7/24/2025 – 10:22 AM

The U.S. stock market has been on a remarkable winning streak, hitting multiple record highs in recent months. But that rally could soon be tested as President Donald Trump’s August 1 tariff deadline draws near. Investors are weighing momentum against mounting risks tied to global trade tensions and expensive stock valuations.

Markets are booming — for now

Six months into Trump’s second term, the stock market looks unstoppable on the surface. The S&P 500 recently closed above 6,300 points for the first time ever, setting its eighth record high this month. Bitcoin has also reached an all-time high, trading above $123,000, while bonds continue a steady rally and oil price volatility has cooled.

It’s a dramatic turnaround from early April, when markets were on edge and the S&P 500 flirted with bear territory after Trump’s first wave of “Liberation Day” tariffs. That drop was followed by one of the strongest post-correction recoveries in U.S. market history.

Investment strategists Liz Ann Sonders and Kevin Gordon at Charles Schwab put it this way: “There is no shortage of things to worry about; but that’s the wall markets often climb.”

Who is driving the rally?

The recent market surge is largely fueled by retail investors — everyday traders — not big institutions. According to Venu Krishna, an equity strategist at Barclays, institutional money remains cautious. He estimates retail investors poured over $50 billion into global stocks just in the last month.

This retail-led buying spree has helped the S&P 500 rise nearly 27% since its April low. The tech-heavy Nasdaq Composite is up 37%, while the smaller Nasdaq 100 has gone 62 straight days without dipping below its 20-day moving average — the second-longest streak in history.

And institutional money may be returning. A July survey by Bank of America showed the largest spike in “risk appetite” ever recorded, with the most bullish investor sentiment since February.

The trade war deadline looms

Despite the upbeat numbers, analysts warn that markets are not immune to shocks — especially if Trump follows through with his August 1 tariff hike.

“The premise that whatever tariff increases come on August 1, they will not be permanent” is what’s keeping markets afloat, said Thierry Wizman, global FX and rates strategist at Macquarie Group.

Investors still believe that Trump’s trade threats are a tactic, not a final plan. “The prospect that ‘deals’ will be struck thereafter remains a factor,” Wizman noted.

But that assumption may be risky. Economists at Capital Economics warn that Trump’s unpredictable trade behavior and ongoing attacks on the Federal Reserve could trigger a market downturn.

Is the market getting too comfortable?

Some strategists say markets may be underestimating the potential fallout from escalating trade tensions. “Tariffs have been very well received,” Trump told NBC News earlier this month, pointing to the market’s recent highs. But others are more cautious.

Megan Horneman, chief investment officer at Verdence Capital Advisors, believes that investor optimism may be masking growing risks. Stocks are now trading at historically high valuations, making them more vulnerable to a correction.

Steve Sosnick, chief strategist at Interactive Brokers, sees the current rally as partly momentum-driven, bolstered by a fear of missing out. “Investors are assuming these tariffs will be postponed, renegotiated or otherwise watered down,” he said. “And if there’s a trade that works well for a long time, they’ll keep doing it.”

Crypto and precious metals join the action

Bitcoin has surged alongside the stock market, peaking above $123,000 as Republican lawmakers advanced legislation to regulate cryptocurrency. As of Tuesday, it was trading around $119,000.

Meanwhile, gold and silver have continued to perform strongly, rising 30% and 35% respectively this year. Both have served as safe-haven hedges amid Trump’s volatile trade policies.

The U.S. dollar has not fared as well. The dollar index, which measures its value against six major currencies, has dropped nearly 11% since Trump returned to office.

What happens next?

With markets perched near record highs and Trump’s August 1 tariff deadline fast approaching, the big question is whether Wall Street will blink.

Ethan Harris, former Bank of America economist, said Trump’s trade pattern is clear: “Trump always tries again,” he wrote on LinkedIn. “His aggressive announcements are a way to test what he can get away with.”

As Harris put it, the real test is whether the stock market will become a “trade war vigilante” — pushing back against Trump’s plans — or remain complacent.

Summary:
The stock market has defied trade turmoil and global uncertainty to post massive gains this year. But with Trump’s August 1 tariff deadline approaching, that momentum could soon hit a wall. Stay tuned for how Wall Street reacts — and whether the rally still has room to run.

Want more updates on market moves and trade news? Follow our blog and share your thoughts in the comments.

Source: CNN – The stock market is on a hot streak. It’s about to face a huge test

The post Stock market rally faces tariff test amid Trump’s trade war threats appeared first on Journos News - Breaking News, World News, Top Stories, Todays Headlines and Flash Reports.

Wall Street took a sharp dive Wednesday, weighed down by climbing Treasury yields and growing worries about the U.S. government’s rising debt. After a six-day winning streak, the major indexes stumbled again, signaling renewed investor caution.

The S&P 500 dropped 1.6%, the Dow Jones Industrial Average fell nearly 2% (losing 816 points), and the Nasdaq slipped 1.4%. Early in the day, stocks had only dipped slightly, reacting to mixed profit forecasts from retailers like Target amid ongoing uncertainty around President Donald Trump’s trade policies. But the mood darkened after the U.S. Treasury auctioned $16 billion in 20-year bonds, offering a yield as high as 5.047% to attract buyers.

This move pushed yields higher across the board, including on the closely watched 10-year Treasury note, which jumped from 4.48% Tuesday to 4.59% Wednesday—up significantly from 4.01% just last month. Jonathan Krinsky, chief market technician at BTIG, noted that “bonds finally appear to be getting equities’ attention,” especially as the 30-year Treasury yield surged back above 5%, nearing its highest level since 2023.

