The announcement of a 35% tariff on Canadian imports, the indication that EU will be getting a tariff letter, and the president's acclamation that most trading partners will face a 15% to 20% tariff rate triggered the market's worst open this week. The initial selling, however, did not persist. The mega-cap stocks led a rebound from the opening lows and helped the indices settle into a sideways drift below their unchanged lines for the majority of the session.

The market has been generally unphased by tariff headlines over the past week; sure, there were days with some early session profit taking, but these were often on the heels of strong closings.

The setback to begin today's trading reflected the understanding that Canada and the EU are more economically consequential trading partners than many of the countries that have received tariff letters over the past two weeks. That point notwithstanding, the market retained a generally resilient posture, much like it did throughout the week.

The recovery from the opening lows was largely attributed to some mega-caps shaking off a slow start, including a 1.3% intraday climb by NVIDIA (NVDA 164.88, +0.78, +0.5%).

Additionally, mega-cap support from Amazon (AMZN 225.02, +2.76, +1.2%) and Tesla (TSLA 313.51, +3.64, +1.2%) helped the consumer discretionary sector (+0.3%) finish as one of just two sectors that ended the day in positive territory. That's not to say that mega-caps outperformed ubiquitously, as the Vanguard Mega Cap Growth ETF (-0.2) barely outpaced the S&P 500 (-0.3%).

Declines today were spread across stocks of all sizes and nearly all sectors, with the energy sector (+0.4%) being the only sector with a vast majority of its components capturing gains.

The tariff headlines ultimately prompted some broad-based profit taking in front of a week of market-moving information next week that will include the June CPI, PPI, and Retail Sales reports, and earnings results from many of the largest banks.

U.S. Treasuries were under pressure throughout today's trade, as tariff concerns had the market on its heels, beginning in the overnight trade. Today saw the more inflation-sensitive back end of the curve underperform, rounding out a week of curve-steepening action. The front end was undercut by some ruminations that all the announcements of higher tariff rates starting August 1 could leave the Fed in a sticky wait-and-see mode.

Reviewing today's data:

• The Treasury Budget for June showed a surprising surplus of $27.0 billion (Briefing.com consensus: -$257.5B) compared to a deficit of $71.0 billion in the same period a year ago. The June surplus resulted from receipts ($526 billion) exceeding outlays ($499 billion). The Treasury Budget data are not seasonally adjusted, so the June surplus cannot be compared to the May deficit of $315.7 billion.
  • The key takeaway from the report is that it showed an actual surplus, with receipts exceeding outlays. The good news is that the deficit over the last 12 months shrunk from $1.994 trillion in May to $1.896 trillion in June. The bad news is that the deficit over the last 12 months is still $1.896 trillion

[BRIEFING.COM] The market has a fresh wave of macro-related headlines to digest during the final hour of trading.

Bloomberg reports that the U.S. and India are in talks to strike a trade deal that will lower the tariff on Indian imports below 20%.

Meanwhile, Chicago Fed President Austan Goolsbee (voting FOMC member) says recent tariff threats could delay rate cuts, in an interview with The Wall Street Journal. 

Treasury yields were elevated today. The 10-year note yield settled up seven basis points at 4.42% (+8 bps for the week).

The major averages currently trade within a relatively tight range that is above their early lows but still within negative territory for the day. 

[BRIEFING.COM] The major averages approach their best levels of the day, with the S&P 500 showing a modest loss of 0.2%.

The consumer discretionary sector (+0.5%) has gained steam, now challenging the energy sector (+0.6%) as the best performer on a day when most sectors are in negative territory.

Mega-cap performance has contributed to the consumer discretionary sector's move this afternoon, with its two largest components, Amazon (AMZN 226.05, +3.79, +1.7%) and Tesla (TSLA 312.24, +2.37, +0.8%), among its best performers. 

The Vanguard Mega Cap Growth ETF holds a modest gain of 0.2%.

Separately, Politico is reporting that the EU is abandoning plans to levy a tax on digital companies, a victory for President Trump and U.S. technology firms.

[BRIEFING.COM] The major averages are still mixed following the release of the June Treasury Budget which hit at the bottom of the hour. Currently, the S&P 500 (-0.26%) is in second place, hovering near HoDs, albeit in a losing effort.

