The Week That Was, The Week Ahead: Macro & Markets, July 6, 2025

Business Insider

7 days ago

Everything to Know about Macro and Markets
Stock indexes closed the abbreviated week with strong gains, advancing in three of the four trading sessions. The S&P 500 (SPX) and the tech-heavy Nasdaq-100 (NDX) gained 2.25% and 1.87%, respectively, both reaching new record levels. Meanwhile, the Dow Jones Industrial Average (DJIA) surged 3.32% for the week, closing less than 1% below its all-time high.
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One Big Beautiful Rally
Stocks rallied as another batch of uncertainties was taken off the table. The U.S. signed a trade deal with Vietnam, an emerging global outsourcing and manufacturing hub striving to replace China for U.S. corporations. President Trump's U.S.-Vietnam agreement eliminates tariffs on American exports to Vietnam while imposing a 20% tariff on Vietnamese imports – benefiting American exporters and multinationals with manufacturing, assembly, or logistics operations in Vietnam, such as Nike (NKE), Intel (INTC), and Apple (AAPL).
On Thursday, the House narrowly passed President Trump's $3.4 trillion fiscal package – widely referred to as the 'One Big Beautiful Bill.' The bill is immensely favorable for U.S. corporations – outside of the removal of tax incentives for renewables and a hit to Medicaid providers due to funding cuts – as it includes corporate tax cuts, major infrastructure investments, R&D incentives, and more.
Moreover, on the same day, investors received confirmation that the U.S. economy is happily chugging along, with no recession or even significant weakness in sight. Data showed the economy added 147,000 jobs in June, surpassing expectations, while the unemployment rate fell to 4.1%. This signals a strong job market and portends optimism for consumer spending. The positive surprise from the strength of the economy – amid some remaining tariff uncertainty – outweighed the decline in wagers on Federal Reserve rate cuts.
Earlier in the week, the Federal Reserve published the results of its annual stress tests for the 22 largest financial institutions, with all of them easily passing the thresholds. These results pave the way for increased shareholder returns, including dividend hikes and expanded share buyback programs. JPMorgan (JPM), Morgan Stanley (MS), Goldman Sachs (GS), and several others have already announced notable dividend hikes and new multibillion-dollar buyback programs.
Fossil-Powered Chips
The Technology sector – especially chipmakers – stands out as a major beneficiary of the R&D and domestic chip incentives in Trump's 'One Big Beautiful Bill' fiscal package. The bill raises the federal tax credit for semiconductor manufacturers to 35% (up from 25% under the previous CHIPS Act), providing a substantial incentive for companies to build and expand fabrication plants in the U.S. Moreover, the deal restores or enhances immediate expensing for capital expenditures, encouraging companies to invest in new equipment, technology, and facilities. Taken together, these measures significantly lower the effective costs of building chip plants and investing in advanced technology.
Industrials are another key beneficiary of the bill, which allocates significant funding for a wide array of projects tied to highways, transportation, ports, and general infrastructure. These investments directly benefit companies in construction, engineering, heavy equipment, and materials. The sector will also see a significant positive impact from the favorable tax treatment for manufacturing investments and funding for expanded workforce training. Meanwhile, the legislation also includes hundreds of billions in new military spending – with major allocations for border security, missile defense, and expanded defense procurement – benefiting aerospace & defense firms, military equipment suppliers, and contractors.
The 'One Big Beautiful Bill' also strongly benefits traditional energy producers – supported by deregulation and favorable policies – as well as financials, standing to gain from deregulation and continued favorable tax treatment.
Importantly, the budget package is expected to boost business investment, productivity, and job creation, while increasing long-run GDP growth. However, concerns about higher federal deficits remain unanswered at the moment, with some economists warning that they could reduce the net positive effect on the economy.
Stocks That Made the News
▣ Shares of Synopsys (SNPS) and Cadence Design (CDNS) surged after President Donald Trump's administration lifted export curbs on chip design software to China amid trade deal implementation, signaling a ceasefire in the U.S.-China trade war.
▣ Datadog (DDOG) skyrocketed on news that it is slated to join the S&P 500 this week, prompting several analysts to raise their price targets on the stock.
▣ CrowdStrike (CRWD) hit an all-time high after Wedbush analysts lifted their price target on the stock and described the company as the cybersecurity industry's 'gold standard,' with a meaningful tailwind from 'securing the AI revolution.'
▣ Centene (CNC) shares plunged nearly 40% after the company withdrew its 2025 earnings guidance. This decision followed an analysis of preliminary data from Wakely, covering about 72% of its marketplace membership, which indicated lower-than-expected market growth and significantly higher morbidity rates. Shares of Molina Healthcare (MOH) and Elevance Health (ELV) – which also provide government-sponsored health insurance plans – saw strong declines in the wake of the sentiment hit.
▣ Nike (NKE) added almost 8% over the past week, and several other retailers with a significant production footprint in Vietnam also climbed after President Trump said the U.S. had reached a trade deal with the country. About 20% of all apparel imports to the U.S. – and over a third of footwear imports – come from Vietnam.
The Q2 2025 earnings season will officially open next week, but there are some notable releases scheduled for this week. The reporting large-caps are Progressive (PGR) and Conagra Brands (CAG).