes are still defensive, with global equity sentiment influenced by recent developments on both sides of the Atlantic.

1. Trade Policy and Tariff Uncertainty 

President Trump’s insistence that he will not postpone the July 9 tariff deadline and his public skepticism about a deal with Japan have revived trade risk as a market theme. Fears are rising about the possibility of a return to higher tariffs, especially on key sectors such as autos and manufacturing inputs. This uncertainty is challenging investor sentiment, driving a rotation out of high-value technology and into cyclical and defensive trades.

European markets are displaying somewhat more strength, fueled by hopes of some progress on some bilateral trade fronts, but continue to be vulnerable to changes in U.S. trade rhetoric.

2. Hawkish Calm from the Fed

Federal Reserve Chairman Jerome Powell reiterated yesterday that the central bank is not in a rush to lower interest rates because of current uncertainty from trade-driven inflation pressures. His comments suggest that any rate cut will be data-dependent and delayed until clarity is attained. This tempered hopes for near-term policy relief, leading to pressure on rate-sensitive stocks but giving support to the U.S. dollar and treasuries. Equity markets are taking this change in tone on board, with greater emphasis on macro data as the driver of monetary direction.

3. Mixed Macro Signals Ahead of Key Jobs Data 

Labor market statistics continue to be mixed. Job openings are still elevated, a sign of business demand, but other indicators are pointing to a slowing jobs trend. This divergence is creating trepidation ahead of today’s ADP Non-Farm Employment and Friday’s Nonfarm Payrolls. Investors want to see reassurance that the Fed has sufficient cause to change tack, and until clarity on that is on the horizon, market momentum is likely to be unconvincing. A balance of resilience and caution is moving the global indices in a tight trading range.

DIGESTING ECONOMIC DATA

The TRUMP Tweets and Their Implications

The newest round of comments and public statements by ex-President Trump creates a dynamic but precarious landscape for markets, policy, and investor mood. From historic legislation to extemporaneous comments, each holds particular implications across asset classes and the economic landscape at large. First is Senate passage on a razor-thin margin of Trump’s sweeping tax and immigration policy bill—thanks to the tie-breaking vote of Vice President Vance. This gargantuan fiscal package, which pumps $3.3 trillion into the economy, is one of the largest proposed spending overhauls on record. Markets, this bodes the return of fiscal stimulus, with potentially inflationary consequences. Risk assets can be expected to spike in initial response to growth expectations, but longer-term debt sustainability issues and bond market reaction can be expected to unleash volatility, especially in treasuries and commodities.

Equally important is Trump’s tough-on-trade stance. Refusal to “extend the July 9 trading deadline” and outright skepticism over a Japanese deal places tariff risk squarely back in front of worldwide agendas again. Fears of renewed disruption will be priced by markets, particularly in manufacturing, autos, and global supply chains. Tariff revival or acceleration will place cost pressures upwards, slow down industrial production, and possibly resurrect inflation concerns—and therefore determine Fed rate path views. Investors will be looking to see volatility in sectors sensitive to trade policy, and haven flows should find their way to U.S. and Japanese treasuries in short term. Geopolitically, Trump’s declaration of Israel’s 60-day cease-fire deal with Hamas gives energy markets short-term respite as it removes near-term Middle Eastern risk. Oil prices may momentarily retreat on the news, but at most, the cease-fire is shaky, and any collapse would rapidly reverse sentiment. In addition, Trump’s inability to negotiate with Iran diplomatically leaves regional risk premium on the table, particularly with tensions simmering just beneath the surface. Energy traders will continue to price in a higher geopolitical floor under crude prices.

Outside economics, Trump’s more eccentric remarks—hawking DOGE against Elon Musk, launching a perfume company, and political drama in detention facilities—highlight his continued ability to generate headlines and divert attention. Such remarks may not move markets per se but signal a threat that political spectacle will overwhelm policy substance. With the 2025 political cycle now kicking in, market players will struggle to sort carefully through populist rhetoric and policy cues with substance that translates economically. The net effect: increased uncertainty, policy whiplash, and a world in which perception is as valuable as truth.

