If the traffic on I-95 was anything to judge by, not many people were working last week. Markets closed at 1:00 p.m. on Thursday, and remained closed on Friday. But the Nasdaq Composite Index and Standard & Poor’s 500 still managed to close at new highs for the week, while yields on government bonds rose slightly as prices fell. Last Monday marked the end of the first half of the year, with prices MUCH higher than we saw in the brief April correction.
Said correction was caused by “Liberation Day” on which the president announced unexpectedly hefty tariffs on every country in the world except for Russia. Since then, markets have risen and fallen on tariff news, of which there has been a lot. As of now, tariffs, which were postponed for 90 days in order to reach trade agreements, are due to take effect on Wednesday, July 9th. Unless Commerce Secretary Howard Lutnick knows something we don’t. He recently said that countries which don’t make a deal with the U.S. will be hit with tariffs on August 1st.
Markets react positively to delayed-tariff comments, because the tariffs, when in effect, will cause prices to rise for Americans and American companies. And inflation causes the Federal Reserve to raise interest rates, which causes people to buy less. Tariffs do the same thing, which is why the Fed is sitting and watching the economy and not yet making interest rate changes. The Fed’s next meeting is at the end of July, but hardly anyone in the financial world thinks that it will cut rates then.
Last week we received both monthly jobs reports. The first one, released from ADP, which processes a vast quantity of private payrolls, showed a loss of jobs. The second one, from the Bureau of Labor Statistics, showed an increase in jobs. Half of the 147,000 new jobs were created in government, which continues to rehire some workers who were let go by DOGE. The unemployment rate dropped from 4.2% to 4.1% – a reading that analysts consider to reflect full employment. That’s another factor in the Fed’s interest-rate decision. A soft jobs market leads the Fed to reduce rates to encourage employers to hire. Right now we have a bifurcated economy, with job holders pretty safe in their positions, but jobs hard to find for those who are unemployed. As always, the Fed has a lot to think about.
What else happened last week? Well, President Trump’s Big Beautiful Bill was passed and then signed into law on July 4th. It is a regressive piece of legislation, which takes benefits away from poor- and working-class Americans and rewards big corporations and high earners with a continuation of the tax cuts enacted during President Trump’s first term. One problem with this approach is that poorer citizens don’t have enough money to pay for the tax cuts, so all of our children will have to pay as between $3 and $5 TRILLION is added to our national debt, which currently stands around $34 trillion. Republican opponents of the bill were divided into two camps: those that thought the bill cut too much, and those who thought the bill didn’t cut enough.
Joey Chestnut returned to the Nathan’s Famous Hot Dog Eating Contest and won his 17th title, consuming 70.5 hot dogs AND BUNS in ten minutes. Women’s winner, Miki Sudo, ate 33, down from her record (last year) of 51. “I’m thinking the buns were more filling than usual,” she said after her win. Chestnut’s record of 83 was also set last year.
For the week ending on Thursday, July 3rd, the S&P 500 finished at 6,279, the Nasdaq at 20,601, and the Dow Jones industrials at 44,828. The yield on the ten-year Treasury Note closed at 4.348%. U.S. crude oil cost $65.41 per barrel, N.Y. gold cost $3,309.10 per ounce, and one Euro was worth $1.17.
Elizabeth E . Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) The Wall Street Journal, The New York Times, The Washington Post, USA Today, Barron’s, Bloomberg, Business Insider, Yahoo Finance, Axios, Morning Brew, People, MarketWatch, CNBC, CNN, Bureau of Labor Statistics, Reuters, and The Associated Press. If you have questions, please call us at 203.458.5220 or reply to this email to reach me, Liz Cook.
Chuck E. Cheese is opening a new series of arcade locations called Chuck’s Arcade, which will be full of retro arcade legends as well as what’s new. If you miss playing Ms. Pacman and Missile Command while eating cardboard pizza, this is for you. (Ten locations are open now and more are coming.)