Closing Recap

Monday, July 07, 2025

U.S. stocks finished notably lower for the first time in a while, with the S&P down a little less than 1% from record closing highs for the S&P 500 and Nasdaq, though finished about 30-points off the intraday lows. The day was dominated by trade and tariff headlines ahead of the expected July 9^th deadline initially set by the White House, with new updates on Japan, South Korea, Southeast Asia and headlines on the EU. The S&P posted its biggest one day % decline since the middle of June as markets await several tariff headlines in coming days. There were no major earnings or Fed speakers today, but several key items Wall Street is focusing on this week include: 1) the start of Amazon Prime Day (Tuesday), the ending of 90 day tariff pause on Wednesday along with the U.S. 10-yr Treasury auction and the FOMC prior Meeting Minutes and then on Thursday 7/10, Jobless Claims, the 30-year Treasury auction and Q2 earnings kick off with Delta (DAL) in airlines (big banks not until next week).

Around noon, US stocks declined after President Trump revealed the United States will impose 25% blanket tariffs on imports from Japan and South Korea starting Aug. 1, saying “the tariffs may be modified, upward or downward, depending on our relationship with your country.” The 25% duty threatened in the letters effectively matches the initial reciprocal tariffs Trump briefly imposed on the two countries in April. But the letters extend the deadline for the tariffs to kick in from July 9 to Aug. 1, allowing negotiations to continue. The headlines were enough to keep stocks markets lower. Reuters later reported the EU will not be receiving letter setting out higher tariffs from the United States, citing EU sources. Other confirmed tariff hikes announced this afternoon included: Trump notes U.S. will impose 25% tariff on Malaysia (semi potential impact INTC, TXN, SMCI), U.S. will impose 25% tariffs on Kazakhstan (CVX potential impact), will impose 30% tariff on South Africa, impose 40% tariff on Laos (solar name impact) and 40% tariff on Myanmar. These rates are close to the April 2 rates (suspended on April 9).

Stat of the day: Reuters noted after setting record highs in February, the S&P 500 index collapsed over 20% into its early April trough. The benchmark index has since rocketed and scored fresh record highs in late June. Strength continued into last week. Although still in the early stages of July, bulls note that, on average, it has been one of the market’s better months. Since 1950, with an average gain of 1.28%, July has ranked as the fourth best month of the year. Of note, the S&P 500, which is last up around 0.25% month-to-date, is attempting to rise for an 11th-straight July. The SPX last rose 11 Julys in a row, its longest July win streak in its history, in 1959.

• Gold prices were little changed, settling at $3,342.80 an ounce, bouncing off 1-week lows (was down as much as 1% overnight) as the dollar firmed and traders digested U.S. President Donald Trump’s extension of his July 9 tariff deadline to August 1 and assertion that the U.S. is close to several trade deals. The stronger dollar rose +0.45% vs. a basket of other major currencies and Treasury yields climbed.
• Treasury yields were broadly higher, adding to last week’s gains with the 10-year around 4.4%. A big week of Treasury issuance, with $119B coming up for auction as $58B in 3s on Tuesday, $39B in 10s on Wednesday, and $22B in 30s on Thursday. Gold prices fall as the dollar and Treasury yields rise.

• In Casinos/Gaming: Goldman Sachs initiates on WYNN and CZR at Buy, initiate on LVS ($52 tgt) at Neutral and MGM ($34 tgt) at Sell as they stay cautious due to their large-scale projects not opening until 2030+ and the upcoming capex cycle. Goldman Sachs said lean into casinos with exposure to high quality assets; clear catalyst path; near-to-medium term earnings growth; and strong FCF generation without a daunting capex cycle ahead. Favor Las Vegas and International over Regional. While near-term Las Vegas trends have been muted, see upside for companies exposed to high-end demographics with a focus on key marquee-driven events.