Growth Outperformance Flags Policy Sensitivity

At Zaye Capital Markets, our analysis of recent economics demonstrates a record 16.3 percentage point outperformance of the S&P 500 Growth Index over its Value counterpart in Q2 2025—the highest such spread ever. Such divergence, higher even than during the 2020 V-shaped rebound, joins the way that markets are pre-empting expected policy responses to shock originating in trade, particularly following 2025’s Tariff Crash. As great as headline equity strength sounds as a plus, underlying impetus appears to be built upon anticipation of monetary accommodation to offset harm from punitive import tariffs—i.e., the 25% levy on Japanese autos.

The size of this growth premium is a function of investor expectation that rate-sensitive growth sectors, or discretionary growth and tech, will gain disproportionately if central banks respond with rate cuts or liquidity additions. History shows that such market dislocations are typically driven by sharp inflection points in monetary policy. With existing dynamics in the yield curve and short-term interest rate futures pricing, the market is signaling a high probability of accommodative pivot—if tariff passthrough inflation expectations can remain contained.

Here, we believe value stocks—especially in industrials, financials, and select consumer staples—selling at unwarranted discounts with asymmetric upside are our target. To find them, analysts must look for those with low implicit import sensitivity, great domestic pricing power, and high dividend coverratios. Regional banks, utilities, and manufacturing companies that are U.S.-centric are deeply undervalued on cash flow stability in a world of rising macro uncertainty. Divergences between growth and value are not sustainable at these levels in the absence of a tested rate-cut cycle, and the current moment is a great time for mean-reversion strategies.

Construction Spending Decline Worsens Housing

At Zaye Capital Markets, we interpret the 0.3% fall in U.S. construction spending in May 2025—lower than expected—as a telling figure in the unfolding drama of economic slowdown. The 0.5% fall in private residential and 0.4% fall in nonresidential activity reflect weakening underlying trends in both home and commercial property construction. The industry is 3.5% below year-earlier levels, a reading that validates the drag of higher mortgage rates and tighter financial conditions. The fall has been most severe in single-family projects, where elevated inventories and cost pressures are locking out new starts.

This is further exacerbated by the Federal Reserve’s decision to leave its policy rate unchanged, pursuing a wait-and-see strategy in a backdrop of heightened tariff uncertainty. Intended to anchor inflation expectations, it slows down capital-heavy sectors like building that are highly responsive to borrowing rates and forward-looking demand proxies. As it slows, it ripples throughout manufacturing, transportation, and materials—each of which closely correlates with project pipelines and local residential housing trends.

We consider mid-cap mortgage-related equities, housing-oriented building products, and home improvement retailers to be underappreciated in the more general sell-off. Strength on the balance sheet, pricing power, and geographic diversification—most significantly to Sun Belt states where demographic tailwinds can continue to support activity—ought to be the focus for analysts. The recent decline does not yet represent a macro trough, but ongoing sector weakness combined with dovish Fed policy underpins our base case for selective positioning in oversold residential value names with compelling cash flows.

Labour Turnover Points To Cautious Confidence Despite Trade Shocks

At Zaye Capital Markets, the modest rise in the U.S. JOLTS quits rate to 2.1% in May 2025 from 2.0% earlier offers subtle evidence of underlying confidence in the labour market. While the rise is not a spike, the fact that employees remain cautiously optimistic about job mobility short of the impending economic headwinds is a note of interest. The context of the previous high of 2.8% during the “Great Resignation” sets the perspective on how the market has cooled, but this recent action suggests labour resilience still exists in pockets, particularly in services and tech-related sectors.

This shift is occurring in the context of increasing uncertainty around U.S. policy direction on trade, specifically a 25% tariff rate for Japanese vehicles, as it has now entered employer agendas and hiring schedules of some significance. The ripple effects—though still not apocalyptic—reshaping sectoral labour contexts, especially manufacturing- and export-specialty sectors, are especially significant as employers respond to potential cost pass-throughs and rebalancing of global demand. Voluntary turnover reports are increasingly relevant to draw out segments provided that wage pressures or job-switch incentives still apply.

