After Hours Report

Today was the first trading day of the third quarter, and it belonged to the broader market. Small-cap stocks, mid-cap stocks, value stocks, and the "other 493" stocks in the S&P 500 assumed a leadership position, while many of the mega-cap stocks and growth stocks bowed out of today's gains.

The tape had vestiges of rebalancing activity within the stock market. Those efforts were helped along by some optimism about the growth outlook that stemmed from the JOLTS Report showing a sizable increase in job openings in May, the ISM Manufacturing Index showing a slower pace of contraction in June, and the Senate passing its version of the "One Big, Beautiful Bill" in a 51-50 vote that came courtesy of Vice President Vance casting the tiebreaking vote.

This bill has been passed back to the House, which will begin debate at 9:00 a.m. ET on Wednesday, according to House Majority Whip Emmer. A vote will occur after that debate ends, setting up the possibility that the president could have the bill on his desk for signing by July 4.

The Treasury market took in these developments and others with some reservations, thinking they might at least forestall a rate cut in July. The other developments included an observation from Fed Chair Powell at an ECB Forum on Central Banking that the Fed would have likely cut rates already if not for the size of the tariffs that were announced and a Bloomberg TV report that the president isn't thinking about extending the tariff pause past July 9. There were also rumblings from the president that the U.S. isn't likely to make a deal with Japan.

The 2-yr note yield jumped five basis points to 3.77%, while the 10-yr note yield rose only two basis points to 4.25% in a curve-flattening trade.

Today's rebalancing effort in the stock market manifested itself in the outperformance of the equal-weighted S&P 500 (+1.2%) versus the market cap-weighted S&P 500 (-0.1%), which was pressured by losses in Tesla (TSLA 300.71, -16.95, -5.34%), NVIDIA (NVDA 153.29, -4.70, -2.97%), Meta Platforms (META 719.22, -18.87, -2.56%), Microsoft (MSFT 492.05, -5.36, -1.08%), and Alphabet (GOOG 176.91, -0.48, -0.27%).

Tesla's poor showing was exacerbated by concerns over Elon Musk's strong objections to the passage of the "One Big, Beautiful Bill" and the president suggesting that the government might need to look at cutting subsidies for his companies.

The problems for Tesla did not derail the S&P 500 consumer discretionary sector (+0.2%), which was bolstered by the gain in Amazon (AMZN 220.46, +1.07, +0.49%) and strong gains among the casino stocks after an encouraging gross revenue report out of Macau for the month of June.

Today's best-performing sectors were the materials (+2.3%), health care (+1.4%), energy (+0.8%), and consumer staples (+0.8%) sectors. The only two sectors losing ground were communication services (-1.2%) and information technology (-1.1%). The latter would have been down more if not for the strength shown by Apple (AAPL 207.82, +2.65, +1.29%).

Breadth figures conveyed the broad-based buying interest under the index surface. Advancers led decliners by a 3-to-1 margin at the NYSE and by a roughly 5-to-4 margin at the Nasdaq.

• S&P 500: +5.4% YTD
• Nasdaq: +4.6% YTD
• DJIA: +4.5% YTD
• S&P 400: +0.6% YTD
• Russell 2000: -1.6% YTD

Reviewing today's data:

• The June ISM Manufacturing Index increased to 49.0% in June (Briefing.com consensus 48.8%) from 48.5% in May. The dividing line between expansion and contraction is 50.0%, so the June reading suggests that activity in the manufacturing sector contracted at a slightly slower pace than the prior month.
  • The key takeaway from the report is that it has more of a stagflation aura about it (the new orders index and employment index both contracted at a faster pace, while the prices index increased at a faster pace) that will make the Fed's policy deliberations more challenging and the market's view of the Fed's thinking more frustrating.
• Total construction spending decreased 0.3% month-over-month in May (Briefing.com consensus -0.2%) after an upwardly revised 0.2% decline (from -0.4%) in April. Total private construction was down 0.5% month-over-month, while total public construction was up 0.1% month-over-month. On a year-over-year basis, total construction spending was down 3.5%.
  • The key takeaway from the report is the same as the prior month: a downturn in new single-family construction, which is being pressured by higher costs, was the driver behind the weakness in residential spending.
• May JOLTS - Job Openings increased to 7.769 million from an upwardly revised 7.395 million (from 7.391 million). The increase in job openings connotes a labor market that is still on relatively sound footing, which would leave the Fed reluctant to cut rates if inflationary pressures aren't contained.
• June S&P Global U.S. Manufacturing PMI - Final (Actual 52.9; prior 52.0)    