The Treasury Budget for June showed a surplus of $27.0 billion compared to a deficit of $71.0 billion in the same period a year ago. The June surplus resulted from receipts ($526.4 billion) exceeding outlays ($499.4 billion). The Treasury Budget data are not seasonally adjusted so the June surplus cannot be compared to the May deficit of $315.7 billion.

The key takeaway from the report is that it showed an actual surplus, with receipts exceeding outlays. The good news is that the deficit over the last 12 months shrunk from $1.994 trillion in May to $1.896 trillion in June. The bad news is that the deficit over the last 12 months is still $1.896 trillion.

[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.02%) has returned to positive territory over the last half hour.

Gold futures settled $38.30 higher (+1.1%) at $3,364/oz, up then about +0.6% on the week; the advance was driven by escalating trade-war sentiment after President Trump unveiled new tariffs, 35% on Canadian imports, widespread 15-20% duties, and a 50% levy on copper and Brazilian goods to kick in August 1, fueling renewed safe-haven demand. Nonetheless, heightened risk aversion was tempered by a firmer dollar (on track for its strongest weekly rally since February) and surprisingly robust U.S. jobless data, which softened expectations for imminent Fed rate cuts.

Meanwhile, the U.S. Dollar Index is now +0.2% to $97.81.

[BRIEFING.COM] The Dow Jones Industrial Average (-0.63%) is in last place on Friday afternoon, down about 280 points.

A look inside the DJIA shows that Nike (NKE 72.71, -1.91, -2.56%), Visa (V 347.82, -8.06, -2.26%), and Amgen (AMGN 294.97, -5.40, -1.80%) are underperforming.

Meanwhile, Amazon (AMZN 225.63, +3.37, +1.52%) is atop the standings.

The DJIA is poised to end the week -1.87% lower.

Elsewhere, at the top of the hour, Baker Hughes (BKR 40.55, +0.84, +2.12%) announced a weekly U.S. rotary rig count of 537, -2 w/w and -47 yr/yr.

[BRIEFING.COM] The stock market faced some early selling pressure following yesterday's record highs and the announcement of a 35% tariff on Canadian imports effective August 1.

President Trump also remarked in an NBC News interview that most trading partners will face tariffs between 15 and 20%, and that the EU will get a tariff letter today. 

Trade developments have motivated some profit-taking in recent weeks, but the market has been quick to find optimism and show resiliency, which continues to be the case today. The major averages rose off of session lows after White House officials said that USMCA goods will be exempt from the 35% Canadian tariff and that the lower 10% tariff on Canadian energy will remain in place.

In turn, the energy sector (+0.5%) is today's best performer, with a majority of its components sporting modest gains.

Information technology (+0.2%) and consumer discretionary (+0.3%) also outperform, though this is attributed to strength in a few of each sector's mega-cap components. 

Mega-caps hold a slight edge over the broader market, as the Vanguard Mega Cap Growth ETF is unchanged for the day, while the Equal Weight S&P 500 Index is down 0.9%.

Of the eight sectors trading in the red, the health care sector (-1.2%) is the biggest drag, as companies wrestle with the proposed 200% tariff on pharmaceutical imports.

The financials (-1.1%), materials (-1.1%), consumer staples (-0.6%), and utilities (-0.5%) sectors also display losses greater than that of the S&P 500 (-0.3%).

Treasuries are on their lows, with the 10-yr yield rising seven basis points to 4.42%.

The afternoon session will have week-ending implications for the S&P 500 as it started this morning's trade flat for the week. Yesterday's start was also sluggish, but a recovery from early lows propelled the S&P 500 and the Nasdaq Composite to record levels in the afternoon. 

[BRIEFING.COM] The major averages hover near their rebound highs but that still leaves the S&P 500 down 0.3% for the day and down 0.3% for the week.

Seven sectors are on track to record losses for the week, ranging from -0.2% (consumer discretionary) to 2.2% (consumer staples).

On the upside, the technology sector (+0.2%) is up 0.6% for the week while energy (+0.5%) has advanced a solid 2.5% since last Friday's settlement. Crude oil has contributed to this week's strength in the energy sector, having returned to its 200-day moving average (68.49). The energy component is up 2.7% at $68.36/bbl today and up 2.1% for the week.

Treasuries are on their lows with the 10-yr yield rising seven basis points to 4.42%.

