Stock Market Update

[BRIEFING.COM] S&P futures vs fair value: -16.00. Nasdaq futures vs fair value: -58.00.

Equity futures are modestly lower this morning following the announcement of a 30% tariff on the EU and Mexico, effective August 1.

The head of the EU's Executive Commission, Ursula von der Leyen, has stated that the EU will refrain from imposing any retaliatory measures until the August deadline in hopes of negotiating a better deal, according to Reuters.

Mexican President Claudia Sheinbaum has also expressed confidence that she can strike a more favorable deal before August, according to Bloomberg. 

The stock market has been resilient in the face of tariff announcements over the past two weeks but has been subject to some softer pockets when the country in question is a close trading partner. Thursday saw the S&P 500 and Nasdaq Composite eclipse new all-time highs, but the market closed lower for the week following the announcement of a 35% tariff on Canada.

Though there are no economic data releases of note today, June CPI numbers will be released on Tuesday, and June PPI numbers come out on Wednesday, which could reflect the impacts of tariffs in relation to inflation.

In corporate news:

• Google (GOOG 180.31, -1.00, -0.6%) plans to pay $2.4 billion for the licensing rights and talent acquisition of Windsurf artificial intelligence, according to Bloomberg
• Meta Platforms (META 715.49, -2.02, -0.3%) aims to acquire PlayAI, as the company continues to invest heavily in the AI space, according to Bloomberg
• Amazon (AMZN 224.97, -0.05, -0.02%): Prime Day 2025 delivers record sales and savings in expanded four-day shopping event
• Boeing (BA 230.01, +3.17, +1.4%): FAA believes Boeing (BA) fuel switch locks are safe, according to Reuters
• CrowdStrike (CRWD 468.90, -9.55, -2.0%): downgraded to Equal Weight from Overweight at Morgan Stanley
• Kenvue (KVUE 22.60, +1.26, +5.9%): announces CEO transition and actions to unlock shareholder value; provides Q2 guidance
• PTC (PTC 183.80, -9.71, -5.0%): indicated lower after Autodesk (ADSK) provided business update saying it is confident in its plans to drive long-term shareholder value
• Tesla (TSLA 317.43, +3.92, +1.3%): CEO Elon Musk says "If it was up to me, Tesla would have invested in xAI long ago. We will have a shareholder vote on the matter."
• Waters (WAT 331.37, -21.54, -6.1%): Company and BD's (BDX) Biosciences & Diagnostic Solutions business to combine

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mixed on Monday, taking in the news that President Trump sent letters to Mexico and the EU indicating their tariff rates will jump to 30% starting August 1 if better trade terms cannot be worked out before then. Japan's Nikkei -0.3%, Hong Kong's Hang Seng +0.3%, China's Shanghai Composite +0.3%.
  • In economic data:
    • China's June exports 5.8% yr/yr (expected 5.0%; last 4.8%) and June imports 1.1% yr/yr (expected 1.3%; last -3.4%); June new loans CNY2240.0B (expected CNY 1960.0B; last CNY620.0B)
    • Japan's May core machinery orders -0.6% m/m (expected -1.4%; last -9.1%); May industrial production -0.1% m/m (expected 0.5%; last -1.1%) and capacity utilization 2.0% (last 1.3%)
    • India's June WPI inflation -0.13% yr/yr (expected 0.52%; last 0.39%); June CPI 2.10% yr/yr (expected 2.50%; last 2.82%)
    • Singapore's Q2 GDP 5.6% qtr/qtr (expected 0.7%; last -0.5%) and 4.3% yr/yr (expected 3.5%; last 4.1%)
  • In news:
    • China's trade data for June was better than expected on the export side, with activity picking up after the U.S. and China committed to a less onerous tariff/trade framework. China's imports also rose for the first time this year. New loan activity in June was also better than expected.
    • NVIDIA CEO Jensen Huang, ahead of his trip to China, tried to temper concerns about China's military using NVIDIA's chips, according to CNBC.
    • Press reports suggest Japan's LDP ruling coalition could lose its majority following the July 20 Upper House elections. There are also press reports highlighting the possibility that the BOJ could raise its FY25 inflation forecast when it meets July 30-31.
• Major European indices are mostly lower after President Trump sent a letter to the EU announcing a 30% tariff rate starting August 1 if better trade terms cannot be worked out before then. Germany's DAX -1.0%, U.K.'s FTSE +0.3%, France's CAC -0.5%.
  • In economic data:
    • Switzerland's June PPI -0.1% m/m (expected 0.2%; last -0.5%) and -0.7% yr/yr (last -0.7%)
  • In news:
    • Losses are relatively contained, as participants cling to the notion that the high tariff rate will be reduced via negotiations; however, Germany's DAX (-1.0%) is a notable underperformer given its export-led economy.
    • European attention has also turned to President Trump's tease that he will be making a significant announcement today with respect to Russia. Reports suggest the president could make offensive-minded weapons made by the U.S. available to Ukraine.