Overseas:

• Europe: DAX -0.8%, FTSE  +0.3%, CAC flat
• Asia: Nikkei -1.2%, Hang Seng closed for holiday, Shanghai +0.4%

Commodities:

• Crude Oil +0.34 @ 65.44
• Nat Gas -0.04 @ 3.45
• Gold +42.20 @ 3350.10
• Silver +0.23 @ 36.39
• Copper +0.02 @ 5.10

After-Hours Spotlight:

• Bank of America (BAC) plans to increase quarterly dividend 8% to $0.28/share... BAC up 0.1%
• BrightView (BV) lowers FY25 revenue guidance, narrows adjusted EBITDA guidance... BV down 8.7%
• Centene (CNC) is withdrawing its previous 2025 GAAP and adjusted EPS guidance after analyzing its first view of 2025 industry Health Insurance Marketplace data from Wakely... CNC down 22.4%
• Constellation Brands (STZ) misses by $0.09, misses on revs, beer segment depletions of (2.6)%; reaffirms FY26 EPS guidance... STZ down 0.4%
• Goldman Sachs (GS) capital plan includes a 33% increase in the common stock dividend from $3.00 to $4.00 per share beginning July 1, 2025, subject to approval by the firm's Board of Directors... GS up 0.1%
• Greenbrier (GBX) beats by $0.88, beats on revs; reaffirms FY25 revs guidance... GBX up 9.2%
• Morgan Stanley (MS) increases quarterly cash dividend to $1.00/share from $0.93/share and authorizes a renewed $20 billion multi-year common equity share repurchase program... MS up 0.3%
• JPMorgan Chase (JPM) to boost dividend to $1.50/share from $1.40/share and approves $50 bln share buyback... JPM up 0.5%
• State Street (STT) announces planned 11% dividend increase to $0.84/share... STT up 0.1%
• TechTarget (TTGT) reports preliminary Q2 revenue below consensus; Reaffirms FY25 guidance... TTGT down 9.3%
• Truist (TFC) plans to maintain current quarterly dividend of $0.52/share and its $5.0 bln share repurchase program remains active... TFC unchanged
• Wells Fargo (WFC) intends to raise dividend by 12.5% to $0.45/share... WFC up 0.1%

Fair Value for Wednesday, July 2:

