July 9th Market Overview

Happy Wednesday

The market's got selective hearing today - completely tuning out Trump's latest tariff letters while celebrating Nvidia's historic $4 trillion milestone. Sometimes I think Wall Street has the attention span of a golden retriever, but in this case the focus on innovation over trade theater might be the right call.

Growth stories are winning over Washington drama.

Let's dig in...

Summary

1.) Nvidia breaks new ground
The chip giant became the first public company to hit $4 trillion in market cap, sparking a broader tech rally as investors bet on continued AI infrastructure demand.

2.) Markets shrug off tariff escalation 
Trump sent letters to seven more countries setting August 1 tariff deadlines, but investors treated it as negotiating posture rather than economic threat.

3.) Major healthcare moves 
Merck agreed to buy Verona Pharma for $10 billion while UnitedHealth dropped on reports of a DOJ criminal investigation into Medicare billing practices.

4.) Fed remains divided
June meeting minutes showed most officials expect rate cuts this year, but sharp disagreement persists on timing and magnitude.

Market Overview

U.S. Stock Indexes, This Week so Far

Stock Spotlight

Nvidia $NVDA ( ▲ 0.75% ) crossed into uncharted territory as the first company to achieve a $4 trillion valuation. The milestone validates the AI infrastructure thesis despite earlier concerns when Chinese startup DeepSeek suggested advanced models could run without premium chips. Reports that Chinese firms plan to install over 115,000 Nvidia chips across 39 desert data centers underscore persistent global demand.

UnitedHealth $UNH ( ▼ 1.12% ) faced selling pressure after The Wall Street Journal reported DOJ criminal investigators are questioning former employees about Medicare billing practices. The probe focuses on how the company encouraged documentation of high-reimbursement diagnoses and deployed home nurse visits to boost payments.

Verona Pharma $VRNA ( ▲ 0.08% ) jumped after Merck $MRK announced a $10 billion acquisition at $107 per share.

Big Name Updates

Microsoft $MSFT ( ▼ 0.4% ) received an Oppenheimer upgrade to outperform with a $600 price target. The firm believes sustained AI business growth and potential Azure reacceleration aren’t fully reflected in the stock.

Tesla $TSLA ( ▲ 4.73% ) got an RBC Capital price target increase to $319. While the bank forecasts delivery declines, new affordable models expected in Q3 should help stabilize sales trends.

Apple $AAPL ( ▲ 0.6% ) is reportedly pursuing U.S. broadcast rights for Formula 1 racing, continuing its expansion into live sports content.

Starbucks $SBUX ( ▼ 0.11% ) gained on CNBC reports that bids for its China business value the unit up to $10 billion. Carlyle, KKR, Centurium, and Hillhouse are among potential buyers, with Starbucks likely retaining a minority stake.

Other Notable Company News

Bloom Energy $BE ( ▼ 9.96% ) moved higher after JPMorgan upgraded to overweight, citing renewed tax credit eligibility under recent legislation that should boost revenue and margins.

Doximity $DOCS ( ▼ 5.03% ) received an Evercore upgrade to outperform as the firm sees the medical network’s fiscal 2026 guidance as conservatively set.

Super Micro Computer $SMCI ( ▲ 0.68% ) faced a Bank of America initiation at underperform, with concerns about margin pressure and component availability in competitive AI server markets.

Sector Watch

Bond Market

Treasury yields fell after strong demand at today’s $39 billion 10-year note auction. Notes sold at 4.362%, below expectations, with primary dealers taking just 10.9% allocation compared to the recent 12% average.

• The benchmark 10-year yield settled at 4.341%
• Strong institutional appetite despite tariff uncertainty
• Duration demand remains healthy heading into summer

Policy Watch

Trump continues pressuring Jerome Powell publicly, posting “CUT INTEREST RATES JEROME — NOW IS THE TIME!”

Kevin Hassett has emerged as a serious Fed chair contender after meeting with Trump twice recently, potentially challenging early favorite Kevin Warsh. The succession question adds another layer of uncertainty to monetary policy expectations.

On trade, Treasury Secretary Scott Bessent reportedly convinced Trump to delay tariff deadlines to August 1, believing progress was possible with India and the EU. The latest tariff letters target:
• Philippines: 20%
• Iraq, Libya, Algeria: 30%
• Brunei, Moldova: 25%

What to Watch

August 1 tariff deadline
Market confidence relies on deal-making before duties take effect. Any signs negotiations are failing could quickly shift sentiment.

Semiconductor momentum sustainability 
Nvidia's milestone and the VanEck Semiconductor ETF hitting new highs suggest renewed AI infrastructure confidence, but export restriction workarounds bear watching.

Fed chair speculation impact
Hassett's emergence changes rate expectations. His views on inflation targeting and financial stability could differ significantly from current Fed consensus.

China trade enforcement:
Reports of massive Nvidia chip installations in Chinese data centers despite export bans may prompt stronger administration response or policy adjustments.


Thanks for reading 🙂

- John

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