• In Utilities/Nuclear power: PEG was upgraded to Buy from Neutral at UBS and raise PT to $97 from $86 for the combination of consistent utility performance and the potential unlock incremental value through nuclear contracts (said PEG can grow EPS at 6.5-7.0% without the need to issue equity in the 5-year plan). GEV was initiated at a Buy and $614 tgt at UBS noting GEV holds a 35% share of the global gas turbine market—engines that convert energy from burning natural gas into electricity via rotational force. LEU was initiated coverage with an Outperform rating and $205 price target at Northland saying nuclear power is "finally having a moment" after "years of being ignored," who is long-term bullish on the space while initiating SMR with a Market Perform rating and $35 price target.
• In Major Oil & Equipment: big oil stocks slipped (CVX, XOM, COP) after SHEL warned that profits from trading gas and chemicals would be lower than expected in the second quarter. Separately, a decision by OPEC+ to increase output when crude prices are already low isn’t helping. Eight OPEC members said they would lift production by 548,000 barrels a day in August, more than analysts were predicting. Oil prices fell immediately after the OPEC announcement but then pared some of those losses. Reuters reported this weekend that the arbitrators in a legal dispute between XOM and HES have reached a decision related to a major oilfield project in Guyana, according to two sources familiar with the matter, Reuters reported this weekend. The ruling will determine whether CVX can move forward with its $53B planned acquisition of Hess.

• In Brokers & Exchanges: TW reported total trading volume for the month of June 2025 of $52.0 trillion (tn). Average daily volume (ADV) for the month was $2.4tn, an increase of 25.9 percent (%) year-over-year (YoY). For the second quarter of 2025, total trading volume was a record $165.3tn and ADV was a record $2.6tn, an increase of 32.7% YoY; MKTX said surpassed $1 Trillion in total credit quarterly trading volume for the first time; record $2 trillion in total rates volume; 43% Increase in Total Trading ADV in 2Q25 Driven by 22% Increase in Total Credit ADV and 58% Increase in Total Rates ADV.

• In Crypto: CRWV to acquire CORZ in all-stock deal as Core Scientific holders to receive 0.1235 CRWV shares as exchange ratio implies $9B equity value and deal represents $20.40 per share value (CORZ shares fell over -20% attributed to investors’ concern that CoreWeave may trade lower by the time the deal is completed, reducing the effective value of the all-stock transaction); IREN said posted record monthly revenue and hardware profit; 50 EH/s mid-year target achieved; AI Cloud expanded with ~2.4k Blackwell GPUs; $550m convertible notes offering oversubscribed; CLSK released its unaudited Bitcoin mining and operations update for the month ended June 30, 2025 as produced 685 Bitcoin in June and now holds a bitcoin treasury of 12,608 BTC, ranking seventh among all publicly traded companies worldwide; MSTR said during qtr ended June 30, achieved $14.05B unrealized gain on digital assets and its digital asset value at $64.36B as of June 30; FUFU said its Bitcoin production increased 11.3% M/M in June to 445 Bitcoin.

• In Mortgage Insurers: RDN, ESNT, NMIH were all downgraded to Market Perform from Outperform at KBW saying valuations are full. While operating trends for the mortgage insurers (MIs) have remained strong YTD, and KBW expects that to largely continue. However, given the combination of relatively strong performance YTD and lack of near-term positive catalysts, KBW is moving to Market Perform from Outperform.

• COGT shares rise after announcing positive top-line results from the Summit trial of Bezuclastinib in patients with non-advanced systemic mastocytosis.
• HIMS shares slipped early after Truist Card Data trends point to revenues likely in-line to slightly below consensus in Q2. Analysis indicates HIMS’ revenues are likely to come in in-line to slightly below consensus and the firm said they remain cautious as we see risks to HIMS’ 2025 revenue guide.
• JSPR shares tumbled after saying its experimental drug, briquilimab, achieved a complete response at week 12 in an early-stage study to treat a skin condition called chronic spontaneous urticaria; the company says it halted the drug’s asthma trial due to the same drug product lot issue.
• KALV shares rise after the FDA has approved EKTERLY, a novel plasma kallikrein inhibitor, for the treatment of acute attacks of hereditary angioedema in adult and pediatric patients aged 12 years and older. KalVista will launch EKTERLY in the U.S. immediately and physicians can begin writing prescriptions today.
• MBIO shares surge after the FDA granted orphan drug designation to Mustang for MB-101 for the treatment of recurrent diffuse and anaplastic astrocytoma and glioblastoma.
• MOH said it sees Q2 adjusted EPS $5.50, below consensus $6.21, and now expects its full year 2025 adjusted earnings to be in the range of $21.50 to $22.50 per share, reflecting a consolidated pre-tax margin of just under 4%, the low end of its long-term guidance range (est. $24.48); said  the preliminary results were driven by recent market dynamics and off-cycle disclosures from others in the managed health care sector. This preliminary result reflects medical cost pressures in all three lines of business.
• PAHC was upgraded to Overweight from neutral at JP Morgan with the company continuing to deliver strong results and with the integration of the ZTS MFA business exceeding expectations.

