Newspaper open to market pages by Mike Flippo via Shutterstock
Markets enter the second week of July with the S&P 500 ($SPX) (SPY) digesting the implications of President Trump’s landmark tax-and-spending package signed into law Friday afternoon, while investors brace for a pivotal week featuring the start of earnings season and crucial policy developments. The market faces a complex landscape as Trump’s promised July 9 tariff letters loom, marking the end of his 90-day “Liberation Day” tariff pause with dozens of nations set to learn about additional unilateral trade restrictions. Tesla (TSLA) stock continues to struggle despite better-than-feared Q2 deliveries, trading between its 200-day and 50-day moving averages while facing headwinds from the elimination of U.S. EV credits after September 30 and highly profitable zero emission credits under the new legislation. Meanwhile, Taiwan Semiconductor’s (TSM) upcoming June and Q2 sales figures will provide crucial insights into AI chip demand affecting major customers including Nvidia (NVDA), Broadcom (AVGO), and Apple (AAPL).
Here are 5 things to watch this week in the Market.
Tariff Deadline Drama
Wednesday’s July 9 deadline represents a critical inflection point for global trade policy as President Trump is set to send dozens of letters to foreign nations outlining additional tariffs he plans to impose unilaterally on their goods. This marks the end of the 90-day pause on Trump’s “Liberation Day” tariffs, creating potential for significant market volatility as investors assess the scope and severity of new trade restrictions. The timing coincides with Wednesday’s FOMC meeting minutes release, creating a potentially explosive combination of trade and monetary policy developments. Import-heavy sectors including retail, technology, and consumer goods could see heightened volatility, while companies with significant international exposure may face renewed uncertainty about supply chain costs and global operations. The market’s reaction to these tariff announcements will likely depend on their scope, implementation timeline, and affected trading partners, with particular attention on whether major economies like the EU, Japan, or Mexico face new restrictions.
Fed Minutes and Bond Auction Bonanza
Wednesday brings a double-header of fixed income focus with the FOMC meeting minutes at 2pm followed by Thursday’s 30-year bond auction at 1pm, bookended by Wednesday’s 10-year note auction at 1pm. The Fed minutes will provide crucial insights into policymakers’ thinking about the current interest rate environment, particularly given recent mixed economic signals and ongoing inflation concerns. Market participants will scrutinize the minutes for any hints about future policy direction, especially regarding the Fed’s assessment of labor market strength and price pressures. The bond auctions will test investor appetite for long-term U.S. debt amid the new tax-and-spending legislation and ongoing fiscal concerns. Poor auction results could signal rising borrowing costs and impact rate-sensitive sectors, while strong demand might indicate continued safe-haven flows. The convergence of monetary policy insights and debt market dynamics creates potential for significant moves in treasury yields, impacting everything from mortgage rates to corporate borrowing costs.
Earnings Season Kickoff
Thursday marks the unofficial start of earnings season with Delta Air Lines (DAL) and Conagra Brands (CAG) reporting results, providing early insights into both travel demand and consumer spending patterns. Delta’s results will be closely watched for commentary on domestic and international travel trends, fuel cost impacts, and capacity management amid economic uncertainty. The airline sector has been sensitive to both economic conditions and geopolitical developments, making Delta’s guidance particularly important for assessing consumer discretionary spending. Conagra’s results will offer perspective on food inflation, consumer behavior changes, and the packaged foods industry’s ability to maintain pricing power amid cost pressures. Management commentary from both companies about the remainder of 2025 could set the tone for earnings season expectations, particularly regarding consumer resilience and corporate margin pressure.
Taiwan Semi’s AI Chip Pulse Check
Taiwan Semiconductor Manufacturing’s (TSM) June and Q2 sales figures will provide a critical read on AI chip demand, directly impacting major customers including Nvidia (NVDA), Broadcom (AVGO), and Apple (AAPL). As the world’s largest contract chip manufacturer, TSM’s results serve as a bellwether for global semiconductor demand and the health of the AI infrastructure buildout. Strong numbers could reinforce the AI investment thesis and boost the entire semiconductor ecosystem, while disappointing results might raise questions about demand sustainability and inventory levels. The timing is particularly significant given recent volatility in AI-related stocks and ongoing debates about the pace of AI adoption across industries. TSM’s commentary about capacity utilization, customer demand patterns, and future capital expenditure plans will be scrutinized for insights into the semiconductor cycle’s trajectory.
Tesla’s Autonomous Ambitions Under Pressure
Tesla’s (TSLA) stock continues to face headwinds despite better-than-feared Q2 deliveries, with shares down 2.1% since the limited robotaxi launch in Austin on June 22. The company confronts multiple challenges including a leadership shake-up in the Optimus robot division, reported production delays, and CEO Elon Musk’s renewed feud with President Trump over the budget bill. The elimination of U.S. EV credits after September 30 and highly profitable zero emission credits under the new legislation creates additional pressure on Tesla’s business model. Meanwhile, competitors are gaining ground with Uber (UBER) stock rallying, while Mobileye (MBLY) has surged 30% as investors rotate toward alternative autonomous vehicle plays. Tesla’s ability to demonstrate progress on autonomous driving technology and navigate the changing regulatory landscape will be crucial for maintaining its premium valuation in an increasingly competitive market.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
