Introduction#
According to Monexa AI’s closing tape, U.S. equities climbed for a third straight session on Thursday, pushing the S&P 500 to 6,141.01 and within a whisker of a new intraday record. The advance was powered by another broad-based melt-up in large-cap technology, a resurgence in energy shares, and a late-day bid into cyclicals once Washington signalled flexibility on the July 9 tariff deadline. Overnight, traders digested upbeat Asian and European sessions, fresh headlines on a potential extension of U.S.-EU tariff negotiations, and a slate of central-bank sound-bites that kept rate-cut hopes alive ahead of this morning’s Personal Consumption Expenditures (PCE) inflation release.
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Market Overview#
Yesterday’s Close Recap#
| Ticker | Closing Price | Price Change | % Change |
|---|---|---|---|
| ^SPX | 6,141.01 | +48.86 | +0.80% |
| ^DJI | 43,386.84 | +404.41 | +0.94% |
| ^IXIC | 20,167.91 | +194.36 | +0.97% |
| ^NYA | 20,235.33 | +147.88 | +0.74% |
| ^RVX | 22.11 | −0.23 | −1.03% |
| ^VIX | 16.14 | −0.45 | −2.71% |
The Dow Jones Industrial Average logged a 400-point rally, its best single-day point gain in nearly a month, while the NASDAQ Composite eked out a fresh closing high as large-cap chipmakers and cloud infrastructure names extended their June rebound. Volatility measures slipped to six-week lows; the CBOE Volatility Index (VIX) finished at 16.14, underscoring complacency ahead of key macro data.
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Tariff Tensions And AI Tailwinds Take Center Stage Ahead Of The July 9 Open
Wall Street eyes tariff deadlines and surging AI demand as futures price a cautious open. Energy leads, financials lag, and earnings season looms.
Tariffs, AI Chips And Utility Surge Shape Tuesday’s Open
U.S. futures tread water as tariff deadlines shift, Utilities lead defensives, and AI chip news swirls around IBM and Nvidia ahead of Tuesday’s opening bell.
Tariff tensions and tech momentum set tone ahead of Monday’s open
Tech strength pushes U.S. indices to fresh highs, but tariffs, VIX pop, and Musk’s new ‘America Party’ temper Monday’s pre-bell mood.
Investors cited three principal drivers: firmer crude-oil prices that sparked rotation into exploration and midstream plays; a second straight day of upbeat earnings beats from mid-cap industrials; and mounting optimism that today’s PCE print will confirm the disinflationary trend implied by May’s CPI and PPI releases.
Overnight Developments#
Asia kicked off the global risk rally after Shanghai traders cheered headlines suggesting “constructive” progress in U.S.–China trade discussions. The CSI 300 closed up +1.4%, its best session in two weeks. In Europe, the Stoxx 600 added +0.7% by midday after ECB Vice-President Luis de Guindos echoed Wednesday’s Sintra comments, stressing the eurozone is “on track” to meet the 2% inflation goal.
On the policy front, Fed Chair Jerome Powell maintained his data-dependent stance at an Atlanta Fed forum, but traders noted his remark that “the last mile of disinflation is proving less bumpy than feared.” Rate-futures now price roughly 46 bp of cumulative easing this year, up from 42 bp 24 hours earlier.
Macro Analysis#
Economic Indicators to Watch#
The May PCE Price Index (08:30 ET) is the marquee release. Consensus compiled by Bloomberg calls for a headline rise of +0.1% m/m and +2.6% y/y; the core is seen up +0.2% m/m and +2.6% y/y. A print at or below those levels would reinforce the notion that Q2 inflation risks remain contained, emboldening the market’s September cut narrative.
At 10:00 ET, the University of Michigan’s final June Consumer Sentiment revision will offer a real-time pulse on household inflation expectations. Fed voters Austan Goolsbee and John Williams speak after the bell; traders will parse any colour on balance-sheet strategy or long-term neutral-rate estimates.
Global & Geopolitical Factors#
Tariff risk remains a slow-burn variable. The White House hinted that the July 9 deadline for a potential 50% levy on EU imports is “not critical,” soothing fears of an immediate escalation. Meanwhile, reports of bipartisan support for extended rooftop-solar tax credits gave the renewable-energy complex fresh life and appeared to be the catalyst behind the +12.83% surge in ENPH yesterday.
Elsewhere, oil traders are monitoring the Iran backdrop after officials suggested negotiations could reopen on sanctions relief. Brent sits near $87 a barrel, up almost +9% month-to-date, adding a tail-wind to U.S. energy earnings estimates.
Sector Analysis#
Sector Performance Table#
| Sector | % Change (Close) |
|---|---|
| Financial Services | +1.67% |
| Communication Services | +1.57% |
| Technology | +1.09% |
| Energy | +1.07% |
| Industrials | +1.03% |
| Utilities | +1.01% |
| Basic Materials | +0.75% |
| Healthcare | +0.29% |
| Consumer Cyclical | +0.26% |
| Consumer Defensive | −1.82% |
| Real Estate | −3.61% |
The leadership baton shifted toward Energy, Technology, and Basic Materials. Enphase’s double-digit pop anchored a renewable-plus-oil duality: legacy E&Ps like APA tacked on +3.65%, while midstream operator WMB jumped +3.59% after pricing a $1.5 billion bond offering barely five basis points inside talk—evidence of healthy appetite for balance-sheet expansion.