Investment-wise, we believe that staffing firms and HR tech providers are maybe mispriced during these uncertain times, particularly those that have mid-market and specialist talent acquisition exposures. The analysts would need to be following real wage growth patterns, vacancy lengths, and sectoral quits dispersion rates in order to identify firms that would be well-placed to benefit from labour turnover. We can also find undervaluation in professional training and credentialing firms, which perform well when labour mobility is rising in transitionary phases of the macro cycle.

Job Openings Surge Defies Slowdown Narrative

In Zaye Capital Markets, the unexpected increase in U.S. job openings to 7.769 million for May 2025—comfortably higher than the 7.3 million that was predicted—speaks to a stronger labour market than consensus economic opinion would have us think. The positive shock, added to an upward revision from 7.39 million, reasserts that hiring demand is structurally intact despite macro challenges in the form of tariffs and the high rates constraining activity. The data go against the received wisdom of a slowing economy and are instead indicative of back-ended hiring cycles rather than evidence of underlying demand weakness.

Historically, these opening swings have been accompanied by labor realignments, rather than collapse. The 2023 Federal Reserve analysis indicated that abrupt pullbacks and subsequent recoveries are more likely to be due to firms ceasing hiring—instead of retrenching outright. With the 2025 rebound tracing out comparable post-pandemic contours, we think the overall figure must be dissected by sector. Recent federal sector mass layoffs—136,621 jobs through April—suggest gains are likely to be in private sectors such as logistics, healthcare tech, and specialist manufacturing, which are scooping up retrenched workers as part of structural realignments.

Undervaluation is found in mid-cap jobs platforms and logistics and infrastructures stocks—especially those employing AI-based matching technologies to combat chronic shortages of skills. Job vacancy rates as a share of unemployment and labour force participation should be scrutinised by analysts as they give more concrete evidence of productive turnover as opposed to distortion. Those firms reskilling workers or absorbing automation are still best-placed to weather recruitment uncertainty, particularly as companies rebalance roles in a trade-sensitive environment.

Manufacturing Pmi Highlights Strong Supply Trends And Risk Of Price Increase

At Zaye Capital Markets, the marginal rise in June 2025 ISM Manufacturing PMI back to 49.0—still below neutral 50 mark—reaffirms U.S. manufacturing is in contraction mode. While a rise over May’s 48.5 suggests stabilization is occurring but at low levels, sub-index breakdown shows more negative underlying trends. Employment dipped to 45.0, and new orders dipped to 46.4, both of which suggest muted demand and ongoing labour tightness. This accords with broader trade-related tensions, particularly as U.S. manufacturing employment continues to absorb the ripples of global upsets and supply chain misalignments.

A more acute concern is the spike in the price paid metric to a 2022 high of 69.7. This unexpected gain defies expectations of moderation in input prices and implies rising inflationary pressure as China’s slowing production continues to be felt. As suppliers experience delays and cost pass-throughs, local manufacturers are increasingly taking on higher raw materials costs at a time when still-weak demand is reluctant to take them up. Collectively, this is a stagflation-lite risk context: slowing production with high input prices.

We see mispricing among consumer staples makers that have exhibited good inventory discipline and pricing power. These companies—especially those with domestic supply chains and limited import exposure—can weather cost spikes without margin squeeze. Producer price indices and input-cost-to-output ratios need to be watched closely by analysts. Specialized packaging, industrial software, and automation-enable companies are undervalued plays that offer cost-saving leverage for a manufacturing complex that is preparing for protracted volatility.

Equity Size Divide And The Momentum SurgE

There is a strong structural divergence in the H1 2025 equity universe at Zaye Capital Markets. Large-cap segments—most significantly Industrials and Communication Services—rose strongly, with momentum strategies yielding 19% in this universe. Mid- and small-cap stocks trailed, reflecting not only capital rotation but a more structural shift in investor demand in the face of continued macro uncertainty. The return of the Momentum factor—unlike its historical volatility, including a 80% drawdown in 2009—points to a behavioural bias towards trend-following strategies in high-quality, liquid names.

