Breakfast News: Stocks Fly on Trade Progress

Breakfast News: Stocks Fly on Trade Progress

Source: Image Created by Jester AI.

1. S&P Hits New ATH, Tariff Deadline Looms

The S&P 500 hit its first all-time high since February, ending Friday up 3.5% on the week. The Nasdaq added 4.1%, while the Dow Jones gained 3.8%. Despite a boost from trade progress with China earlier in the week, markets were shaken Friday when President Trump announced he was terminating trade discussions with Canada, but they're back on again and futures in the three major U.S. stock markets are edging up this morning.

• "Direct and blatant attack on our country": Canada agreed to halt its digital services tax, which would have hit U.S. technology companies and was the cause of the president's ire. Talks with Canadian Prime Minister Mark Carney will resume, with a July 21 target agreement date.
• "We could extend it, we could make it shorter": Markets enter this week facing uncertainty over the looming July 9 tariff pause deadline. Trump told Fox News he didn't think he needed to extend the date, but added "I could, no big deal."

2. What to Watch This Week

Thursday brings the June jobs report, ahead of markets closing at 1pm ET and remaining closed through Friday's Independence Day holiday. It's the last employment print before the Federal Reserve's next rate-setting meeting on 30 July. The unemployment rate is expected to rise to 4.3% from 4.2%.

• "Well positioned to wait": Fed chair Jerome Powell remained cautious speaking to the House Financial Services Committee, while markets price in growing optimism. The CME FedWatch tool shows a 91.6% chance of a September cut, up from 82.6% a week ago.
• Refocusing on beer markets: Constellation Brands (STZ 0.76%) is the only S&P 500 company reporting this week, with an update for the first quarter of fiscal 2026 after beating estimates for Q4 2025. Watch for restructuring progress as the company offloads less profitable wine and spirits operations.

3. Americans Save Record for Retirement

Vanguard's "How America Saves 2025" report shows workers contributed a record proportion of their pay to their 401(k) accounts last year. Contributions reached a record 7.7% of the average paycheck, as nearly half of Americans raised their contributions last year.

• "We recommend saving 12%-15% of your income for retirement": Talking to Yahoo Finance, David Stinnett of Vanguard spoke of "positive retirement outcomes," as employer contributions took the average total up to 12%.
• "More than 1 in 3 workers cash out their 401(k) when they change jobs": Fool advisor Robert Brokamp explains in a GamePlan+ article (available to Epic members and above) how cashing in early can cost "thousands of dollars -- perhaps tens or hundreds of thousands of dollars -- in taxes, penalties, and forgone growth on what that money could have earned," as a record number of Americans are turning to emergency withdrawals.

4. Soft Dollar a Boon for Apple, Blow to TSMC

With Magnificent 7 reporting season approaching in the not-too-distant future, we should watch for the effects of currency change rates, says a Barron's report looking at the contrasting effects of a weakening dollar on the outlooks for two tech companies.

• New $10 billion hedge: A strong dollar has historically made Taiwan Semiconductor (TSM -0.94%) earnings look better reported in local currency. But it's just raised its exchange rate hedging total to $18 billion, telling us a 1% fall in the dollar can take 0.4% off its operating margin.
• 64% of sales from overseas: Apple (AAPL 0.17%) sees the opposite effect, saying foreign currency weakness "adversely affects the U.S. dollar value" of its overseas revenue, leading to international price rises damaging competitiveness. The company now expects that pressure to ease.

5. Your Take

As we wrap up June – and the first half of the year – what one stock has made it onto your radar in 2025 for the first time, and why? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.