In finance, numbers often merely add up; they arrange themselves into parables. On Monday, the S&P 500 and the Nasdaq sashayed to fresh highs, buoyed by an artificial-intelligence euphoria that has begun to feel like a civic religion. The prophets are chipmakers, the apostles cloud vendors, and the incense drifts from server farms rising across the Nevada desert. Yet by dawn on Tuesday the futures market - bleary-eyed, insomniac - had already misplaced the optimism it flaunted at cocktail hour. Traders repeated an old Wall Street koan: what rises fastest proves most skittish.

The proximate culprit, we are told, is President Donald Trump’s “big, beautiful” tax-and-spend bill, which many commentators believe will only add to a sky-high federal tab. In the Senate, discussions have lumbered into its second day, Republicans performing fiscal yoga to reconcile debt-hawk posturing with a three-trillion-dollar hangover. The White House is determined to have the bill signed into law in time for the 4th of July national holiday. This is yet another illustration of the importance of storytelling for the 45th and 47th occupants of the Oval Office. 

Another invoice looms. Treasury Secretary Scott Bessent warns that tariffs may spike on July 9, even as U.S.–Japan talks limp along. Markets, sensitive creatures, sniff these draughts of uncertainty. Futures slipped - S&P and Nasdaq by 0.2% and Dow by 0.1%. 

In corporate news, Tesla fell more than four percent after a sixth consecutive month of shrinking Nordic sales and a public spat between its mercurial chief, Elon Musk, and the even more mercurial man in the Oval Office. Trump suggested the Department of Government Efficiency audit Musk’s subsidies.

Elsewhere in cryptoland, Circle Internet Financial applied for a national trust-bank charter and watched its shares inch upward. Even Robinhood, fresh from unveiling a new crypto playpen, enjoyed a modest pop.

Meanwhile, the data calendar hangs like a sword above Jerome Powell’s head. Manufacturing gauges, job-openings tallies, and the Fed chair’s own remarks in Sintra will be decoded by investors desperate for a rate-cut timetable. Futures contracts now price in sixty-eight basis points of easing by December and another sixty-seven by next Halloween - a schedule that implies both confidence in monetary mercy and dread of the ailment that would require it.

Around the edges, minor characters play their parts: the ten-year Treasury yield drifts to a two-month low; the dollar flirts with a three-year nadir; Brent crude softens on every rumor of OPEC+ largesse. Gold sneaks higher.

Today is July 1st, ending a peculiar first half of the year for markets. Thanks to a frenetic rebound, Wall Street has erased a disastrous start to the year. The S&P 500 index is up 5.5% at the turn of the year, just 1% less than the European Stoxx Europe 600 (+6.6%), which had been up as much as 10% during the first half of the year. The main difference is the 1.33% decline posted by European stocks, which ran out of steam in June, while US stocks are up 5%. The best tacticians were those who went after the 5% gains in Europe in the first quarter, before taking the 10.5% rise in the US market in the second quarter.

However, Western markets are not the best performers of the year. The MSCI Emerging Markets Index gained 13.70% in the first half.

When future historians parse this ticker tape, they may marvel that optimism and anxiety could coexist at such feverish volume. They will note that a bull market stuffed with AI dreams and tax absinthe reached for the stars even as the legislative earth cracked beneath it. 

In Asia-Pacific, the half-year started on a down note in Japan (-1.3%) and Hong Kong (-0.9%). However, Australia and India are slightly in the green, and South Korea and Taiwan are up 0.7% and 1.3% respectively. In Europe, the Stoxx Europe 600 is down 0.5%

Today's economic highlights:

On today's agenda: the Tankan manufacturing index and the Jibun Bank manufacturing PMI in Japan; the Caixin manufacturing PMI in China; retail sales and the manufacturing PMI in Switzerland; the manufacturing PMI in France, Germany, the Eurozone, and the United Kingdom; in the United States, the manufacturing PMI, construction spending, ISM manufacturing, and JOLTS job openings. See the full calendar here.

  • Dollar index: 96,185
  • Gold: US$3,349
  • Crude Oil (BRENT): $67.06 (WTI) $65.09
  • United States 10 years: 4.20%
  • BITCOIN: US$106,487

In corporate news:

  • Standard Chartered Bank faces a $2.7 billion lawsuit related to the 1MDB fraud.
  • Apple faces a US DOJ lawsuit over market dominance and considers AI tech for Siri.
  • Google criticizes EU tech regulations and invests in a Virginia fusion power project.
  • Musk's xAI raises $5 billion in debt and equity.
  • Accelerant, backed by Todd Boehly, files for a US IPO.
  • General Mills has sold its yogurt business to Lactalis.
  • Boeing has appointed Jay Malave, former chief financial officer of Lockheed Martin, as its new chief financial officer.
  • AbbVie is set to acquire Capstan for up to $2.1 billion.
  • The Hershey will remove synthetic colors from its snacks by the end of 2027, Bloomberg reports.
  • Bombardier has received an order for 50 Challenger and Global aircraft with associated services worth $1.7 billion, with deliveries expected to begin in 2027.
  • Robinhood is launching digital replicas of US stocks on the European market.
  • Tesla is increasing the price of the long-range version of the Model 3 in China by $1,395.
  • Honeywell acquired Nexceris’ Li-ion Tamer business to enhance battery safety capabilities.
  • The European Commission approved 3G Capital’s acquisition of Skechers, raising no competition concerns.
  • Accenture acquired German automation specialist Systema to strengthen its semiconductor sector capabilities.
  • The UK CMA is reviewing Global Payments’ acquisition of Worldpay over potential competition issues.
  • Bunge completed the sale of its North American corn milling operations to Grain Craft.
  • Amazon is nearing parity between robots and human workers in its warehouses, focusing robot production in the U.S.
  • OpenAI confirmed it is testing Google's AI chips but will continue relying mainly on Nvidia and AMD hardware.

Analyst recommendations:

  • Coterra Energy Inc.: Goldman Sachs downgrades to neutral from buy with a target price of USD 31.
  • Hasbro, Inc.: Goldman Sachs upgrades to buy from neutral with a target price raised from USD 66 to USD 85.
  • Hyatt Hotels Corporation: Raymond James upgrades to strong buy from market perform with a target price of USD 165.
  • Ionis Pharmaceuticals, Inc.: Barclays upgrades to overweight from equalweight with a target price raised from USD 51 to USD 57.
  • Lineage, Inc.: KeyBanc Capital Markets downgrades to sector weight from overweight.
  • Oshkosh Corporation: Goldman Sachs upgrades to buy from neutral with a target price raised from USD 124 to USD 131.
  • Americold Realty Trust, Inc.: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from 30 to USD 23.
  • Carnival Corporation: Wolfe Research maintains its outperform recommendation and raises the target price from USD 24 to USD 33.
  • Fortive Corporation: Wells Fargo maintains its equalweight recommendation and reduces the target price from 72 to USD 55.
  • New Fortress Energy Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from 8 to USD 2.
  • Newmont Corporation: Jefferies maintains its buy recommendation and raises the target price from USD 61 to USD 77.
  • Oracle Corporation: President Capital Management Corp maintains its buy recommendation with a price target raised from 200 to USD 250.
  • Robinhood Markets, Inc.: Mizuho Securities maintains its outperform recommendation and raises the target price from USD 80 to USD 99.
  • Snap Inc.: Wells Fargo maintains its equalweight recommendation and raises the target price from 8 to USD 11.