Markets Mixed as Trade Optimism Offsets Earnings Volatility and Tariff Uncertainty

Index Update:  U.S. stock futures were mixed on Thursday as investors weighed tech earnings against evolving trade policies. While S&P 500 and Nasdaq futures edged higher, Dow futures dropped by 200 points. Alphabet shares rose 4% after strong earnings and a $10 billion AI investment plan, whereas Tesla fell 7% following disappointing results and warnings of challenging quarters ahead. Trade developments also influenced sentiment, with the U.S. and EU nearing a deal to reduce tariffs to 15%, while President Trump signaled broader tariffs of 15% to 50% on other countries starting in August.

Market Movers:  On Wednesday, the top gainers were Anebulo Pharmaceuticals, Inc (+81.97%), followed by Connexa Sports Technologies Inc (+73.76%). On the contrary INVO Fertility, Inc. (-24.86%) and Aether Holdings, Inc (-23.95%) declined the most the same day.

Commodities Update:  WTI crude oil futures climbed toward $66 per barrel and Brent rose above $69, snapping a four-day losing streak, as sentiment improved on progress toward a US-EU trade deal that would impose a 15% tariff on EU goods—mirroring a recent US-Japan agreement. This optimism helped ease concerns over prolonged trade tensions that could hurt global oil demand. Supporting prices further, EIA data showed a larger-than-expected drop in US crude inventories by 3.2 million barrels, signaling strong demand. Gasoline stockpiles also declined, while distillate inventories saw an increase. Gold prices fell below $3,380 per ounce, extending recent losses as risk appetite returned amid signs of easing global trade tensions. The potential US-EU deal, which would avoid harsher tariffs, reduced the metal’s appeal as a safe-haven asset. While optimism over trade persists, caution remains with unresolved negotiations involving countries like South Korea and India. Additionally, investors are closely watching next week’s Fed meeting, where interest rates are expected to remain steady, with possible cuts anticipated later this year.

Macro Update:  U.S. building permits fell slightly by 0.1% in June 2025 to an annualized rate of 1.393 million, with single-family permits down 3.7% to 866,000, while multi-family permits rose 7.9% to 477,000. Regionally, permits dropped in the Northeast and West but increased in the South and Midwest. President Trump announced that new U.S. tariffs will start at a minimum of 15%, potentially reaching up to 50% for countries without favorable trade relations. Speaking at an AI summit, he emphasized a shift to a simpler, more aggressive tariff system targeting most trading partners. While Japan secured a reduced 15% tariff by agreeing to U.S. terms, other nations like South Korea, India, and the EU are still negotiating to avoid higher duties. Trump highlighted ongoing “serious” talks with the EU as part of broader efforts to streamline trade policy.

Dollar Commentary:  The U.S. dollar index fell toward 97 on Thursday, nearing a three-week low, as improving trade relations boosted rival currencies. Progress in U.S. trade talks with the EU, Japan, and China lifted market sentiment, supporting gains in the euro, yen, and other risk-sensitive assets. Meanwhile, the Fed is expected to stay cautious on rate cuts amid inflation concerns tied to potential tariffs.

Bonds Commentary:  The U.S. 10-year Treasury yield held steady at 4.39% as concerns about Fed leadership eased after Treasury Secretary Bessent confirmed Fed Chair Powell would remain in his role despite criticism from President Trump. Markets now focus on next week’s Fed meeting, where rates are expected to stay unchanged. Improved trade sentiment, including progress on a US-EU deal and a likely extension of the US-China tariff truce, reduced demand for safe-haven assets.

Futures Update:  U.S. stock futures remained largely unchanged as investors weighed corporate earnings alongside encouraging signs of progress in global trade negotiations. Wall Street’s major indexes had previously climbed, with the S&P 500 hitting another record high and the Nasdaq Composite surpassing 21,000 for the first time. Optimism was fueled by reports of advancing trade talks between the U.S. and EU, as well as a recent agreement with Japan, both involving proposed 15% tariffs. These developments have helped reduce market concerns over the uncertainty surrounding upcoming U.S. tariff measures.

Stocks mostly advanced during Wednesday's trading session, with major averages moving higher after ending Tuesday on a mixed note. The boost followed President Trump’s announcement of a trade deal with Japan and the Philippines. The S&P 500 rose by 49.27 points, or 0.78%, closing at 6,358.90. From a technical standpoint, after a period of consolidation, prices are beginning to trend upward, indicating the potential for further gains. The 14-period Relative Strength Index (RSI) showing overbought levels, suggesting caution is warranted at current prices. Nonetheless, key moving averages are still well below current levels, offering support if volatility increases. Important support levels are around 6,266, with resistance likely near 6,444.