Both the S&P 500 (SPX) and Nasdaq 100 (NDX) surged higher in early morning trading before giving up a majority of their gains by the end of the trading session.
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The Nasdaq 100 reached a new all-time high before noon and then proceeded to slink lower for the rest of the day. That came amid the European Union warning that it could hit the U.S. with retaliatory tariffs if President Trump’s 10% baseline tariff holds. The 27-nation bloc is considering tariffs on Boeing (BA) planes and $110 billion of U.S. imported goods as bargaining chips in reaching a fair deal. Trump has imposed a deadline of July 9 before the U.S. enacts a 50% tariff on almost all goods imported from the EU.
Meanwhile, peace has returned to the Middle East with Israel and Iran agreeing to a truce. However, Trump warned that the two sides could resume the war “soon,” although he doesn’t expect this outcome. Trump also reiterated his claim that the U.S. “TOTALLY OBLITERATED” Iran’s nuclear program, despite reports that the strike only set it back by a few months.
“You would think they would be proud of the great success we had, instead of trying to always make our Country look bad,” said Trump in reference to the media.
What’s more, the housing market remains in a precarious position. In May, new single-family homes sales totaled 623,000 on a seasonally-adjusted annualized basis, falling by 13.7% month-over-month. Affordability remains a major issue with high home prices and mortgage rates. That could be a sign of concern for the market given that the housing market acts as a gauge of consumer confidence.
Trump has long called for the Fed to lower interest rates, which could have an indirect effect on longer-term mortgage rates. However, Fed Chair Powell has ignored his requests in order to combat the potential of tariff-driven inflation later on this year. It just so happens that Powell’s term expires in May 2026, something that Trump has already begun preparations for.
On Wednesday, he said that he has a list of “3 or 4” candidates for the Chair position without revealing specific names. Online betting platform Polymarket places the highest odds on Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, and White House economic advisor Kevin Hassett.
The S&P 500 finished with a less than 0.01% gain while the Nasdaq 100 rose by 0.21%.