• S&P 500: 6,249
• Nasdaq 100: 22,691
• DJIA: 44,795

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • BGC Group (BGC) expects Q2 revenue and pre-tax adjusted earnings to be slightly above previously stated outlook ranges
  • J. Sainsbury plc (JSAIY) reports Q1 total retail sales ex-fuel of +4.9%
  • Li Auto (LI) announced that it delivered 36,279 vehicles in June 2025
  • MSC Industrial (MSM) beats by $0.05, reports revs in-line
  • NIO (NIO) provides June and Q2 2025 delivery update
  • Progress Software (PRGS) beats by $0.10, reports revs in-line; guides Q3 EPS in-line, revs in-line; raises FY25 EPS and revenue guidance
  • XPeng (XPEV) announces vehicle delivery results for june and first half 2025
• General News
  • Republicans are considering lowering the amount of the debt ceiling increase in the reconciliation bill in order to win the support of Senator Rand Paul after the Senate parliamentarian did not approve Senator Lisa Murkowski's Medicaid amendment, according to The Hill
  • Israeli Prime Minister Benjamin Netanyahu will meet with President Trump next week, according to AP
  • The Trump administration is considering making narrower trade deals to avoid imposing new tariffs on July 9, according to FT
  • The Senate removed AI regulation ban from the reconciliation bill, according to Reuters
  • The Senate rejected an amendment to the reconciliation bill to increase funding to rural hospitals, according to Politico
  • DOGE considering targeting various SEC rules, according to Reuters
  • White House ensures efficient funding processes and decisions for energy and critical mineral projects
  • President Trump signed a memorandum today strengthening U.S. policy towards Cuba, reversing policy put in place by President Biden, according to Reuters
  • CNN reporting that "Senate Republicans removed a last-minute excise tax on wind and solar projects, according to draft obtained by CNN"
  • CMS issued a proposed rule to update payment rates and policies under the end-stage renal disease prospective payment system
  • Macau Gaming Inspection and Coordination Bureau reported June gross revs +4.4% yr/yr to HKD 21.1 bln versus +16.4% in June of 2024
  • Trump administration plans to prioritize India over Japan in tariff talks ahead of July 9 deadline, according to Nikkei
  • BP Castrol unit attracting bidders, according to Sky News
  • President Trump is not thinking about extending tariff pause past July 9 - BloombergTV
  • President Trump doubts we'll make a deal with Japan - BloombergTV
  • President Trump says that he has two or three top candidates for next FED Chair, according to CNBC
  • Abeona Therapeutics (ABEO) announces that Beacon Therapeutics has exercised its option to license Abeona's patented AAV204 capsid for use in potential gene therapies for a range of prevalent and rare retinal diseases that result in blindness
  • Adagene (ADAG) announces up to $25 million strategic investment from Sanofi (SNY)
  • AGCO Corp (AGCO) announces agreements reached with Tractors and Farm Equipment Limited on key commercial and other issues
  • Allstate (ALL) completes the sale of its Group Health business to Nationwide for $1.25 billion
  • Amazon's (AMZN) AWS introduces DeviceLayout.jl, a software package for computer-aided design of quantum integrated circuits
  • Amazon (AMZN) warehouses could soon have more robots than humans at warehouses, according to WSJ
  • AMC Entertainment (AMC) announces collaborative agreement with creditors to strengthen its balance sheet and position the company to prosper from robust box office recovery
  • Apellis Pharmaceuticals (APLS) to receive up to $300 million from royalty purchase agreement with Sobi for Ex-U.S. royalties of Aspavel
  • Apple (AAPL) analyst Ming Chi Kuo says "Everwin set to benefit from all-new more-affordable MacBook & Apple’s 2027 smart glasses"
  • atai Life Sciences N.V. (ATAI) and Beckley Psytech announce positive topline results from the phase 2B study of BPL-003 in patients with treatment-resistant depression
  • Axos Financial (AX) provides update on expected financial impact of certain income tax items
  • Baidu (BIDU) announced the appointment of Haijian He as Chief Financial Officer of the Company, effective immediately
  • Bally's Corporation (BALY): Intralot (IRLTF) to acquire Bally's International Interactive Business in €2.7 billion cash-and-shares deal (BALY halted)
  • Banco Santander (SAN) confirms plans to acquire TSB from Sabadell (BNDSF) for £2.65 billion in an all-cash transaction
  • Banco Santander (SAN): Banco de Sabadell (BNDSF) selling TSB unit to Santander, according to Reuters citing local newspaper
  • Burford Capital (BUR) issues the following update on two significant developments yesterday; Senate Parliamentarian ruled provisions are not eligible in budget reconciliation bill
  • Burford Capital (BUR): US Senate adopts budget reconciliation bill without litigation finance provisions
  • Cango (CANG) announces June 2025 production update for crypto mining business
  • Collective Mining (CNL) drills 534 g/t Gold & 40 g/t silver over 0.65 metres at the ME target and commences drilling on multiple Apollo look-alike targets outlined by a new gravity survey
  • Crinetics (CRNX) to showcase the next generation of endocrinology innovation at ENDO 2025 with Eight Presentations From its Deep Pipeline
  • EHang (EH) enters into a strategic partnership agreement with Reignwood Aviation Group to create a new model of general aviation and eVTOL collaboration in the low-altitude economy
  • Energy Fuels (UUUU) announces that its Pinyon Plain uranium mine in Arizona continues to significantly exceed previous production estimates
  • Entergy (ETR) completes sale of its natural gas distribution business to Delta Utilities, a company backed by Bernhard Capital Partners
  • eXp World Holdings (EXPI) announced the official launch of CRM of Choice, a strategic technology initiative that reinforces eXp’s commitment to agent autonomy and innovation
  • Fluor (FLR) announces that LNG Canada has successfully shipped the first liquefied natural gas export cargo from its newly-constructed facility located in the traditional territory of the Haisla Nation in Kitimat, British Columbia, Canada
  • General Dynamics (GD) awarded a $150 mln US Army contract
  • General Motors (GM) announced that its U.S. sales increased 7% in the second quarter and 12% in the 2025 first half
  • Honda Motor's (HMC) American Honda reports June sales +1.5% yr/yr to 114,486 units
  • Ingevity (NGVT) announces departure of Performance Materials segment president, Ed Woodcock
  • Interactive Brokers (IBKR) reports its Electronic Brokerage monthly performance metrics for June; 3.448 mln DARTs, 40% higher than prior year and 2% higher than prior month
  • IREN Limited (IREN) achieves mid-year target of 50 EH/s
  • Jade Biosciences (JBIO) announces the appointment of Brad Dahms as Chief Financial Officer
  • Kura Oncology (KURA) and Kyowa Kirin entered into a Co-Promotion and Medical Affairs Agreement on June 27
  • Legend Biotech (LEGN) confirmed the EMA published a recommendation for CARVYKTI to add sentence to the Summary of Product Characteristics (SmPC) special warnings and precautions
  • Lumen Technologies (LUMN) advances financial strategy to support AI-Era infrastructure growth; closes $2 billion of first lien notes due 2033
  • Mesoblast (MESO) and FDA align on key items for Revascor biologic license application in ischemic heart failure
  • Nexa Resources (NEXA) announces that operations at Cajamarquilla smelter have fully resumed at normal capacity utilization levels
  • Nippon Steel Corporation (NPSCY) dismisses litigation against Former President Biden and CFIUS
  • NovoCure (NVCR) to present final secondary endpoint data from the Phase 3 PANOVA-3 trial of tumor treating fields in Pancreatic Cancer at the ESMO Gastrointestinal Cancers Congress 2025
  • NVIDIA (NVDA) confirms Annual Meeting of Stockholders outcome with several items not approved
  • Paramount Global (PARA): Texas court releases updated filing regarding settlement talks between President Trump & Paramount
  • Polestar Automotive Holding UK PLC (PSNY) has restated the Audited Affected Financials with the 20-F/A, and is filing this amendment now to restate the unaudited interim financial information for the six-month periods ended June 30, 2024 and 2023 included in the original report
  • RedHill Biopharma (RDHL) announces recruitment initiated into expanded Phase 2 Opaganib/Darolutamide combination study in advanced prostate cancer
  • Sequans Communications (SQNS) releases investor presentation relating to its expected Bitcoin treasury strategy
  • South Bow Corporation (SOBO) receives presidential permit
  • Strategic Education's (STRA) education benefits management platform, Workforce Edge, announces new collaboration with Best Buy (BBY)
  • Super Micro Computer (SMCI) announces certification by Intel for an immersion cooling solution
  • Sturm Ruger (RGR) announces asset purchase of Anderson Manufacturing
  • Tesla (TSLA): President Trump says DOGE should take a "good hard look" at subsidies to Elon Musk's companies after Mr. Musk criticized the reconciliation bill again
  • Tesla (TSLA) sales drop in Sweden and Denmark, according to Reuters
  • The Real Brokerage (REAX) announced its acquisition of the AI-powered consumer home search portal and related technology assets of Flyhomes
  • Thermon Group (THR) Board of Directors has appointed Thomas Cerovski as the Company’s Senior Vice President and Chief Operating Officer, effective immediately
  • Toyota Motor (TM) North America reports June and Q2 2025 U.S. sales results
  • Tutor Perini (TPC) awarded $1.871 bln NYC contract
  • Verint Systems (VRNT) reportedly seeking buyer as AI threatens call center business model, according to Semafor
  • Vertex Pharma (VRTX) announces that the European Commission has granted approval for ALYFTREK for the treatment of people with cystic fibrosis ages 6 years and older who have at least one non-class I mutation in the cystic fibrosis transmembrane conductance regulator gene