Particularly, High Beta equities outperformed within larger caps but posted negative excess returns in mid/smaller caps. Such cap-size asymmetry is consistent with risk allocation theory: larger companies have been more immune to inflation pressure, supply-chain drag, and tail-risk geopolitics. While outperformance of Low Volatility in smaller caps is a sign of investor caution, it further reinforces the theme that stability as much as size is now driving allocation behavior. No longer is the market moving in tandem—investors are actively drawing a line between risk on balance sheet size and scalability axes.

We are witnessing AI-led productivity growth—backed by 25-60% productivity gains in tasks as per Stanford-World Bank reports—priced in incorrectly in big-cap tech and industrials. The structural shift is a margin and operation premium for capital-intensive players. The undervaluation is in analysts’ mid-cap automation facilitators, logistics tech, and digital infrastructure that have been unfairly punished by size-biased flows. With fiscal risks and deficits concerns arising, mid-tier growth stories that are capital-efficient are set to deliver significant upside as dispersion narrows.

Etf Flows Confirm Flight To Large-Cap Safety

At Zaye Capital Markets, the stark $13.28 billion inflow into U.S. large-cap ETFs in the recent week—compared with $6.42 billion and $3.26 billion outflows from mid- and small-cap ETFs—tells a story about the obvious investor shift towards stability. Against economic uncertainty and increasing macro dispersion, large-cap equities are once again taking the role of havens of liquidity. Flows of this sort, consistent with history in risk-off regimes, suggest investors are choosing depth, balance sheet quality, and global revenue exposure. The rotation suggests waning demand for speculative growth and risk tolerance recalibration.

The trend is unfolding in a 10.8% year-to-date fall in the dollar that is boosting global attractiveness of large-cap multinationals with profits translated from overseas that are fueled by currency translation. With the Federal Reserve being increasingly pressured to cut back — particularly with M2 money supply blowing out to a record $21.9 trillion in May 2025 — the equity market is responding to a context of heightened liquidity and selective inflationary stimulus. Large-caps habitually enjoy the benefits of swift increases in monetary aggregates because they are able to absorb capital with ease without distorting valuations.

Mid-cap cyclicals and specialist growth stocks are believed to be underpriced as a result of indiscriminate de-risking. The analysts should be looking at free cash flow yields, domestic demand drivers, and pricing power. Regional fintech, automation service, and leading manufacturing industries will benefit as liquidity conditions untangle and capital flows back to mid-tier innovators. The underlying allocation skew represents fertile ground for contrarian advantage in cash generative, high-quality firms that were left behind in the macro rush to safety.

Texas Manufacturing Costs Flash Early Inflation Warning

At Zaye Capital Markets, the recent acceleration in the Dallas Fed Manufacturing Index’s “prices received” reading—to a new cycle high in June 2025—is deserving of close monitoring. Even with the yet restrained national manufacturing production, Texas manufacturers are clearly on a divergent trajectory. The disconnect between the more rapid growth in prices received and the more restrained growth in prices paid indicates regional firms are able to transfer input cost inflation to end consumers. This phenomenon is especially insightful, as historical data indicate regional price hikes are leading indicators of wider inflationary cycles.

This pricing traction is not only due to demand resiliency but also due to structural cost pressures that result from disruption in trade policy. The Trump administration’s new tariff policy — especially of autos and industrial inputs — is causing friction in supply chains, a trend that has inflationary implications. Data shows that every 10% increase in tariffs adds 2-3% inflation in input costs, squeezing manufacturer margins unless passed through higher selling prices. In Texas, which is both a logistics and energy hub, those disruptions are exacerbated through upstream and midstream industries so that inflation proves more tenacious than national measures suggest.

We believe market mispricings are in play today in regional industrials and logistical companies with built-in pricing power and diversified inputs. The regional inflation spreading in inventory restocking cycles and transport costs are aspects that the analyst has to keep an eye on. Flexible supply chain and localized supply models companies are likely to be the winners. While headline inflation may be appearing benign, the Texas signal warns that cost pressures are building asymmetrically—and equity markets are yet to price in the implications fully.

Trimmed-Mean Inflation Indicates Sticky Core Pressures

The rise in Zaye Capital Markets’ 16% Trimmed-Mean CPI to 3.04% year-on-year in May 2025 is a signpost to a chronic undercurrent of inflation still entrenched in the American economy. While headline inflation normally declined following 2022, such a core metric—built to strip out extreme price movements—yields a more resilient signal, now flashing a warning sign. Its divergence from that of Dallas Fed’s Trimmed Mean PCE, which only reached 2.55% over the same period, signals growing regional divergence and compounds concerns around over-reliance on a single inflation narrative.

