A little on the softer side

The equity futures market looks a lot like it is coming off a long holiday weekend and is in the midst of a popular vacation period: a little on the softer side.

Currently, the S&P 500 futures are down 21 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 112 points and are trading 0.5% below fair value, and the Dow Jones Industrial Average futures are up two points and are trading 0.2% below fair value.

The underperformance of the Nasdaq 100 futures stems in large part from some weakness in the mega-cap space. Tesla (TSLA), down 6.5%, is a downside leader there, with Elon Musk announcing that he will be starting a new political party, the “America Party,” and The Wall Street Journal reporting that Tesla is facing added competition in China.

NVIDIA (NVDA) is also weaker, down 0.9% on some consolidation interest that has been influenced by a Bloomberg report that the Trump administration is planning AI chip export restrictions on Thailand.

There will be ample attention on the administration’s trade dealings this week. Coming off the July 4 signing of the “One Big, Beautiful Bill” into law, the administration will continue with its trade deal negotiations.

Treasury Secretary Bessent said he expects several big announcements this week but added that any country that has not struck a deal with the U.S. by August 1 will see tariff rates revert to the higher April level. Reportedly, several countries are getting such warning letters sent to them today.

There is a little trade uncertainty in the mix today, then, but it isn’t a stretch to think the market is also simply adhering to some consolidation interest after making such a massive run. 

There isn’t any U.S. economic data of note today, and there won’t be much throughout the week, which will feature the release of the FOMC Minutes for the June 17-18 meeting on Wednesday and several Treasury auctions. There is a $58 billion 3-yr note auction on Tuesday, a $39 billion 10-yr note auction on Wednesday, and a $22 billion 30-yr bond auction on Thursday.

Treasuries are mixed this morning, with some modest steepening action on the curve. The 2-yr note yield is down one basis point to 3.87%, and the 10-yr note yield is up one basis point to 4.36%.

In other developments, OPEC+ agreed to raise its output in August by 548,000 barrels per day, up from the 411,000 barrels per day increase pursued in May, June, and July, according to Bloomberg. WTI crude futures are currently up 0.4% to $67.26 per barrel.

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Originally Posted July 7, 2025 – A little on the softer side