Stocks Up Despite Tariff Fears as Fed Minutes Loom

Published as of: July 9, 2025, 9:09 a.m. ET
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The markets | Last price | Change | % change |
---|---|---|---|
S&P 500® index |
6,225.52 |
-4.46 |
-0.07% |
Dow Jones Industrial Average® |
44,240.76 |
-165.60 |
-0.37% |
Nasdaq Composite® |
20,418.46 |
+5.95 |
+0.03% |
10-year Treasury yield |
4.41% |
-0.01 |
-- |
U.S. Dollar Index |
97.62 |
+0.10 |
+0.10% |
Cboe Volatility Index® |
16.17 |
-0.63 |
-3.75% |
WTI Crude Oil |
$68.40 |
+$0.10 |
+0.12% |
Bitcoin |
$109,930 |
+$715 |
+0.65% |
(Wednesday market open) Investors go behind the scenes at the Federal Reserve later today, possibly gaining insight on how policy makers see rates trending in the second half. Fed minutes from the June meeting, due at 2 p.m. ET, come after President Trump said there'd be no changes or extensions to the raft of tariffs announced on countries including South Korea and Japan earlier this week. Even so, stocks ticked higher in early trading as hopes grew that a trade deal with the European Union might be close.
Today also features another closely watched Treasury auction as $39 billion in 10-year notes go on the block. Results should be in by early afternoon around the time the Fed minutes come out. The 3-year note auction yesterday stumbled on lower demand. More signs of soft demand today might send yields higher, possibly hurting stocks, but the benchmark 10-year yield fell to 4.41% this morning.
Though Treasury auctions may seem dry, they're extra important now considering the high level of U.S. debt and anti-U.S. sentiment internationally that's raised questions about foreign demand. "Interest payments on the debt are now the second largest annual expenditure of the federal government," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab. "Will this change the attitude of foreign investors or increase concerns in the bond market generally? Time will tell."
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Three things to watch
- Fed views on labor market won't include latest nonfarm payrolls: The Federal Open Market Committee (FOMC) has mostly voted unanimously on rate moves over the last few years, but today's minutes could help confirm if dissent is brewing. Several policy makers said last month they could see the way toward a July rate cut, but seven said they don't expect any rate cuts at all this year. However, the minutes reflect what officials knew in mid-June before last week's nonfarm payrolls report. The report showed solid jobs growth of 147,000 and a lower unemployment rate of 4.1% but masked some weakness underneath. Services jobs—which often pay less than goods-producing positions—led gains while manufacturing positions fell and jobs rose in the lower-paying leisure and hospitality sectors. Also, labor force participation slipped again. Chances of a July rate cut sank swiftly after the report, but September is still in play and the minutes might help shed light on odds of a cut that month. Separately, but also Fed-related, The Wall Street Journal reported today that White House adviser Kevin Hassett is emerging as a "serious contender" to be next Fed chair. Hassett has recently supported cutting rates.
- Investors remain cautious as market rallies, data shows: The latest Schwab Trading Activity Index™ (STAX) climbed slightly to 40.66 in June, up from a two-year low of 39.68 in May. The index, which analyzes trading activity from millions of Schwab client accounts, showed a rotation away from tech stocks and into the industrial and consumer discretionary sectors. Tech has now seen strong selling by clients almost continuously since late last year and was the biggest net-sell sector on a dollar basis for the fifth straight month. This mainly reflects heavy selling of Nvidia (NVDA) even as shares of the AI chip firm hit all-time highs. This could suggest clients getting nervous and trimming positions into strength. Popular names net-bought in June included Tesla (TSLA), Palantir (PLTR), and Amazon (AMZN), while Microsoft (MSFT) and Coinbase (COIN) joined Nvidia among top net-sells. Overall results suggest clients were looking for some non-tech, lower-beta movers. The drop in Treasury yields during June might have made the industrial sector look more attractive because those companies tend to have a good deal of debt on their balance sheets. In addition, all the talk of onshoring could lead to increased infrastructure investment, also beneficial for the sector.
- S&P 500 earnings growth seen well below first quarter results: Earnings season kicks off in earnest next week with big banks, but Delta Air Lines (DAL) beats them to the gate when it reports tomorrow morning. S&P 500 earnings growth is seen at 5.8% in the second quarter, down sharply from 13.7% in the first quarter, with communication services and info tech leading the way and energy at the rear. "Guidance and earnings surprises will take on heightened importance, as markets remain sensitive to forward-looking commentary, especially amid policy uncertainty and instability related to trade, tariffs, and interest rates," said Schwab Chief Investment Strategist Liz Ann Sonders and Kevin Gordon, director, senior investment strategist, in their earnings season preview. "There is also increased attention being given to stocks of companies that don't meet or beat consensus estimates."
On the move
- Microsoft (MSFT) climbed 0.8% following an upgrade to Outperform from Perform by Oppenheimer, which noted continued strong growth in the Azure cloud business.
- Verona Pharma (VRNA) jumped 20% on news the biotech firm would be acquired by Merck (MRK) in a transaction valued at approximately $10 billion.
- Freeport-McMoran (FCX) added 1.8% as mining stocks got a boost from President Trump's announcement yesterday of 50% tariffs on copper imports. Copper futures hit all-time highs, which helps domestic miners but may hurt companies that depend on imported supplies of the industrial metal.
- Hershey (HSY) was flat early Wednesday but shares fell 3% yesterday after Hershey appointed Kirk Tanner as president and CEO effective Aug. 18 to replace the retiring Michele Buck. Tanner comes over from Wendy's (WEN), where he was CEO.
- Moderna (MRNA) added 0.5% in early trading after a 9% rally yesterday. Shares appeared supported by the budget legislation approved by Congress last week that allows companies to immediately expense their U.S.-based research and development, Barron's reported.
- Intel (INTC) fell 0.5%. Shares rallied more than 7% yesterday, helping the entire chip sector, as Bloomberg reported another 500 layoffs. The company began cutting jobs and reducing operating expenses last spring, with layoffs ultimately expected to affect around 20% of Intel's staff. Microsoft also recently laid off about 9,000 workers. The layoffs in tech come as mega-cap and chip firms spend billions on AI technology.
- Wynn Resorts (WYNN) fell 1.2% after shares were downgraded by Citi to Neutral from Buy. The firm expects Wynn to lose near-term market share in Macau.
- T-Mobile U.S. (TMUS) lost 1.8% in early trading as it got downgraded to Underweight from Sector Weight by KeyBanc, which cited the near-term competitive environment as a headwind.
- Caterpillar (CAT) rose 1.5% as the stock got an upgrade from Melius Research to Buy from Hold, citing an expected data center-driven capacity increase in engines.
- Starbucks (SBUX) jumped 2% ahead of the open on media reports that Starbucks is evaluating bids for a controlling stake in its Starbucks China business, valued at up to $10 billion.
- AES (AES) rose 12.6% as Bloomberg reported the company is exploring strategic options, including a potential sale.
- The benchmark 10-year Treasury note yield fell slightly to 4.41% early. Over the last few weeks, 4.4% has seemed like a "magnet" for the 10-year yield, said Kathy Jones, chief fixed income strategist at Schwab. "The market seems to find some kind of equilibrium there," she added, saying auction demand is likely to remain solid at current yield levels.
- Odds of a July rate cut were less than 5% early Wednesday, according to the CME FedWatch Tool. The likelihood of at least one rate cut by September was 66%.
More insights from Schwab

