The $S&P 500(.SPX)$ and $NASDAQ(.IXIC)$ fell by 2.58% and 2.38%, respectively, last week.
Major movers included: $Intuit(INTU)$ (+7.4%), $Alphabet(GOOG)$ (+1.4%), $Philip Morris(PM)$ (+4.6%), $Procter & Gamble(PG)$ (+1.6%), $Apple(AAPL)$ (−7.6%), $NVIDIA(NVDA)$ (−3.0%), $Amazon.com(AMZN)$ (−2.2%), $Eli Lilly(LLY)$ (−5.8%), and $Microsoft(MSFT)$ (−0.9%).
Key economic events this week: FOMC minutes and Q1 GDP (Thursday), and PCE inflation data (Friday).
Major earnings announcements: $Salesforce.com(CRM)$ and $NVIDIA(NVDA)$ (Wednesday), $Costco(COST)$ and $Marvell Technology(MRVL)$ (Thursday).
Read more>> Weekly: Trade tension and Nvidia earnings to weigh on markets again
What Investors Should Know Before the Week Begins
1) Rising Long-Term Bond Yields Could Trigger Equity Market Pressure
The U.S. 10-year Treasury yield $US10Y(US10Y.BOND)$ rose to 4.494% as of Tuesday, up 1% over the past week, and briefly touched 4.627% mid-week.
This sharp move in yields is raising concerns about potential stock market sell-offs.
Key Drivers of the Bond Sell-Off:
• Higher Japanese bond yields: Attractive returns on Japanese government bonds may be prompting investors to rotate out of U.S. Treasuries in favor of JGBs.
• "Big Beautiful Bill" raises fiscal concerns: The recently passed U.S. tax and spending package — known as the “Big Beautiful Bill” — is projected to add $3.8 trillion to the national debt over the next decade. While the bill may benefit equities in the short term through tax cuts and stimulus, it dampens demand for long-term Treasuries, pushing yields higher due to growing concerns over fiscal sustainability.
Why It Matters for Stocks:
If long-term bond yields continue to rise too quickly, equities may come under pressure due to:
Valuation compression (future cash flows discounted at higher rates)
Margin compression (from higher borrowing costs)
Rising inflation expectations
2) U.S. House Approves Trump’s Tax Cut Bill
The House narrowly passed the “Big Beautiful Bill,” which includes sweeping tax cuts and spending measures.
The bill is now under Senate review, where Senate Republicans are expected to propose major amendments.
Senate Majority Leader John Thune aims to pass the bill by July 4, 2025.
According to the Tax Foundation, the bill’s tax provisions alone could reduce federal revenue by $4.1 trillion between 2025 and 2034.
Despite fiscal concerns, the bill’s potential passage could boost investor sentiment and support equity buying.
Key Proposed Tax Cuts:
Tax exemption for tips and overtime pay
Child tax credit increase: From $2,000 to $2,500, through 2028, for filers with valid Social Security Numbers
Higher SALT deduction cap: From $10,000 to $40,000 for couples earning up to $500,000
Estate tax exemption increase: Likely keeps the threshold near $13 million per person / $26 million per couple, allowing more wealth transfer tax-free
3) Trump Re-Escalates EU Tariffs to Advance Trade Talks
After announcing new tariffs on the EU, Trump quickly postponed their enforcement until July 9.
The tariff move may also be a strategic attempt to pressure equity markets and redirect capital flows toward U.S. Treasuries, especially as the EU trade imbalance with the U.S. is smaller than that of China.
Notably, $8.1 trillion in U.S. government debt is set to mature between now and the end of 2025, with $5.1 trillion maturing by the end of July, highlighting the need to sustain strong Treasury demand.
4) $NVIDIA(NVDA)$ Earnings on Wednesday Likely to Influence Broader Market Direction
Nvidia will report earnings this Wednesday after market close, a key event for tech and AI-related stocks.
The stock has already rallied nearly 21% over the past month, suggesting much of the earnings optimism may be priced in.
Risks remain if the company issues cautious guidance, particularly due to U.S. export restrictions on advanced chips that could weigh on future growth.
5 $S&P 500(.SPX)$ Holding Above 200-Day Moving Average—for Now
The S&P 500 closed at 5,802 on Friday, staying above its near-term support at the 200-day moving average (5,773).
While bulls may argue that bear market rallies rarely reach such elevated levels, the May 19 high sits just 3% below the all-time peak—yet without breaking into new highs, the risk of a near-term pullback still lingers.
If the index breaks below the 200-day moving average, Fibonacci analysis suggests a potential correction toward the 5,500 level.
Conclusion
Bond yield movements and Nvidia’s earnings announcement are likely to be the key drivers of equity market direction this week. A retest of the 10-year yield at 4.6% or even 5.0% could trigger a renewed and broader equity sell-off.
Investors seeking exposure to a potential market rebound may consider broad-market ETFs such as $SPDR S&P 500 ETF Trust(SPY)$ , $iShares Core S&P 500 ETF(IVV)$ , and $Vanguard S&P 500 ETF(VOO)$ , as well as the $Invesco QQQ(QQQ)$ .
AI software companies like $Palantir Technologies Inc.(PLTR)$ , $Salesforce.com(CRM)$ , $CrowdStrike Holdings, Inc.(CRWD)$ , and $Snowflake(SNOW)$ appear less affected by the ongoing tariff tensions, as the measures have largely targeted physical goods rather than digital services.
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