This Week

After a week that saw the rally extend to fresh record highs, investors now turn their attention to what could be a headline-heavy stretch, with the looming expiration of the 90-day tariff pause announced back in April front and center. While equity markets were closed on Friday for the holiday, futures remained open and hinted at some early selling pressure to kick off the week. More on that shortly — but first, a look at some of the weekend headlines, including trade-related commentary from Scott Bessent on the Sunday morning shows:

• Tariffs return to April rates on August 1 without deals, Bessent says (Axios)

  • Countries that don't make trade deals with the U.S. by August 1 can expect tariff rates to return to the levels announced in April, Treasury Secretary Scott Bessent said Sunday. It's effectively a new deadline for the biggest U.S. trading partners to negotiate an alternative to President Trump's sweeping global tariffs — even as Bessent insists nothing had changed. On Friday, Trump said about a dozen countries would receive letters Monday unilaterally setting a tariff rate, with more to come in the following days. Trump has said he preferred those letters to negotiations, after a three-month pause on his most sweeping tariffs netted three deals, rather than the 90 his administration promised. That pause expires this coming Wednesday. Bessent, in an interview with CNN's "State of the Union," said the letters would make clear that absent a deal, the rates would return to the levels Trump announced April 2. "It's not a new deadline. We are saying, this is when it's happening, if you want to speed things up, have at it, if you want to go back to the old rate, that's your choice," he said.

• Trump says tariff letters to 12 countries signed, going out Monday (CNBC)

  • U.S. President Donald Trump said he had signed letters to 12 countries outlining the various tariff levels they would face on goods they export to the United States, with the “take it or leave it” offers to be sent out on Monday. Trump, speaking to reporters aboard Air Force One as he traveled to New Jersey, declined to name the countries involved, saying that would be made public on Monday. Trump had earlier on Thursday told reporters that he expected a first batch of letters to go out on Friday, a national holiday in the United States, though the date has now shifted. In a global trade war that has upended financial markets and set off a scramble among policymakers to guard their economies, Trump in April announced a 10% base tariff rate and additional amounts for most countries, some ranging as high as 50%. However, all but the 10% base rate were subsequently suspended for 90 days to allow more time for negotiations to secure deals. That period ends on July 9, although Trump early on Friday said the tariffs could be even higher — ranging up to 70% — with most set to go into effect August 1.

• Retail investors reap gains as dip-buying strategy fuels market rally (FT)

  • U.S. retail investors have seen their most profitable year since the early days of the pandemic, as aggressive dip-buying has helped drive stock markets to new highs, the Financial Times reported Sunday. According to VandaTrack data cited by the newspaper, individual investors have poured a record $155 billion into U.S. stocks and ETFs so far in 2025, surpassing the investment frenzy seen during the 2021 meme-stock craze.

• Meme Stocks and YOLO Bets Are Back and Fueling the Market’s Rally (WSJ)

  • Shares of unprofitable companies have outperformed since early April, and investors are now speculating like it’s 2021. Forget the Magnificent Seven. Investors are now learning to love the Unprofitable 858. Meme stocks and money-losing companies are now back in favor, and underpinning a rally that has lifted the market to records.

• 'Some complacency has crept in': How FOMO and speculative bets are driving the 2025 market rally (Yahoo Finance) 

  • The stock market continues to hit new highs in 2025, buoyed by a surge in megacap stocks and more speculative trades as investors' appetite for risk continues to grow despite lingering economic uncertainties. Palantir (PLTR), sometimes described as the quintessential meme stock, and Super Micro Computer (SMCI), the most heavily shorted stock in the S&P 500 (^GSPC) in April, have been among the top-performing equities this year, far outpacing the broader index. While this speculative rally exists alongside record highs for AI giants like Nvidia (NVDA) and Meta (META), a fear of missing out appears to be a key force behind recent investor behavior. "Retail traders' fingerprints [are] all over it," Liz Ann Sonders, chief investment strategist at Charles Schwab, said on Yahoo Finance's Opening Bid this week, describing the market's powerful rebound since the early April lows. The rally, she said, has been strengthened by a surge in "retail favorites or meme stocks, unprofitable tech," and a "lower quality tilt" that has lifted riskier names — even penny stocks. "Some complacency has crept in," she said.

• Dollar Doubters Seed Historic Gains for Developing World Debt (Bloomberg)

  • US policy volatility has sent money managers scouring the world for alternatives, propelling local bonds from emerging-market countries to their best first half in 16 years. The surge in demand for fixed-income assets in EM currencies is largely the flip side of sinking confidence in the US dollar, which has tumbled almost 11% this year. That’s its worst performance since the 1970s, and the losses are across the board, with the greenback falling against 19 of the 23 most-traded emerging-market currencies, and by at least 10% against 10 of them. The upshot is that an index of emerging-market local debt has returned more than 12% in the first half of the year, according to data compiled by Bloomberg, beating hard-currency bonds, which were up 5.4% in the same period. The first-half gains were the strongest since at least 2009.

• Homeowners Who Gambled on Lower Rates Are Paying the Price (WSJ)

  • Mortgage rates holding stubbornly above 6.6% leave many people stuck with higher monthly costs and no path to refinance. Millions of Americans bought homes in recent years with mortgage rates at 6.5% or higher, often betting they could refinance to a lower rate within a year or two. Now, with little hope of a rate cut in July after a solid jobs report on Thursday, many of these owners face the predicament of paying those higher costs for longer than they expected.

• Ex-OpenAI Board Member Questions Meta Hiring Spree (Bloomberg)

  • Meta Platforms Inc.'s lavish multimillion-dollar budget for recruiting top AI talent may not guarantee success, said Helen Toner, former OpenAI board member and director of strategy at Georgetown's Center for Security and Emerging Technology.

You may have noticed a wave of weekend headlines highlighting signs of speculative froth building in equity markets — a theme we've been tracking closely over the past two weeks. One of the key signals has been the VIX, which last week started flashing the unusual pattern of "stocks up, vol up." That dynamic even persisted with a modest bid in volatility following Thursday morning’s strong jobs report — not typical behavior heading into a long weekend. Keep an eye on whether the expected moves (as priced at Thursday’s close) end up being underestimated:

This Week’s Expected Moves:

• SPX/SPY: 1.5% (6150-6400)

  • QQQ: 1.8%

  • IWM: 2.2%

  • TLT: 1.3%

  • USO: 3.5%

It’s a fairly quiet week on the scheduled economic data front. The expectation is that tariff/trade headlines will dominate macro, but we do see FOMC minutes on Wednesday, some Fed speeches at the end of the week, and some overseas GDP and Inflation numbers all week.

Economic Calendar: 

• Wednesday

  • 2pm - FOMC Minutes

• Thursday

  • 8:30am - Initial Jobless Claims

  • 1:15pm - Fed Waller Speech

  • 2:30 - Fed Daly Speech

The earnings calendar is also very light this week. The new earnings season kicks off in earnest mid July:

Earnings (with expected moves):

• Thursday

  • Pre-market: DAL 7.5%, CAG 4.3%

  • After-hours: LEVI 6.5%

In last Sunday’s weekly preview we had this to say:

Last week was an unusual one for equities, as the rally extended despite looming trade deadlines — largely because administration officials began downplaying their significance. Optimism around potential rate cuts also helped fuel the move higher, but that narrative took a hit with Thursday’s stronger-than-expected jobs report, which cooled expectations for near-term easing. Still, that bullish case could regain traction if next week’s inflation data comes in softer than expected, setting the stage for a “Goldilocks” scenario: rate cuts into a strong economy.

In the meantime, however, markets are likely to be driven by tariff headlines. Against that backdrop, it will be worth watching whether the speculative froth that’s emerged in recent weeks continues or fades. Much of that frothy behavior seemed to arise in a macro news vacuum — following the de-escalation of U.S.-Iran tensions and a relatively relaxed stance from the White House on trade. If we again see the trade deadlines kicked down the road that behavior could return quickly. But if not, it’s worth watching how some of those meme names and even indices like Russell/IWM react.

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