07/10/2025
A rally in big tech stocks led the broader market to a higher close yesterday, lifting the Nasdaq to an all-time high and helping the market regain most of its losses from earlier in the week.
The Dow rose by 217 to 44,458 led by NVDA at close to four trillion worth and by MSFT, the SPX did very well at 37 points to 6263, just short of its record while the Nasdaq was the day’s hero with a 192 point gain to 20,611 led by the above-two plus other semiconductors like INTC, ADI plus AMZN, META and VRNA.
The Russell 2000 Index of small stocks came along for the upside ride with a 24 point gain to 2252 while the VIX continued to decline down to a very low level of 15.94 and the question is now – how much further down is this one supposed to go before some kind of correction sets in to an overbought market?
NVDA became the first public company to exceed four trillion in value after its share price briefly topped $164 each in the early going. Shares in the AI boom poster child were going for around $14 per share at the start of 2023.
The tech rally came as the market continued to weigh the latest developments in the President’s renewed push this week to use threats of higher tariffs on goods imported into the U.S. in hopes of securing new trade agreements with countries around the globe.
Wednesday was initially set as a deadline by Trump for countries to make deals with the U.S. or face heavy increases in tariffs. But with just only two trade deals announced since April, one with the United Kingdom and one with Vietnam, the window for negotiations has been extended to August 1st.
This latest phase in the White House’s trade war heightens the threat of potentially more severe tariffs that have been hanging over the global economy. Higher taxes on imported goods could hinder economic growth, if not increase recession risks.
On Tuesday, Trump said he would be announcing tariffs on pharmaceutical drugs at a “very, very high rate, like 200%.” He also said he would sign an executive order placing a 50% tariff on copper imports, matching the rates charged on steel and aluminum. Copper prices eased Wednesday after spiking a day earlier.
Analysts predict that companies in the S&P will deliver a combined 5% annual growth in second-quarter earnings, according to FactSet. That would mark the lowest growth rate for the index since the fourth quarter of 2023.
DAL starts off earnings season today, with most analysts expecting the airline’s second-quarter profit to decline from a year ago. Most major carriers have trimmed their flight schedules and decreased their forecasts this year as consumers pull back on travel and other nonessential spending due to uncertainty about how Trump’s tariffs will affect their budgets.
In bond market trading, the yield on the 10-year Treasury slid to 4.34% from 4.40% late Tuesday. The minutes from the last Fed meeting showed continued reluctance to do anything late this month as there is the perception that the committee wants to see what effects the tariff plans have on inflation and economic growth at that time.
Dow component MRK is buying VRNA, a U.K. company that focuses on respiratory diseases, in an approximately $10 billion deal. If approved by Verona shareholders and U.K. officials, MRK will get access to Verona’s chronic obstructive pulmonary disease medication Ohtuvayre.
Earnings this week will see: yesterday - WPP lower and A*Z higher; today – DAL higher and HELE lower; Friday – CAG, WD-40.
Economic reports will have: yesterday - minutes from the last F.O.M.C. meeting (see above); today – weekly jobless claims were 227,000.
Donald M. Selkin
Chief Market Strategist
Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SPIC and provides the Fair Value analysis for CNBC each morning. The commentary provided in this Market Letter is intended to provide our current or potential customers with timely market analysis and should not be considered a research report. This Market Letter may contain, and is limited to discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analysis concerning the demand and supply for a sector, index or industry based on trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current rating; and recommendations regarding increasing or decreasing holdings in particular industries or securities or securities. This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm. This Market Letter contains only news, facts and commentary in information previously reported from a news source believed to be accurate and reliable by the author. These news sources include the following: (Bloomberg Financial, Reuters, and Associated Press); It is possible that at any given point in time, the author, Newbridge Securities, or one or more of its employees or registered individuals associated with Newbridge Securities may hold a position, either long or short, as well as options, bonds or other instruments in the companies mentioned in this report.