New York morning: focus on Trump's trade policy and jobs data

Daily review and forecast of events on the US stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Contradictory statements from the US president continue to shape the uncertainty around the foreign trade agenda. Donald Trump has made it clear that he does not intend to reconsider the timing of import duties, and also admits raising them for Japan from the current 10% to 30-35%. At the same time, the White House team is increasingly leaning toward smaller agreements with individual countries to meet the July 9 deadline and mitigate the negative effect of the return of maximum rates on import tariffs.  

The main publication on the macroeconomic calendar this Wednesday will be ADP employment data for June. The consensus is for an increase in the number of new jobs by 97 thousand against 37 thousand a month earlier. The report will be an important benchmark for assessing the state of the labor market before tomorrow's report of the Ministry of Labor, which includes information on new job openings outside of agriculture;

Reporting before the main session opens on July 2 will be Constellation Brands (STZ).   

According to data compiled by Bloomberg, Tesla (TSLA) sold approximately 389,400 vehicles in the second calendar quarter. 

Futures on US indices are trading in a slight plus. We assess the balance of risks as neutral with moderate volatility. We forecast the S&P 500 to move in the range of 6150-6260 points (from -0.8% to +1% to the closing level of the previous trading session);

- Major U.S. banks announced dividend increases and new buyback programs after successfully passing the Federal Reserve's stress tests. JPMorgan Chase (JPM) will increase its quarterly dividend to $1.5 per share and implement a $50 billion buyback program. Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS) and Citigroup (C) also announced an increase in the share of profits distributed to shareholders. The management of financial corporations notes high resilience of the banking system and support for updated approaches to stress testing. 

- Intel (INTC) CEO Lip-Bu Tan is planning a transformation of the foundry business that involves, among other things, abandoning the promotion of the 18A process to external customers and focusing on the more promising 14A technology. The implementation of this plan could result in major write-downs, but will potentially open the door to attracting customers such as Apple and Nvidia. The adoption of this strategy will be discussed at the July board meeting. 

- Lockheed Martin (LMT) has awarded the Pentagon a ten-year contract worth up to $3 billion to maintain the Aegis system.  

- Centene (CNC) withdrew its earnings forecast amid revised health insurance market data and expects EPS to fall to $2.75. The company warned of possible additional losses after data from seven more states. Against this backdrop, CNC shares plunged 23% after the close of the main session. 

July 1 trading on the U.S. markets ended mixed. S&P 500 declined by 0.11%, Nasdaq 100 fell by 0.89%, while Dow Jones and Russell 2000 added 0.91% and 0.94% respectively. Leading the gains was the raw materials sector (XLB: +2.59%), while high-tech companies (XLK: -0.89%) were outsiders due to pressure on the semiconductor segment. The main part of the "Magnificent Seven" closed in the negative. Particularly pronounced negative dynamics showed shares of Tesla (TSLA: -5.34%) and Nvidia (NVDA: -2.97%). Quotes of Apple (AAPL: +1.29%) grew.  

The key political event was the Senate's approval of the sweeping package of tax breaks and government spending cuts (Big Beautiful Bill) proposed by the Trump administration. Despite the minimal margin of votes (51-50) with the deciding vote of Vice President J.D. Vance, the further fate of the document remains in question, as the House of Representatives is still discussing amendments to the bill;

JOLTS data for May recorded an increase in job openings to 7.77 million from the consensus of 7.3 million. Thus, the labor market remains robust, although the hiring rate declined. ISM's manufacturing business activity index (PMI) came in at 49 points in June against a forecast of 49.1, signaling a continued downturn in the sector. The new orders reading fell to 46.4 points and prices remain elevated, supporting inflationary risks. Meanwhile, S&P Global's industrial PMI for June unexpectedly rose to 52.9 points, indicating some recovery in the sector. 

Fed Chairman Jerome Powell's speech at the conference in Sintra was expected to contain no new signals for the market. The head of the regulator confirmed that the current policy remains moderately restrictive, a cautious approach to its adjustment will remain, and changes will depend on incoming macro data. At the same time, Powell noted that he does not rule out easing the MPC as early as in July, but prefers to wait for more certainty regarding the dynamics of inflation and the state of the labor market;

- The strong growth of Las Vegas Sands (LVS: +8.9%) quotations was driven by the publication of data on gross revenue growth in Macau by 19.1% YoY, which was better than average forecasts;

- Shares of Packaging Corporation of America (PKG: +7.6%) reacted positively to news that it is buying Greif's container business for $1.8 billion in cash. The deal is expected to close at the end of the third quarter;

- The sale of a large stake in Warner Bros. Discovery (WBD: -4.5%) has put pressure on their quotations. Shareholder Advance/Newhouse sells 100 million equity securities at $10.97 per unit. 

- Coinbase (COIN: -4.3%) ended the session lower, driven by the announcement of subsidiary Ault Markets' (GPUS) plans to launch a global decentralized crypto exchange in the U.S. in 2026.

This article was AI-translated and verified by a human editor