This discrepancy between underlying measures of inflation suggests structural heterogeneity between regions and sectors, and may represent an effect of geopolitically inspired shocks such as the late-June Middle East spike. The rise in oil following Iranian turbulence is flowing straight through to transport and energy-sensitive components in the CPI basket and is capable of promoting broader inflation stickiness. The result is a complex one in which underlying pressures risk being underestimated if policy anxiety is too predominantly concentrated in national aggregates or statistically unusual single-month numbers.

Here, we believe inflation-proof stocks—i.e., infrastructure, logistics, and essential services—remain underpriced on a relative basis to their defensive pricing power. Traders should observe trimmed-mean measures alongside forward-looking inflation swaps to derive a sense of the credibility of easing expectations. Businesses with pass-through capacity and low import sensitivity will be capable of outperforming if core inflation surprise persists. The steady climb of the Trimmed-Mean CPI suggests moderation of inflation may prove more elusive than current markets anticipate.

Upcoming Economic Events

ADP Nonfarm Employment Change, ECB President Lagarde Speaks

As markets navigate further inflation worries, unbalanced expansion, and cautious investor attitudes, the economic calendar this week offers two major drivers that will likely reset monetary policy and sector rotation opportunities. With the US labor market and Euro area policy path at the forefront, this week’s statistics and central bank remarks will likely set near-term volatility and investor positioning trajectories.

ADP Employment Change: Nonfarm

The ADP print remains a leading indicator of choice before the official U.S. jobs print. 

• A more-than-anticipated employment change would be interpreted as more evidence of labor market strength—aiding cyclicals and spurring risk appetite. But that then restokes concerns that robust hiring delays Federal Reserve rate cuts and puts more pressure on rate-sensitive growth stocks. 
• A below-anticipated ADP print, meanwhile, sparks recession concerns and relaunches rate-cutting wagers, and ignites a bid in Treasuries and a risk-off sectoral move into names such as utilities and consumer staples. Volatility in equities might rise as markets reshuffled the equation between growth strength and policy accommodation.

ECB President Lagarde Discusses

Lagarde’s remarks will be scrutinised closely for a change in tone during continuing inflation pressures and uncertain Eurozone growth resumption. 

• If she is hawkish—speaking of inflation stickiness or cautioning against pre-emptive easing—expect the euro to be bought back, European shares to decline, and government bond yields to rise, particularly in core economies like Germany. 
• If Lagarde, meanwhile, signals rate cuts or highlights downside growth risks, rate-sensitive European sectors could be bought and positioned to benefit in more accommodative environments. The euro might fall on dovish cues, giving temporary relief to export-sensitive equity segments. 

Collectively, these events represent a twin test of both European and US monetary narratives—and will probably set the tone for cross-asset direction next week.

Stock Market Performance

Markets Recover From April Lows But Underlying Concerns Remain

Moving now into the middle of 2025, U.S. equity markets have seen spectacular reversals of fortune since the 8th of April low. Beneath that, though, persistent drawdowns and pervasive member underperformance mask the fact that the rally is overwhelmingly unbalanced. Capital has moved into leading large-cap members overall, but smaller and more volatile members are still weathering both valuation and liquidity pressures.

Here is a summary of recent index movements:

S&P 500: Leadership Persists, But Depth Trails

S&P 500: +5% YTD | +25% off 4/8/25 low | -19% below YTD high | Avg. member: -24%

The benchmark index has bounced back strongly, +25% since its low in April and +5% year to date. However, -19% peak drop from YTD peak and average member drop of -24% signal continuing narrow leadership—attributable to a handful of mega-caps—while breadth in the broader index remains under stress.

NASDAQ: The euphoric run hides underlying cracks

NASDAQ: +5% YTD | +33% from 4/8/25 low | -24% below YTD peak | Avg. member: -45%

The tech-dominated NASDAQ has staged a stunning +33% rebound to its low, tying the YTD gain of the S&P’s +5%. Underneath that rise is complete weakness: the typical NASDAQ stock is down a massive -45%, and the -24% drop of the index from peak shows just how warped the gains are in a narrowly focused subset of high-momentum names.