• Upgrades:
  • C.H. Robinson (CHRW) upgraded to Outperform from Peer Perform at Wolfe Research, tgt $112
  • Cintas (CTAS) upgraded to Equal Weight from Underweight at Wells Fargo, tgt $221
  • Hasbro (HAS) upgraded to Buy from Neutral at Goldman, tgt $85
  • Hyatt (H) upgraded to Strong Buy from Market Perform at Raymond James, tgt $165
  • Ionis Pharmaceuticals (IONS) upgraded to Overweight from Equal Weight at Barclays, tgt $57
  • Melco Resorts (MLCO) upgraded to Overweight from Neutral at JPMorgan, tgt $9.50
  • Nike (NKE) upgraded to Buy from Hold at Argus, tgt $85
  • Oshkosh (OSK) upgraded to Buy from Neutral at Goldman, tgt $131
  • Ovintiv (OVV) upgraded to Buy from Neutral at Goldman, tgt $51
  • Ryder (R) upgraded to Outperform from Peer Perform at Wolfe Research, tgt $159
  • Solventum (SOLV) upgraded to Buy from Hold at Argus, tgt $90
• Downgrades:
  • Avino Silver & Gold Mines (ASM) downgraded to Neutral from Buy at Roth Capital, tgt $3.50
  • Coterra Energy (CTRA) downgraded to Neutral from Buy at Goldman, tgt $31
  • Hecla Mining (HL) downgraded to Neutral from Buy at Roth Capital, tgt $6
  • INmune Bio (INMB) downgraded to Underperform from Outperform at Scotiabank, tgt $0.60
  • INmune Bio (INMB) downgraded to Neutral from Buy at BTIG
    