• In Aerospace & Defense: CACI was upgraded to outperform from market perform at William Blair saying the IT tech company has underappreciated drone exposure following: 1) this weekend’s passage of the One Big Beautiful Bill Act featuring extensive drone funding, 2) surging drone ecosystem valuations, 3) our Dotted Line tracker analysis indicating CACI is one of the industry’s largest counter-drone system providers.
• In Metals & Mining: RGLD said it will acquire both Sandstorm Gold (GOLD) and Horizon Copper (HNCUF) and reinforce its position as a leading North American gold-focused streaming and royalty company. Royal Gold said it will acquire Canada’s Sandstorm Gold for an equity value of about $3.5 billion. First Mining Gold (FFMGF) said that it will sell its remaining stake in a Newfoundland mining project to Big Ridge Gold in a cash and stock deal (entered into an agreement with Big Ridge Gold to sell its last 20% interest in the Hope Brook Gold Project for 3 million Canadian dollars ($2.2 million) and 7 million Big Ridge shares).
• In Industrials & Materials: in rare earth, MP was downgraded to Hold from Buy at Jefferies saying China’s shift to short-term export licenses for rare earth magnets reduces the risk of near-term shortages. Generator company GNRC shares slipped, snapping its 11-day win streak after topping its 200dma last week of $146.55. ENVX shares bounced after better prelim Q2 revs of $7.5M vs. est. $5.57M

• In Software: CRWD was downgraded from Overweight to Neutral at Piper as shares have encroached on its $505 price objective (both base and bull cases), and it does not foresee a near-term scenario that would meaningfully increase numbers or its terminal multiple (already the highest across its coverage universe). With the recent increase in CRWD, up ~60% in the past 3 months, the enterprise value now exceeds $125B. ADSK was upgraded to Buy from Neutral at DA Davidson (tgt to $375 from $305) saying they now believe the business is on a path to achieve top decile performance given a combination of demonstrated success in growth businesses like ACC and Fusion as well as organizational change supportive of stronger execution.
• In Semi equipment: AMAT was downgraded to Neutral at Redburn saying China’s aim for semiconductor self-sufficiency challenges much of the portfolio and rivals have taken share in its core physical vapor deposition (PVD) business. Similarly, 2026 earnings expectations at ASML (Neutral) are vulnerable. Citigroup raised ests and tgts on AMAT, LRCX, KLAC in semi equipment and believe the group has entered Phase 2 of its sector framework/Citi lifts its 2025/26 WFE outlook to flat/+10% Y/Y from prior -5%/+2% on improving memory outlook and higher AI cloud CAPEX next year.
• Semiconductors were weaker all day, with a handful of names slipping later this afternoon after the White House announced the U.S. will impose 25% tariff on Malaysia; among names in semi space with exposure to Malaysia included INTC with major facilities in Penang and Kulim for chip assembly, testing, and packaging; GlobalFoundries operates facilities in Malaysia, focusing on semiconductor manufacturing and testing; NXPI has manufacturing and testing operations in Malaysia, particularly for automotive and industrial semiconductors. TXN has operations in Malaysia for analog and embedded chip production, with facilities in Kuala Lumpur and Melaka; SMCI also has been expanding its manufacturing capacity in Malaysia.
• In IT Services & Consulting: Capgemini agreed to buy the provider of business process-management technology WNS for $3.3B in cash, offering $76.5 per share, which represents a premium of 17% to the stock’s closing price on Thursday.