Russell 2000: Small-Caps Are Stuck in the Mud

Russell 2000: -2% YTD | +24% since 4/8/25 low | -24% from YTD high | Avg. member: -36 Small-caps are still under pressure despite the +24% runup since April lows. The Russell 2000 is still -2% year-to-date, with a -24% index drawdown and a very wide -36% average member decline. This suggests continuing risk aversion to poor quality balance sheets and more stringent capital conditions.

Dow Jones: Defensive Bias Mitigates The Damage 

Dow Jones: 4% YTD | 17% since 4/8/25 low | -16% since YTD peak | Avg. member: -23% The Dow Jones is still leading its peer indices when it comes to stability. Its +4% YTD reading is accompanied by a less painful -16% peak-to-trough drawdown. However, a -23% average member drop does show that defense sectors were not insulated from volatility, although level of indexing resilience is masking weakening underlying strength.

THE STRONGEST SECTOR IN ALL THESE INDICES

Industrials Lead Year-to-Date Pace, but Info Tech Takes Month’s Crown

Through June 30, 2025, sector distribution of S&P 500 paints a clear leadership picture for both the month and year to-date. While many sectors have been consistent in- and out-of-favor play, Industrials and Information Technology stand out as best bets through longer-term consistency perspectives driven by structural tailwinds, margin improvement, and investor conviction in maintaining growth.

Year-to-Date Leader: Industrials (+12.0%)

Industrials have performed the most strongly YTD in 2025, +12.0% YTD—beating all sectors. The sector has been powered by manufacturing demand recovery, AI-led productivity enhancements, and strong capital expenditure in logistics, automation, and defence. Robust order books and a conducive macro environment have seen it become the YTD sector outperformer.

Month-to-Date Leader: Information Technology (+9.7%) ⚡ Information Technology alone increased +9.7% in June, its best of any industry. Healthy earnings revisions, better enterprise technology spending, and excitement for AI and cloud infrastructure are driving this monthly outperformance. Tech’s scalability and strength are drawing capital in the face of macro volatility.

Honourable Mention: Communication Services (+10.6% YTD | +7.2% MTD)

Communication Services continues to deliver with a +10.6% YTD return and a solid +7.2% monthly gain—the latter putting it in the top tier on that measure. As digital advertising continues back towards growth and platform monetisation also increases, this group is a solid bet for sustained outperformance. Together, these three industries—Industriels, Information Technology, and Communication Services—are supporting equity market resilience amidst otherwise volatile surroundings.

Earnings

EARNINGS: Tuesday, July 1, 2025

• Constellation Brands, Inc. (NYS

Constellation posted Q1 FY2026 results with organic net sales declining 4% to $2.52 billion and EPS of $3.22—short of $2.55 billion and $3.31 expectations, respectively. The biggest cut was the 28% decline in wine and spirits sales, with beer volumes declining 3.3%. Margin pressures were substantial due to a rise in aluminum and marketing costs. The company, however, confirmed full-year guidance on the back of modest share gains in the beer business.

• MSC Industrial Direct (MSM)

MSC recorded a Q3 FY2025 sales of $971.1 million, which decreased 0.8% year-on-year, and adjusted EPS of $1.08 versus $1.33 a year ago. Operating margin was stable at 9.0% (adjusted), which demonstrated good cost discipline despite lower volume. Investors will want to track the company’s automation efforts and pricing efforts as the chief levers to steady revenue in the future.

• National Beverage Corp. (FIZZ)

There were not any new earnings released by National Beverage on July 1st. Earnings due out are scheduled for today, July 2nd, and are covered in today’s following report.

• The Greenbrier Companies, Inc. 

Greenbrier surpassed Q3 FY2025 estimates at revenue of $842.7 million (2.7% year-over-year growth) and earnings per share of $1.86 vs. a consensus of $0.99. Gross margin again came in at around 18%, and EBITDA margins were 15%. Utilization of freight-cars increased to 98%, and it maintained its dividend at a level of $0.32 per share. Strong cash flow and in-line full-year guidance reflect operating discipline and traction.

