On Wednesday, July 9, 2025, the U.S. stock market continued its “slow climb” pattern with all three major indices closing in the green. The S&P 500 gained 37.74 points (+0.61%), closing at 6,263.50; the Nasdaq rose 192.88 points (+0.94%), closing at 20,645, marking a new all-time high; the Dow Jones also closed higher. Market sentiment remains stable, and the “effortless upward trend” after breaking the 6,147 level is further validated. Here's a breakdown of the key events, policy developments, and market trends:
1. Market Overview: Slow and Steady Growth, Technical Support Remains Clear
Although the S&P 500 did not hit a new high, it remains above all moving averages (bullish formation), signaling a continued “buy the dip” sentiment. The Nasdaq, propelled by strong performances from tech stocks like Nvidia, broke through its previous high, confirming that “tech stocks lead the market.” The current market logic is straightforward: with no technical resistance, the index steadily rises above the moving averages without any overbought signals.
Investors have largely digested potential policy variables like tariffs and Fed statements, focusing more on the long-term growth prospects. The current strategy is to hold onto or rotate into strong stocks, while new funds may wait for a potential pullback.
2. Federal Reserve June FOMC Meeting Minutes: Tariffs as the Core Obstacle to Rate Cuts
On July 9, the Fed released the minutes from the June 18 FOMC meeting, which can be summarized into three main points:
- No rate cuts due to tariffs - The minutes made it clear that the Fed's monetary policy remains unchanged, with tariffs being the central issue holding back a rate cut. Powell had previously stated that “without tariffs, we would have already cut rates.” These minutes support that view.
- Dollar depreciation - The minutes note that the U.S. dollar’s recent decline is partly due to “U.S. economic growth prospects weakening more than other major economies.” However, Trump countered this by arguing that “U.S. interest rates are much higher than in other countries, and if the U.S. economy is weaker, rates should be lower.”
- Impact of trade wars and Middle East conflicts - The minutes also suggested that “easing trade tensions between the U.S. and China” has been a significant factor in boosting global risk sentiment, while the Iran-Israel conflict has had a limited impact on the markets. This aligns with the general consensus that trade policy shifts between the world’s two largest economies have far greater repercussions than localized conflicts.
3. Tariff Threats: "Letters" Have Become Routine, Market Desensitized
On July 9, President Trump continued to send personal letters (seven in total) to countries like the Philippines, Sri Lanka, and Iraq, extending the suspension of certain tariffs until August 1. However, the market's reaction was muted for two reasons:
- No new tariffs, just a delay - The letters merely extend the suspension period, rather than imposing new tariffs. The affected countries, such as the Philippines, account for a negligible portion of U.S. imports (less than 1%), so the actual market impact is minimal.
- Historical context: “The Boy Who Cried Wolf” - The tariff threats, such as the earlier “tariff-for-tariff” stance in April, led to significant market volatility. However, since then, similar threats have failed to spark panic, with investors focusing more on developments involving major players like the EU and China, rather than symbolic pressures on smaller countries. Notably, Bitcoin and other risk assets have treated tariff threats as a “positive” since such uncertainty boosts demand for “safe-haven” and anti-inflation assets. Bitcoin soared past $110k, hitting a new all-time high.
4. Cryptocurrency: Bitcoin Surpasses $110k, Institutional Funds Accelerate Their Involvement
Bitcoin’s surge to a new high is driven by a confluence of factors:
- Supply-side factors - Bitcoin’s fixed supply of 21 million coins, with over 19.5 million already mined, has made the remaining supply scarce (around 1.47 million coins left). Additionally, a portion of coins has been permanently lost due to holders’ forgetfulness or death, decreasing the actual circulating supply.
- Demand-side factors - Institutional funds are entering the space, with Bitcoin ETFs (exchange-traded funds) and other regulated investment vehicles attracting traditional financial institutions. MicroStrategy (MSTR), the company with the largest Bitcoin holdings, saw its stock price soar as Bitcoin rose, and other companies (like Tesla) are following suit.
- Investment advice: If you’re bullish on Bitcoin, you can directly buy Bitcoin ETFs (such as IBIT). However, buying stocks with significant Bitcoin exposure may be less cost-efficient, as the price volatility of Bitcoin plus company-specific risks (like dilution or management issues) make this approach less attractive.
5. Earnings Season Outlook: Bank Stocks Lead, Strong Earnings Likely
With earnings season beginning on July 9, the market is focused on whether corporate earnings are impacted by tariffs.
Bank stocks: Strong performance expected, but already priced in - Major banks like Goldman Sachs, JP Morgan Chase, and Citigroup will report their earnings first. Expectations are high for growth in their investment banking business (IPO and M&A revenues), along with a boost from the Fed’s relaxed capital rules allowing for higher buybacks. However, bank stocks have already seen significant gains (with trends resembling tech stocks), so short-term price movement may be capped, especially given their low dividend yields (around 1.78%).
6. Tech Stocks: Nvidia Hits $4 Trillion Market Cap, Tesla Falls Below Annual Trend
Tech stocks remain the market’s backbone, though some internal divergence is starting to appear:
Nvidia: A $4 Trillion Market Cap Unlocks the Tech Stock Ceiling - Nvidia’s stock price continued its rally, pushing its market cap to over $4 trillion, a new record. The supporting factors include sovereign AI demand from countries like Saudi Arabia and technological barriers preventing competitors (like DeepSeek) from taking Nvidia’s market share. Even after the stock hits new highs, investors remain willing to “chase the trend,” as no significant resistance is visible.
Investment tip: Nvidia’s stock has surged by over 25% from its low point this year, so its current valuation may make it less appealing for new investors looking for value.
Tesla: Breaks Below Annual Trend, Struggling with Performance and Politics - Tesla’s stock price fell below its annual trendline, signaling that its bullish momentum may be waning. Two factors contribute to this: weaker performance (slower vehicle sales, the end of subsidies, carbon credit revenue zeroing out) and political distractions (Elon Musk's political activities, with the formation of the “American Party” and management distractions following the resignation of X’s CEO Linda Martinez).
7. Other Developments: CEO of X Resigns, Musk’s Time Pressure Mounts
On July 9, Linda Yaccarino resigned as CEO of X (formerly Twitter), a company acquired by Musk. The reasons for her resignation remain unclear, but this could further increase Musk’s time pressure, as he has already shifted focus to political ventures and AI development with X-AI. This may impact his involvement in Tesla’s operations, which could ultimately affect the stock.
Conclusion: In a Slow-Burning Market, Focus on Earnings
The market continues to follow the “slow and steady growth” narrative, with clear upward momentum for indices, while policy changes remain “dull.” Short-term focus should be on:
- Bank stocks during earnings season (strong earnings likely, but already priced in).
- Bitcoin ETFs (a clear upward trend for Bitcoin, direct participation is more efficient).
- Tech giants like Nvidia (though expensive, the trend remains strong) and Tesla (waiting for earnings to improve).
