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July 1, 2025 – 05:18
(Bloomberg) — Stocks kicked off the second half by building on a record-breaking rally as expectations grow that the US economy will withstand uncertainties from President Donald Trump’s tariff agenda.
The MSCI All Country World Index, which closed at a record on Monday, gained for a fourth day. Equity gauges in Taiwan and South Korea led advances in Asia, while contracts for the S&P 500 were flat after the benchmark notched its best quarter since December 2023.
“I do think the second half is actually pretty positive still,” Jun Bei Liu, founder and lead portfolio manager at Ten Cap in a Bloomberg Television interview. “We disagree with many calling for a big sharp fall in the share market. We think the fundamentals of the share market are pretty strong.”
Wall Street’s bulls drove stocks to all-time highs at the end of a solid quarter, amid hopes the US is moving closer to reaching concrete deals with its top trading partners. Bets the Federal Reserve will resume rate cuts powered the best first-half stretch for Treasuries in five years.
Still, broader uncertainty over Trump’s tariff and fiscal agenda on the long-term structure of the US economy can be seen in the dollar posting a 10.8% slide in the year’s opening six months — its worst first-half performance since 1973. The president’s $3.3 trillion tax and spending bill, which members of the Senate are arguing over, has raised concerns of the country’s growing deficit.
Japanese shares fell as much as 1.1% as Trump threatened to impose a fresh tariff level on the country and the yen strengthened, which hurts exporters.
Trump’s latest round of brinkmanship on Japan came as the July 9 deadline for higher tariffs to restart for dozens of trading partners, nears. He cited what he said was Japan’s unwillingness to accept US rice exports. Earlier, the president had characterized trade in cars between the two countries as unfair and floated the idea of keeping 25% tariffs on autos in place.
“Trump appears to be recycling his signature escalate-to-deescalate tactic, much like he did with China,” said Hebe Chen, a market analyst at Vantage Markets in Melbourne. “With the July 9 deadline approaching, more bluff and bluster should be fully expected.”
A stronger yen also weighed on Japanese stocks after confidence among Japan’s large manufacturers edged up in June. The better-than-expected reading for sentiment at large manufacturers is likely to give Bank of Japan Governor Kazuo Ueda confidence he can keep the debate around a potential rate hike on the agenda when his board next meets at the end of the month.
Separately, the Taiwan dollar surged more than 2%, reversing a loss of similar magnitude on Monday.
Meanwhile, a Bloomberg gauge of the dollar fell for a sixth consecutive month in June, matching its longest run of monthly losses in eight years, as investors considered the latest version of Trump’s massive fiscal package working through Congress. It was little changed on Tuesday.
“We see a structural decline in the dollar and there’s just a whole host of channels for where we see dollar weakness coming through,” said Mahjabeen Zaman, head of FX research at ANZ Banking Group Ltd. “The US economic momentum doesn’t look great. Fed independence is at question and there are a whole host of other question marks around the US fiscal agenda as well. So I think all of that is really pointing to a weaker dollar.”
Just days ahead of the US jobs report, bonds rose Monday. Goldman Sachs Group Inc. projected the Federal Reserve to cut rates in September as the inflationary effects of tariffs “look a bit smaller” than expected.
The June employment report, due on Thursday given the July 4 holiday on Friday, is forecast to show growth in the workforce easing to about 110,000 new jobs from 139,000 the prior month, according to economists surveyed by Bloomberg. The unemployment rate is seen nudging up to 4.3%.
In Asian corporate news, a key unit of Japanese conglomerate SoftBank Group Corp. sold $1 billion of dollar bonds in the unit’s first US high-grade deal.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 12:16 p.m. Tokyo timeJapan’s Topix fell 0.8%Australia’s S&P/ASX 200 was little changedThe Shanghai Composite was little changedEuro Stoxx 50 futures were little changed
Currencies
The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1791The Japanese yen rose 0.2% to 143.68 per dollarThe offshore yuan was little changed at 7.1583 per dollar
Cryptocurrencies
Bitcoin fell 0.4% to $107,160.83Ether fell 0.7% to $2,487.24
Bonds
The yield on 10-year Treasuries declined one basis point to 4.22%Japan’s 10-year yield was unchanged at 1.425%Australia’s 10-year yield declined four basis points to 4.12%
Commodities
West Texas Intermediate crude fell 0.5% to $64.76 a barrelSpot gold rose 0.4% to $3,317.44 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carmeli Argana, Alice French and Joanne Wong.
©2025 Bloomberg L.P.
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