Both the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) opened Thursday’s trading session in the green. SPY held on to close in positive territory, while QQQ wasn’t so lucky.
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Before the market open, the U.S. Department of Labor announced that initial jobless claims were 227,000 for the week ended July 5, below the expectation for 235,000 and falling from 232,000 during the previous week. In addition, continuing jobless claims—a measure of the unemployed population receiving benefits—were 1.965 million, in line with the expectation but also the highest number since November 2021. These two data points signal that employers are keeping layoffs under control but are hesitant to hire.
Following President Trump’s declaration of a 50% tariff on imported goods from Brazil, Brazilian President Luiz Inácio Lula da Silva vowed to retaliate with an equal tariff. “Therefore, any unilateral tariff increases will be addressed in accordance with Brazil’s Economic Reciprocity Law,” said Lula in an X post. Lula pointed out that the U.S. has commanded a trade surplus with Brazil during the past 15 years. In 2024, the U.S. had a $7.4 billion goods surplus with Brazil.
Trump brushed off Lula’s retaliatory tariff threat and instead celebrated the strong performance of tech stocks, cryptocurrencies, and Nvidia (NVDA) during the past few months.
“Tech Stocks, Industrial Stocks, & NASDAQ, HIT ALL-TIME, RECORD HIGHS! CRYPTO, ‘Through the Roof.’ NVIDIA IS UP 47% SINCE TRUMP TARIFFS,” said Trump in a Truth Social post on Thursday.
Trump will hold a meeting with Nvidia CEO Jensen Huang today, according to Bloomberg. The details of the meeting are unclear, although it comes less than a week from Huang’s trip to China. Nvidia is also in the process of designing an alternative version of its Blackwell RTX Pro 6000 processor for China in order to sidestep U.S. export restrictions.
Furthermore, Trump continued his campaign of pressuring Fed Chair Jerome Powell, this time saying that Powell “DEMEANS THE GREAT CREDIT OF THE USA.” Yesterday, Trump said that the federal funds rate is at least 3% too high, with each percentage point costing the U.S. $360 billion per year.
Trump’s request for lower rates will likely remain unfulfilled, as the market is pricing in a slim 6.7% chance of a 25 bps interest rate cut at the July 29-30 Federal Open Market Committee (FOMC) meeting. At the same time, some Fed officials support Trump’s view.
“The policy rate is still pretty restrictive. We can lower that,” said Fed Governor Christopher Waller at a Dallas Fed event. Waller added that Trump’s tariffs will likely result in a one-time price increase and that the unemployment rate remains under control.
The S&P 500 (SPX) finished with a 0.27% gain while the Nasdaq 100 (NDX) fell by 0.16%.