[BRIEFING.COM] The Nasdaq Composite (-0.1%) hovers near even footing for the day, while the S&P 500 (-0.4%) and the DJIA (-0.8%) lag.

The technology sector (+0.1%) is hovering above its opening levels due to strength from top component NVIDIA (NVDA 166.62, +2.52, +1.5%). The performance has not translated to other chip stocks, as the PHLX Semiconductor Index is down 0.2%.

CNBC reported that Brazilian President Luiz Incio Lula da Silva said the U.S. does not run a trade deficit with Brazil; he says he will fight for tariffs not to take effect, but if they do go into effect, he will retaliate.

Treasuries remain down, with the 10-year note yield up six basis points at 4.41%. 

[BRIEFING.COM] Nine S&P 500 sectors display early losses, with the index sporting a loss of 0.4%.

The materials sector (-1.1%) is near the bottom of the leaderboard, facing some profit taking in names that are coming off multi-week/multi-month highs. The sector is still up 2.9% for the month versus a 0.9% month-to-date gain in the S&P 500.

There is weak leadership from providers of building materials and chemical names.

Shares of Albemarle (ALB 71.30, -2.97, -4.0%) are falling from their best level since late March after UBS downgraded the stock to Sell from Neutral with a $57 target.

Dow (DOW 29.40, -0.82, -2.3%) has fallen from its best level since mid-June back to its 50-day moving average (28.96).

Freeport-McMoRan (FCX 46.20, -1.00, -2.1%) captured its best closing level since early November after the announcement of a 50% tariff on copper but has since fallen after UBS downgraded the stock to Neutral from Buy with a $57 target. 

[BRIEFING.COM] The major averages are hovering above their session lows, with some optimistic developments around trade with Canada fueling the slight rebound.

The energy sector (+0.3%) leads the way with the majority of its constituents displaying modest gains, while the technology sector (+0.1%) remains in positive territory from the strength of a few larger components.

The health care sector (-1.4%) is the worst performer, as companies wrestle with the possibility of a 200% tariff on pharmaceutical imports.

There is narrow leadership today concentrated among the biggest stocks. Decliners lead advancers by a better than 2-to-1 margin at the NYSE and Nasdaq.

[BRIEFING.COM] The major averages have rebounded slightly from their opening lows, with the S&P 500 now down just 0.3%

White House officials say that USMCA goods (a free trade agreement that replaced NAFTA in 2020) will be exempt from the 35% tariff on Canadian imports. Additionally, the lower 10% tariff on Canadian energy will remain in place. 

The development has the energy sector ticking upwards, with a current gain of 0.2%. 

The technology sector (+0.3%) is also moving in the right direction, with strength from top component NVIDIA (NVDA 167.05, +2.95, +1.8%) leading the way. The move has the tech-heavy Nasdaq Composite unchanged for the day, which maintains its position in positive territory for the week. 

[BRIEFING.COM] The stock market opened lower this morning, with the S&P 500 currently down 0.4%.

Every sector opened in negative territory, though the consumer discretionary sector (+0.1%) now sports a slight gain, due in part to Amazon (AMZN 224.23, +1.97, +0.9%) recouping some of its losses from earlier this week.

The materials (-1.2%), financials (-0.9%), health care (-0.9%), and communication services (-0.8%) outpace the early decline in a market that faces some selling pressure amid tariff announcements with key U.S. trade partners.

Equity futures point to a lower opening this morning after yesterday's trade saw the S&P 500 and the Nasdaq eclipse new all-time highs.

A 35% tariff on Canada and an expected announcement for an EU tariff have stirred the markets this morning, though the market has been largely unphased by similar announcements throughout the week.

Yesterday's open was also on the slower side, before a steady upward tick pushed the major averages to their best levels in the afternoon.

Currently the S&P 500 sits almost flat for the week, needing to add only 5 points to once again capture a new record high.

Equity futures point to a lower opening this morning, as the S&P 500 futures trade 36 points below fair value.

Equity indices in the Asia-Pacific region ended the week on a mixed note. A South Korean official said that the U.S. has demanded that South Korea join an effort to isolate China. Meanwhile, Japan is aiming to resume beef exports to China. A People's Bank of China official has called for $209 bln in stimulus spending to offset the impact of tariffs.