Technology posted its sixth gain in seven sessions. Server-maker SMCI advanced +5.71% on the heels of a $2.3 billion convertible offering that instantly upsized on hot demand, signalling institutional comfort with growth-capex dilution. ANET and DELL each added more than +4.5% as buyside desks chased anything linked to AI-driven data-center build-outs.
Real Estate lagged sharply, dragged lower by a −9.56% slide in hyperscale REIT EQIX after sell-side chatter about elevated power-rate renegotiations. The move illustrates ongoing duration risk for highly levered REITs in a still-restrictive rate climate.
Company-Specific Insights#
Earnings and Key Movers#
Chipmaker MU delivered the headline of the session, posting adjusted EPS of $1.91 versus the $1.59 whisper and guiding fiscal Q4 revenue to $10.7 billion (±$300 million)—a cool 9% ahead of consensus. Yet shares slipped −0.98% as traders booked profits into a 34% year-to-date run and weighed management’s caution on PC-and-mobile demand. Importantly, management flagged a near-50% sequential jump in High-Bandwidth Memory sales, bolstering the bullish AI narrative.
Industrial tech name AYI smashed projections with a $5.12 EPS print and an 8% revenue surprise, powering the stock +5.81%. Management highlighted double-digit order growth in intelligent-building solutions, hinting at a demand inflection as corporate capex pivots from cost savings to productivity upgrades.
Specialty-chemicals maker FUL rallied +10.78% after lifting full-year guidance on margin expansion. Meanwhile, WBA edged up +0.62% even as EPS fell 40% y/y, signalling the market is already discounting retail-pharmacy headwinds ahead of its $10 billion take-private.
In consumer staples, MKC overcame tariff worries, gaining +5.34% on flat but better-than-feared adjusted EPS. Management said it has “line of sight” to fully mitigating tariff-driven agricultural-input inflation in 2025, a data point reinforcing margin-defensive pricing power in essential categories.
Among cyclicals, cruise operator RCL climbed +4.06% as booking curves extended into late 2026, while ABNB added +3.12% on reports of record summer occupancy rates. Conversely, TSLA slipped −0.54% amid chatter of further EV-subsidy cuts in key European markets.
Unusual Option Activity and Flows#
Options desks flagged heavy call buying in UBER after The New York Times revealed founder Travis Kalanick is courting investors—potentially including Uber itself—to acquire Pony.ai’s U.S. unit. Thirty-day implied volatility popped six points yet remains below the 70th percentile, implying room for further premium expansion should a deal crystalise.
Separately, block trades in July 130 calls on DELL printed at three times open interest, suggesting speculation that the company’s Infrastructure Solutions Group will snag incremental AI-server share when June quarter data rolls out.
Extended Analysis#
Cross-Asset Signals#
Treasuries were steady overnight with the 10-year note anchoring near 4.28%, down almost 20 bp from the mid-June highs. The benign rate backdrop is cushioning equity valuations in duration-heavy corners such as cloud software and semi-capital equipment.
In commodities, copper’s +6.85% surge in FCX shares mirrored LME spot’s breakout above $9,700/t on Chinese restocking chatter. The move reinforces a constructive stance toward Basic Materials, particularly miners with low incremental capacity costs.
Valuation Check-Up#
The forward S&P 500 P/E stands just above 21.5×, roughly one turn richer than the five-year average but still 80 bp inside the early-2024 peak. Markets are effectively pricing two rate cuts by December and mid-teens EPS growth through 2026. Any upside surprise in today’s PCE figure or hawkish Fed language could compress multiples quickest in profitless tech; however, elevated sector correlations—currently one standard deviation above the 10-year mean, per SocGen—indicate the broader tape would feel any valuation squeeze.
What Could Change the Narrative#
- A hotter-than-expected core PCE print above +0.3% m/m would likely nudge September cut expectations off the table and test equity resilience.
- A breakdown in tariff negotiations could revive stagflation fears, particularly for Consumer Defensive names lacking pricing elasticity.
- Faster-than-forecast AI data-center capex has the opposite effect—reinforcing the bull case that current multiples understate semiconductor-cycle duration.
Conclusion#
Morning Recap and Outlook#
Futures sit marginally higher heading into the open, extending Thursday’s momentum as traders place their chips on a friendly PCE print and a Powell doctrine that “good things happen slowly; bad things don’t have to happen at all.” Energy leadership, robust semi earnings, and improving breadth point to a still-constructive risk backdrop. Yet with volatility scraping multi-month lows and sector correlations elevated, the bar for a macro disappointment is low.
Investors should keep an eye on
– The 08:30 ET PCE release for confirmation—or refutation—of the disinflation trend.
– Post-data Treasury reaction; a repricing toward 4.35% on the 10-year could stall rate-sensitive groups.
– Guidance commentary from the raft of mid-cap industrial conferences next week, which will either validate or temper the reflationary bid in cyclicals.
Key Takeaways: equities are flirting with records because AI-linked capex and energy demand continue to deliver tangible earnings beats; Real Estate and Consumer Defensive caution remind us that micro dispersion remains high; and today’s PCE and Fed rhetoric form a binary catalyst that could either cement a summer melt-up or prompt a tactical volatility spike. Positioning into the weekend favours maintaining exposure to high-quality AI infrastructure names like MU and cash-rich energy producers, while keeping dry powder should inflation surprise to the upside.