  • Lineage (LINE) downgraded to Sector Weight from Overweight at KeyBanc
  • Southern Copper (SCCO) downgraded to Neutral from Buy at UBS, tgt $105
  • Sweetgreen (SG) downgraded to Hold from Buy at TD Cowen, tgt $19
  • Textron (TXT) downgraded to Neutral from Buy at Goldman, tgt $85
• Others:
  • Alpha Metallurgical (AMR) initiated with a Hold at Jefferies, tgt $110
  • Amrize (AMRZ) initiated with a Neutral at Goldman, tgt $57
  • Black Diamond Therapeutics (BDTX) resumed with an Outperform at Raymond James, tgt $11
  • CarMax (KMX) assumed with an Overweight at Morgan Stanley, tgt $80
  • Carrier Global (CARR) initiated with a Hold at Melius Research, tgt $90
  • Celcuity (CELC) resumed with a Buy at Stifel, tgt $30
  • CleanSpark (CLSK) initiated with a Buy at B. Riley Securities, tgt $16
  • Compass Therapeutics (CMPX) resumed with an Outperform at Raymond James, tgt $9
  • CoreCivic (CXW) initiated with a Buy at Texas Capital, tgt $28
  • Crexendo (CXDO) initiated with a Buy at Needham, tgt $8
  • First Busey (BUSE) initiated with an Overweight at Piper Sandler, tgt $30
  • Gen Digital (GEN) resumed with an Outperform at Evercore ISI, tgt $35
  • Genius Sports (GENI) initiated with a Buy at Truist, tgt $14
  • Geo Group (GEO) initiated with a Buy at Texas Capital, tgt $30
  • Hippo (HIPO) initiated with a Buy at B. Riley Securities, tgt $35
  • Kite Realty (KRG) initiated with a Neutral at UBS, tgt $24
  • Krystal Biotech (KRYS) initiated with a Buy at Clear Street, tgt $190
  • MasTec (MTZ) initiated with a Buy at Roth Capital, tgt $210
  • New Fortress Energy (NFE) initiated with a Buy at Compass Point, tgt $8.50
  • Omada Health (OMDA) initiated with a Buy at Canaccord, tgt $27
  • Omada Health (OMDA) initiated with a Buy at Goldman, tgt $29
  • Omada Health (OMDA) initiated with a Buy at Needham, tgt $23
  • Omada Health (OMDA) initiated with an Overweight at Barclays, tgt $21
  • Omada Health (OMDA) initiated with an Overweight at JPMorgan, tgt $19
  • Omada Health (OMDA) initiated with an Overweight at Morgan Stanley, tgt $25
  • Porch Group (PRCH) initiated with a Buy at B. Riley Securities, tgt $15
  • QXO (QXO) initiated with a Buy at Truist, tgt $30
  • Rollins (ROL) initiated with an Overweight at Piper Sandler, tgt $70
  • Sportradar (SRAD) initiated with a Buy at Truist, tgt $33
  • Summit Therapeutics (SMMT) initiated with a Buy at UBS, tgt $30
  • Verona Pharma (VRNA) initiated with an Outperform at Wolfe Research, tgt $170

• Econ Data (Wednesday):
  • 07:00 ET: MBA Mortgage Applications Index (prior 1.1%)
  • 08:15 ET: June ADP EMployment Change (Briefing.com consensus 97K; prior 37K)
  • 10:30 ET: EIA Crude Oil Inventories (prior -5.84M)
• Earnings:
  • Monday (June 30)
    • Pre-Market: None
    • After-Hours: PRGS
    Tuesday (July 1)
    • Pre-Market:  MSM
    • After-Hours:  STZ, GBX
      
  • Wednesday (July 2)
    • Pre-Market:  UNF
      
    • After-Hours:  None
  • Thursday (July 3)
    • Pre-Market:  None
    • After-Hours:  None
  • Friday (July 4)
    • Market closed for Independence Day
  General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike