Daily summary: Big Beautiful Bill passed through Senate, Wall Street retreats form record highs (01.07.2025)

Wall Street starts the new week with mixed sentiment in reaction to macroeconomic data and comments from Jerome Powell, which support the Fed’s current stance on interest rates.

The Nasdaq is currently down about 0.6%, due to declines in semiconductor stocks and a sell-off of Tesla shares. The S&P 500 is slightly negative (-0.1%), while the Russell 2000 and Dow Jones continue to climb (by 1.2% and 0.9%, respectively). This pullback in the U.S. stock market could be the first since the start of last week.

During a central bankers’ meeting in Sintra, the Federal Reserve chair emphasized that the strong picture of the U.S. economy allows for further waiting for clearer macroeconomic data before changing the current interest rate level. Powell stated that monetary policy remains moderately restrictive, and the Fed is carefully watching for potential warning signals for the economy.

The U.S. Senate passes a tax bill introducing a range of tax breaks and limiting social support spending. The bill includes raising the debt ceiling by $5 trillion, which met opposition from some Republicans. The bill passes thanks to Vice President Vance’s tie-breaking vote. It is now sent to the House of Representatives, and it is expected to reach the president’s desk for signing before Independence Day.

The ISM Manufacturing Index in the U.S. rises to 49 points, versus expectations of 48.8 and a previous reading of 48.5. The increase is mainly due to a high level of the prices subindex, while employment and new orders subindexes fell significantly.

JOLTS (Job Openings and Labor Turnover Survey) for May shows an increase to 7.769 million vacancies from 7.391 million, despite expectations of a drop to 7.3 million. The data indicates the labor market continues to generate strong demand.

Apple gains more than 2%, extending its rebound from yesterday’s session, following reports that the company may use external artificial intelligence to improve the Siri assistant.

Tesla falls over 4% today amid ongoing disputes between Trump and Musk. Trump claims Musk received too many government subsidies and argues that significant budget savings could be achieved by reducing support for Musk’s companies. The Tesla and SpaceX owner criticized the tax bill for reducing support for electric vehicles.

European indices continue to correct amid speculation about trade deal terms between the EU and the U.S. Germany’s DAX (-1%) and Italy’s FTSE MIB (-0.58%) are the biggest losers; France’s CAC 40 and Spain’s IBEX 35 closed flat; while the Zurich (SMI: +0.35%) and London (FTSE 100: +0.28%) markets recorded gains.

France’s manufacturing PMI unexpectedly rises to 48.1 points, while Germany’s PMI remains steady at 49 points, in line with preliminary data.

Gold gains over 1% today, breaking above $3,350 and returning above its 25- and 50-day moving averages. Gold is rising due to uncertainty about the U.S. fiscal situation and worsening trade relations between the U.S. and Japan, just days before the planned expiration of a mutual tariff suspension.

In the forex market: the dollar index recovered losses from today’s session after the Senate passed Donald Trump’s “Big Beautiful Deal.” EUR/USD is slightly correcting, falling back below the session high above 1.18 (currently down 0.05% to 1.1780). The strongest G10 currency today is the Japanese yen (USD/JPY: -0.25%), while the Canadian dollar is the biggest loser (USD/CAD: +0.34%).

EUR/USD may record its first decline today since June 22.

The cryptocurrency market is trading in the red: Bitcoin loses 1.2% to $106,270, Ethereum falls 3% to $2,428, and contracts for Graph (-5.3%), Solana (-4.9%), and Polygon (-4.4%) are also down.