EARNINGS: Wednesday, July 2, 2025

• National Beverage Corp. (FIZZ

Expected to announce Q4 FY2025 earnings today. Consensus is earnings of around $0.48 per share. Of note will be volume trends in LaCroix and core sparkling brands, pricing vs cost pressures (specifically packaging), and any changes in cash flow or control over inventories.

• UniFirst Corporation (UNF)

Reporting Q4 earnings this afternoon with EPS guidance of around $2.09. Look for uniform rental business demand trends, laundry operation cost control, and margin preservation. Investors will want to track industrial vs. service revenue mix and forward guidance. 

• Kestra Medical Technologies (KMD) 

Expected to announce today. Investors should be listening for updates on product adoption, R&D progress, and any new regulation. Key financial metrics are top-line revenue mix by products and services, margin guidance, and updates in the channels of reimbursement that could impact growth potential.

Stock Market Review – Tuesday, 2nd July 2025

The market is still working through a confusing mix of macro signals, tariff uncertainty, and continued mega-cap tech influence. The market’s continued upbeat tone, despite recent volatility, is due to moderating commodity prices and rising Fed hopes of rate cuts in coming years.

Stock Prices

Economic and Geopolitical Drivers

Investment focus remains firmly on monetary policy and geopolitics. The softening in oil prices helped ease inflation concerns, supporting overall equities. Meanwhile, the market is increasingly factoring in a likelihood of two to three rate cuts throughout the course of the year as Fed officials note that they are still data-dependent with mixed signals coming through both labour and manufacturing updates. Tariff settlement and Middle Eastern issues are still unresolved, supporting heightened volatilities in industrials and energy shares.

The Magnificent Seven and the S&P 500 

The S&P 500 continues to rise, fueled by the concentrated strength of so-called “Magnificent Seven.” Those behemoth tech titans—Apple, Microsoft, Nvidia, Meta, Amazon, Alphabet, and Broadcom—remain the chief drivers of the index’s rise. But under the hood, market breadth is poor: over 60% of Nasdaq members are below their 200-day moving average, indicating a lopsided rally.

This AI-based age is bringing a new generation of theme leaders who reflect the most important layers of next-generation digital stack infrastructure:

• ESL – Storage AI Platform
• PLTR – Enterprise OS for AI
• CRWD – AI Guardian
• $AXON – Public Safety Control Center
• $SNOW – AI Data Liquidity Layer
• $NET – New Age Internet Gatekeeper
• MDB – AI-Powered Applications Database

These firms are reconfiguring investor portfolios with specialized exposure to the build-out of AI infrastructure. The valuations remain elevated, but the story momentum remains attracting institutional capital.

Overall Index Performance as of 2nd July 2025

• S&P 500: 6,205 (+0.52%)
• Nasdaq Composite: 20,370 (+0.47%)
• Dow Jones Industrial Average: 44,095 (+0.63%)
• Russell 2000: 2,072 (+0.25%) 

Markets are directionally positive, but with technical caution in the air, traders’ focus will be on watching breadth measures and sector rotation this week.

Gold Price

Gold is trading between $3,330 and $3,340 per ounce, weakening a touch as traders await today’s ADP Non-Farm Employment and ECB President Lagarde’s speech. The recent weakness is due to a long run on geopolitics and inflation risk, but the metal remains trading at a premium with 2025 average targets increased to $3,215. Attention remains squarely focused on forthcoming policy cues. A soft labour reading or ECB dovish comments today could push gold higher still as rate cuts are increasingly expected. Positive readings, meanwhile, might temporarily contain upside, but underlying support remains firm with overall macro softness.

Trump’s reluctance to further postpone the July 9 deadline for negotiating a trade deal and his signature of a full-fiscal package contribute to political and economic risk, which is supportive of a safe-haven status in gold. The mixed labour data yesterday—indicating ongoing job vacancies but a decelerating trend in overall hiring—also contributes to a perception that the Fed is approaching a policy turn. Senate passage of a multi-trillion-dollar package also contributes to fiscal concerns and deficit anticipations, a scenario that is normally bullish in favour of gold. With such a backdrop, gold is supported by safe-haven inflows, low real yields, and investor risk aversion, keeping it comfortably at the upper end of its trading band.

