Closing Recap (Week Ending July 4th) 

U.S. stocks finished a strong quarter with a flourish, as the S&P 500 and Nasdaq printed fresh all-time highs, driven by growing optimism that trade deals will be reached ahead of a looming tariff deadline, even as the US dollar weakened for a second straight week. 

Key Takeaways 

• New All-Time Highs: The S&P 500 and Nasdaq posted new all-time closing highs, capping a strong Q2 performance driven by large-cap tech stocks. 
• Looming Tariff Deadline: The market’s primary focus is now on the approaching July 9th tariff deadline, with key trade deals with Japan, India, and the EU still unresolved. 
• Strong June Jobs Report: A stronger-than-expected June Nonfarm Payrolls report tempered expectations for an imminent Federal Reserve rate cut. 
• Dollar Weakens, Yields Fall: The US Dollar Index (DXY) fell for the second consecutive week, while the 10-year Treasury yield also declined for the week. 
• Large-Cap vs. Small-Cap Divergence: A key theme is the significant underperformance of small-cap stocks (Russell 2000) compared to the mega-cap-led S&P 500 and Nasdaq. 
• Oil Slips, Gold Rebounds: Crude oil prices fell on expectations of an OPEC+ supply increase and renewed Iran talks. Gold prices rebounded on a weaker dollar and trade policy uncertainty. 
• Bitcoin Momentum Continues: Bitcoin saw positive momentum for the day, week, and month, trading above $108,000. 
• Week Ahead Focus – Key Risk Events: The market is fixated on the July 9th tariff deadline. Other key events include the FOMC Minutes (Wed) and central bank decisions from the RBA (Tue) and RBNZ (Wed). 

Looking Ahead

Looking ahead, the market enters the third quarter fixated on trade policy. The primary driver of sentiment will be the outcome of negotiations as the July 9th tariff deadline arrives. The key question is whether the White House will secure last-minute deals with major partners like the EU and Japan, extend the deadline, or re-impose punitive tariffs. Any setbacks could quickly weigh on the optimistic sentiment that has recently propelled equities. 

Amidst the trade drama, investors will also get key insights into central bank thinking. The minutes from the Fed’s June policy meeting will be released on Wednesday, and will be closely scrutinized for the Committee’s reaction to the strong jobs report and their assessment of the trade-offs between a weakening economy and persistent inflation. Elsewhere, central banks in the Pacific are active, with the Reserve Bank of Australia (RBA) widely expected to cut rates on Tuesday, while the Reserve Bank of New Zealand (RBNZ) is anticipated to hold its policy rate steady on Wednesday. News from the OPEC+ meeting (scheduled for July 5th), where an output hike is expected, will also influence energy markets to start the week.

Market Overview 

U.S. equity markets concluded the second quarter on a high note, with the S&P 500 rallying to fresh all-time highs in the final week of June, fueled by persistent optimism surrounding trade negotiations. Despite foreign investors withdrawing some funds from US equity ETFs recently, the market has been propelled by a “fear of missing out” on the rally since the April tariff-induced lows. This strength, however, highlights a significant market divergence: the rally has been narrowly led by mega-cap technology stocks, pushing the S&P 500 and Nasdaq to new records, while the small-cap Russell 2000 index continues to lag, remaining well below its 2021 peak. 

Index (Cash)	Last Closing Level	Friday’s Change	Friday’s Change (%)
DJ Industrials	43818	431.26	0.0099
S&P 500	6173	31.95	0.0052
Nasdaq (Composite)	20273	105.54	0.0052
Russell 2000	2169	-2.89	-0.0013

The economic backdrop provided a mixed picture. A surprisingly strong June Nonfarm Payrolls report, driven largely by government hiring, led investors to scale back expectations for an aggressive Federal Reserve rate-cutting cycle. This sent the US dollar lower for the second consecutive week and contributed to a weekly decline in Treasury yields. The market’s focus is now almost entirely on the looming July 9th deadline for President Trump’s 90-day tariff pause. While deals have been struck with the UK and Vietnam, and a truce exists with China, major agreements with the EU, Japan, and India remain elusive, creating a tense “race to the finish line” scenario for the week ahead.

Economic Data Calendar (Week of July 7th) 

TUE (Jul 9): 

• US Tariff Deadline: Key deadline for trade deals with major partners. Market focus will be on any announcements from the White House regarding the EU, Japan, India, etc. 
• Reserve Bank of Australia (RBA) Rate Decision: Widely expected to deliver a 25bps rate cut. Focus on Governor Bullock’s forward guidance. 

WED (Jul 10): 

• FOMC Minutes (June Meeting): Details of the Fed’s discussion; watched for clues on the rate path following the strong June jobs report. 
• Reserve Bank of New Zealand (RBNZ) Rate Decision: Expected to keep the cash rate on hold at 3.25%. Focus on whether the bank signals an end to its easing cycle. 

FRI (Jul 12): 

• Canadian Employment Report (June): Labor market data; another lackluster report could increase odds of a BoC rate cut later in the month. 
• Chinese CPI & Inflation Data: (Note: Was listed for previous week, check specific calendar for week). 

Commodities, Currencies, and Treasuries 

Gold prices rebounded last week, settling near $3,335/oz, benefiting from a weakening U.S. dollar and renewed safe-haven demand stemming from uncertainties around the July 9th trade deadline and US fiscal policy. Crude oil prices fell, with WTI settling near $66.35/bbl. The decline was driven by renewed diplomatic signals from Iran, which eased geopolitical risk premiums, and expectations that OPEC+ would announce another supply increase. 

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	66.46	-0.38	USD/bbl
Brent Crude	68.4	-0.40	USD/bbl
Gold (Spot)	3335.24	8.97	USD/oz
EUR/USD	1.17702	0.00011	Rate
USD/JPY	144.412	-0.295	Rate
10-Year Note Yield	0.04328	-0.00012	Yield (%)
Bitcoin	108164	130	USD

The U.S. Dollar Index (DXY) slipped for the second consecutive week, giving back post-jobs report gains as the market refocused on the unpredictable nature of US trade policy. The 10-year U.S. Treasury yield fell for the week, ending around 4.33% as investors digested the mixed economic signals.