The rising yields reflect worries over massive potential tax cuts in Washington, which could add trillions to the national debt. Inflation concerns fueled by Trump’s tariffs also continue to unsettle investors.

This trend isn’t limited to the U.S.; yields on government bonds across developed countries are climbing as governments borrow more and central banks like the Federal Reserve reduce their bond holdings.

Higher Treasury yields have broad effects: They can push up borrowing costs for consumers and businesses—from mortgages to credit cards—potentially slowing economic growth. Meanwhile, higher yields make stocks and other investments less attractive, leading investors to pull back.

Adding to the pressure, Moody’s became the last of the major credit rating agencies to downgrade the U.S. government’s credit rating last week, citing debt sustainability concerns. Bank of America strategists called the downgrade “a wake-up call” for investors who had been ignoring the nation’s fiscal challenges.

Retailers also faced challenges. Target’s shares fell 5.2% after reporting weaker-than-expected earnings and cutting its full-year profit forecast. The company acknowledged setbacks linked to customer boycotts after it scaled back diversity and inclusion efforts earlier this year—a move criticized by both the White House and some conservative groups.

Meanwhile, Carter’s, a baby apparel retailer, saw its stock plunge 12.6% after announcing a dividend cut. CEO Doug Palladini cited expected investments and the risk of rising costs due to proposed new tariffs on imports as reasons for the cut.

Overall, the S&P 500 closed down 95.85 points at 5,844.61, the Dow ended at 41,860.44, and the Nasdaq finished at 18,872.64.

Looking ahead, many companies are grappling with the impact of tariffs and economic uncertainty, making it tough to forecast the year ahead. Some, like Walmart, have already warned they may raise prices to offset tariff costs.

Recently, U.S. stocks had bounced back from earlier losses thanks to tariff delays and rollbacks by the Trump administration. Investors remain hopeful that further trade deals will lead to more permanent tariff reductions.

Overseas, markets showed mixed results. London’s FTSE 100 edged up 0.1% after inflation in the UK hit a year-high in April, while Tokyo’s Nikkei 225 dropped 0.6%, hurt by slower export growth linked to tariffs.

Source: AP News – Wall Street tumbles under the weight of rising Treasury yields and US debt worries

The post Wall Street Falls as U.S. Debt and Rising Bond Yields Spark Concern appeared first on Journos News - Breaking News, World News, Top Stories, Todays Headlines and Flash Reports.

NEW YORK (AP) — U.S. stocks ended with mixed results on Wednesday as a recent inflation report raised expectations of an interest rate cut by the Federal Reserve next month.

The S&P 500 was nearly flat, inching up less than 0.1%, following its first decline since last week’s post-Election Day rally. Meanwhile, the Dow Jones Industrial Average gained 47 points, or 0.1%, and the Nasdaq composite slipped by 0.3%.

Bond Market Reaction and Rate-Cut Expectations

The bond market also showed mixed results. Consumer inflation increased from 2.4% to 2.6%, as economists expected. However, “core inflation” (which excludes volatile categories like food and energy) remained steady, an indicator of long-term trends that economists say is more predictive. This stability strengthened expectations for a December rate cut.

“Bang in-line core inflation leaves the Fed on track to cut rates in December,” said Lindsay Rosner, head of multi-sector fixed income at Goldman Sachs Asset Management.

Since September, the Federal Reserve has gradually reduced interest rates from a two-decade high to support the job market and bring inflation near its 2% target. After the last rate cut in October, traders now see an 80% chance of a third cut in December, according to CME Group data.

Following the inflation report, the yield on the two-year Treasury fell to 4.27% from 4.34% on Tuesday. The 10-year Treasury yield, influenced by long-term growth expectations, initially dropped but eventually rose slightly to 4.45%.

Uncertainty for 2025 and Potential Economic Changes

Looking forward, questions remain regarding the Fed’s plans for 2025. Previous Fed forecasts indicated potential further rate cuts into next year, but Donald Trump’s recent election victory may change that trajectory. Trump’s support for lower taxes, higher tariffs, and reduced regulation could lead to increased government debt, higher inflation, and accelerated economic growth, potentially altering rate cut plans.

“While lower rates can boost the economy and stock prices, they can also fuel inflation,” noted Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “The market may be at an inflection point, with inflation potentially turning upward.”

Stock Highlights

On Wall Street, Rivian Automotive surged 13.7% after it shared more details about its joint venture with Volkswagen Group, which could reach a total size of $5.8 billion, exceeding prior estimates.

In contrast, Spirit Airlines stock fell 59.3% after the company filed for debt renegotiation, which, if successful, could affect shareholder equity but protect employees and customers.

By the end of trading, the S&P 500 rose 1.39 points to close at 5,985.38. The Dow gained 47.21 points, reaching 43,958.19, while the Nasdaq declined by 50.66 points to finish at 19,230.74.

Global Markets and Cryptocurrency Movements

Internationally, Japan’s Nikkei 225 dropped 1.7% following a surge in wholesale inflation to its highest level since July 2022. South Korea’s Kospi fell 2.6%, affected by a significant decline in Samsung Electronics shares.

In the cryptocurrency space, Bitcoin crossed above $93,000 before pulling back below $90,000. President Trump has embraced cryptocurrencies, pledging to make the U.S. the global crypto capital. Meanwhile, Dogecoin (favored by Tesla’s Elon Musk) also pared earlier gains after Trump appointed Musk to head the “Department of Government Efficiency,” or “DOGE” for short.

Source

The post Stocks Drift to Mixed Close as Inflation Report Signals Potential Rate Cut appeared first on Journos News - Breaking News, World News, Top Stories, Todays Headlines and Flash Reports.