Washington watch: Learn what the recent budget bill means for investors from a tax, debt ceiling, and mid-term election standpoint in the latest analysis by Michael Townsend, managing director, legislative and regulatory affairs at Schwab. With the budget passed, the next big issue is October's deadline for annual funding of government operations. "A government shutdown in the fall is a real possibility," Townsend said.
" id="body_disclosure--media_disclosure--356571" >Washington watch: Learn what the recent budget bill means for investors from a tax, debt ceiling, and mid-term election standpoint in the latest analysis by Michael Townsend, managing director, legislative and regulatory affairs at Schwab. With the budget passed, the next big issue is October's deadline for annual funding of government operations. "A government shutdown in the fall is a real possibility," Townsend said.
Chart of the day

Data source: NYSE. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
As Delta Air Lines (DAL) prepares to share earnings tomorrow followed by other airlines next week, shares of airline stocks tracked by the NYSE Arca Airline Index (XAL—candlesticks) have rebounded from a dreadful first quarter. The sector is up about 30% since the end of the first quarter despite tariff concerns and signs that foreign travelers are avoiding U.S. trips. Earnings season could provide color on that issue and other such as fuel prices and early holiday travel demand.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.
July 10: Expected earnings from Conagra (CAG), Delta (DAL), and Levi Strauss (LEVI).
July 11: No major earnings or data expected.
July 14: Expected earnings from Fastenal (FAST) and FB Financial (FBK).
July 15: July Consumer Price Index (CPI) and expected earnings from JPMorgan Chase (JPM), Citigroup (C), BlackRock (BLK), Wells Fargo (WFC), Albertsons (ACI), and J.B. Hunt Transport Services (JBHT).
July 16: July Producer Price Index (PPI) and expected earnings from ASML (ASML), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), Alcoa (AA), and United Airlines (UAL).