• In economic data:
  • New Zealand's June Business NZ PMI 48.8 (last 47.4)

---Equity Markets---

• Japan's Nikkei: -0.2% (-0.6% for the week)
• Hong Kong's Hang Seng: +0.5% (+0.9% for the week)
• China's Shanghai Composite: UNCH (+1.1% for the week)
• India's Sensex: -0.8% (-1.1% for the week)
• South Korea's Kospi: -0.2% (+4.0% for the week)
• Australia's ASX All Ordinaries: -0.1% (-0.2% for the week)

Major European indices trade in the red amid overall pressure on sentiment after President Trump announced that imports from Canada will be charged a 35% tariff. Expectations for a rate cut from the Bank of England are on the rise after the release of a weak GDP report for May. President Trump is reportedly planning weapons sales to NATO allies that would be then forwarded to Ukraine. European Central Bank policymakers Schnabel and Panetta said that the central bank is in a good position to wait and see before its next policy move.

• In economic data:
  • Germany's June WPI 0.2% m/m, as expected (last -0.3%); 0.9% yr/yr (last 0.4%)
  • U.K.'s May GDP -0.1% m/m (expected 0.1%; last -0.3%); 0.7% yr/yr, as expected (last 1.1%). May Construction Output -0.6% m/m (expected 0.2%; last 0.8%); 1.2% yr/yr (expected 1.7%; last 3.6%). May Industrial Production -0.9% m/m (expected -0.1%; last -0.6%); -0.3% yr/yr (expected 0.1%; last 0.3%). May Manufacturing Production -1.0% m/m (expected -0.1%; last -0.7%); 0.3% yr/yr (expected 0.4%; last 1.3%). May trade deficit GBP21.69 bln (expected deficit of GBP21.10 bln; last deficit of GBP22.42 bln)
  • France's June CPI 0.4% m/m (expected 0.3%; last -0.1%); 1.0% yr/yr (expected 0.9%; last 0.7%)
  • Swiss June SECO Consumer Climate -32 (expected -35; last -37)

---Equity Markets---

• STOXX Europe 600: -1.1% (+1.1% week-to-date)
• Germany's DAX: -1.0% (+1.8% week-to-date)
• U.K.'s FTSE 100: -0.5% (+1.2% week-to-date)
• France's CAC 40: -1.0% (+1.6% week-to-date)
• Italy's FTSE MIB: +1.6% (+3.0% week-to-date)
• Spain's IBEX 35: -1.0% (+0.2% week-to-date)

The stock market is on track for a lower start, with the S&P 500 futures currently trading 34 points below fair value. 

Trade developments largely occupy headlines this morning, as a 35% tariff on Canadian imports was announced, with an EU tariff likely to be announced later today.

The market will also receive the Treasury Budget for June at 14:00 ET.

The stock market is poised for a lower opening following a fresh wave of tariff announcements from President Trump.

Most notably, a 35% tariff on Canadian imports was announced, effective August 1.

President Trump also said in a NBC News phone interview that most trading partners will face a 15-20% tariff, and that the EU will get a tariff letter later today. The president also stated that he will make a "major statement" on Russia on Monday.

The S&P 500 futures are currently trading 35 points below fair value, or a decrease of 0.6%.

Treasuries are also down this morning, with the 10-year note yield up four basis points at 4.39%.

In corporate news:

• AeroVironment (AVAV 245.00, +7.43, +3.1%): Department of Defense ordered a fast tracking of drone production, according to Fox News.
• Levi Strauss (LEVI 21.00, +1.27, +6.4%): beat Q2 expectations, raised its guidance for FY25, and announced a dividend hike.
• Toll Brothers (TOL 121.40, -0.98, -0.8%): company named a new CFO.

Reviewing overnight developments:

• Asian markets ended mixed. Japan's Nikkei -0.2%, Hong Kong's Hang Seng +0.5%, China's Shanghai Composite UNCH
  • In economic data:
    • New Zealand's June Business NZ PMI 48.8 (last 47.4)
  • In news:
    • A South Korean official said that the U.S. has demanded that South Korea join an effort to isolate China
    • Japan is aiming to resume beef exports to China
    • A People's Bank of China official has called for $209 bln in stimulus spending to offset the impact of tariffs
• Major European indices trade in the red. Germany's DAX -1.1%, U.K.'s FTSE -0.6%, France's CAC -1.0%
  • In economic data:
    • Germany's June WPI 0.2% m/m, as expected (last -0.3%); 0.9% yr/yr (last 0.4%)
    • U.K.'s May GDP -0.1% m/m (expected 0.1%; last -0.3%); 0.7% yr/yr, as expected (last 1.1%). May Construction Output -0.6% m/m (expected 0.2%; last 0.8%); 1.2% yr/yr (expected 1.7%; last 3.6%). May Industrial Production -0.9% m/m (expected -0.1%; last -0.6%); -0.3% yr/yr (expected 0.1%; last 0.3%). May Manufacturing Production -1.0% m/m (expected -0.1%; last -0.7%); 0.3% yr/yr (expected 0.4%; last 1.3%). May trade deficit GBP21.69 bln (expected deficit of GBP21.10 bln; last deficit of GBP22.42 bln)
    • France's June CPI 0.4% m/m (expected 0.3%; last -0.1%); 1.0% yr/yr (expected 0.9%; last 0.7%)
    • Swiss June SECO Consumer Climate -32 (expected -35; last -37)
  • In news:
    • Expectations for a rate cut from the Bank of England are on the rise after the release of a weak GDP report for May
    • President Trump is reportedly planning weapons sales to NATO allies that would be then forwarded to Ukraine
    • European Central Bank policymakers Schnabel and Panetta said that the central bank is in a good position to wait and see before its next policy move

[BRIEFING.COM] The stock market rebounded from opening losses, with the S&P 500 and Nasdaq Composite climbing to new record highs in today's session.

Though there was some early selling off yesterday's bullish action, the market displayed a positive growth outlook that was reflected in the outperformance of the small-cap and mid-cap stocks, cyclical sectors, and gains in nine of the 11 S&P 500 sectors.

Small-cap and mid-cap stocks led the recovery from session lows this morning, as did 'other' stocks in the S&P 500. That trend continued throughout the day. The Russell 2000 finished with a gain of 0.5%, as did the S&P Mid Cap 400 . The equal-weighted S&P 500 closed 0.6% higher. The market cap-weighted S&P 500 rose 0.3%.

The Invesco S&P High Beta ETF (+1.3%) outperformed, reflecting a bull market attitude.

While mega-cap stocks started sluggishly, they ultimately held their ground as a cohort. The Vanguard Mega Cap Growth ETF closed unchanged for the day. The mega-cap underperformance largely contributed to the communication services (-0.5%) and information technology sectors (-0.1%) finishing in negative territory.

The consumer discretionary sector (+1.0%) led the other nine sectors, bolstered by leadership from travel names after Delta Air Lines (DAL 56.79, +6.09, +12.0%) beat quarterly expectations and reinstated its guidance for the year. Many airlines had paused their guidance following the tariff announcements in early April.

Additionally, Tesla (TSLA 309.87, +13.99, +4.7%) traded sharply higher amid reports that the company is awaiting approval for a Robotaxi service in San Francisco, while also planning an expansion into Arizona, according to a Bloomberg report. McDonald's (MCD 298.39, +5.37, +1.83%), which jumped on a Goldman Sachs upgrade to Buy from Neutral, also provided some sector support.

U.S. Treasuries finished close to where they settled in yesterday's session. There was some modest selling early today following a sturdy initial jobless claims report that is expected to keep a July rate cut on ice, but there was no follow-through.

Yields started to dip in front of today's $22 billion 30-yr bond auction results at 1:00 p.m. ET, and they continued to move lower in its wake. The auction was met with decent demand, and it concluded a week that saw the market absorb $119 billion in new supply without much problem. That fostered a bit of a relief trade that contributed to the recovery effort, which transpired amid a seeming lack of concern for tariff-induced inflation pressures.

• Nasdaq: +6.8% YTD
• S&P 500: +6.8% YTD
• DJIA: +5.0% YTD
• S&P 400: +2.5% YTD
• Russell 2000: +1.5% YTD

Reviewing today's data:

• Initial jobless claims decreasing by 5,000 for the week ending July 5 to 227,000 (Briefing.com consensus: 245,000). Continuing jobless claims for the week ending June 28 increased by 10,000 to 1.965 million, which is the highest level since November 13, 2021.
  • The key takeaway from the report continues to be that businesses have been slow to let employees go, but that it has become more difficult to find a job after losing one. This dynamic reflects a softening labor market, but not a truly weak labor market.