Oil Prices

Oil is trading around $81 per barrel today, prices wavering to contradictory macroeconomic signals and geopolitics. Oil market players are focused on the implications of further OPEC+ production cuts, drawing down inventories, and global economic resilience—most prominently in U.S. employment marketsto date. Despite yesterday’s ADP-related labour data suggesting weakening, ongoing job openings imply underlying strength, leaving demand forecasts relatively in place. This is offset by forthcoming economic releases, though. A weak ADP Non-Farm Employment Change today or ECB President Lagarde’s presentation of a dovish tone would put oil in the spotlight and reignite growth worries. Better data, however, might affirm demand forecasts and offer short-term support. Players are closely monitoring central bank rhetoric for any suggestion of rate changes that would shift consumption patterns and refinery output.

Meanwhile, intensifying trade rhetoric from ex-President Trump—a denial of an extension of a July 9 tariff deadline and fresh criticism of US-Japan talks—has injected volatility into energy markets. Such actions contribute to uncertainty over global supply chains and possible retaliatory measures that can strangle oil flows and affect prices. His broader legislative agenda, such as the omnibus tax and immigration bill, brings fiscal stimulus levels that can feed into inflation and longer-run energy demand. Trump’s declaration of a short-term Israel-Hamas cease-fire, while reducing near-term Middle East supply risk, does little to ease the underlying instability in the region and contributes to geopolitical risk. More broadly, oil prices remain between macroeconomic crosswinds and political uncertainty—forcing investors to remain tactical as fundamentals continue to shift.

Bitcoin Prices

The crypto trades at $105,874, a slight drop from its intra-day high of $107,218, as markets rebalance between competing macro and political backdrops. The recent institutional developments—MicroStrategy’s massive $106,801-per-BTC buy that saw it bring its holdings to nearly 600k BTC, Fidelity increasing its crypto exposure, and Jack’s efforts towards decentralized mining via OCEAN—signal accelerating institutional adoption and maturity in infrastructure. These, and continuous demand for spot Bitcoin ETFs, support a narrative of Bitcoin as a strategic asset that is supporting upside strength in a backdrop of macro uncertainty.

President Trump’s recent activities—a sweeping fiscal/tariff bill, hard 9th of July trade deadline, and establishment of a national Bitcoin reserve—are introducing volatility but also enhancing structural rationale behind Bitcoin. Those policy moves are complimenting thematic tailwinds of broader fiscal expansion and diminishing regulation risk. Yesterday’s data releases—highlighting firm job openings and tepid labour trend—add to market anticipations of a protracted cycle of Fed rate cuts, keeping real yields low and underpinning risk asset such as Bitcoin. All that notwithstanding, any dovish direction out of today’s ADP jobs print or ECB chatter might further energize crypto markets, while a hawkish surprise is likely to see temporary profit-taking.

ETH Prices

Ethereum is trading at approximately $2,417, down slightly from intraday highs of almost $2,487. Institutional buying has been very active over recent days, with over 106,000 ETH deposited and approximately $283 million in inflows via spot Ethereum ETFs. The market remains neutral, though, due to recent whale activity. Data from on-chain shows a whale moving 95,313 ETH to exchanges, triggering short-term selling concerns. Despite that, there have been continuous bullish whales—SharpLink Gaming, as an example, has just purchased 3,877 ETH worth approximately $9.4 million, showing continuous strategic buying.

In the future, ETH inflows into Ethereum ETFs reflect underlying institutional bullishness that would underpin prices near the key support levels. Whales are indeed transferring ETH to exchanges—potentially to tap liquidity or hedge—and others are clearly positioning themselves for medium-term profits. With nearly 35 million ETH staked and rising developer and network action, the underlying fundamentals remain in place. As long as ETF demand continues and whale action is driven more by accumulation and not liquidation, Ethereum can revisit the $2,500 resistance level again. A widespread whale sell-off wave or macro shocks could temper bullish sentiment over the near term, though.