After setting pre-Independence Day records, stocks slipped as tariff worries returned. Plus, Netflix gets last laugh. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

By Teresa Rivas | Monday, July 7

Good News and Bad News. Markets declined to start the week as tariffs once again took center stage.

The Dow Jones Industrial Average and the Nasdaq Composite both fell 0.9% while the S&P 500 slid 0.8%.

After cycling through the five stages of grief, markets had largely accepted the idea of a base level of 10% tariffs. Yet that might have been too optimistic. President Donald Trump issued letters to multiple countries outlining new tariff levels, which range from 25% for Japan, South Korea, Malaysia, and Kazakhstan, to 30% for South Africa, and 40% for both Laos and Myanmar.

Of course, investors should have been braced for this, and perhaps that explains a less precipitous drop for markets after they raced to new highs last week. "The Trump administration appears to retain its escalate-to-deescalate approach,” Ulrike Hoffmann-Burchardi, UBS’s chief investment officer for global equities, has noted, warning further trade volatility seems inevitable, if not terribly significant. “Trump has demonstrated a willingness to shock the market with tariff demands that he later modifies.”

Investors are likely hoping that pattern holds. And there is some good news: Although Wednesday marks the initial end of the 90-day reciprocal tariff pause, the Trump administration said it extended that to Aug. 1, giving time for those numbers to come down.

That said, even the good news comes with an asterisk, as it just adds to the time that companies and consumers are left in tariff limbo, hoping the extra weeks lead to better outcomes.

Ultimately, the headline numbers from Monday don’t move the needle all that much, notes Capital Economics Chief North America Economist Paul Ashworth, given that much of those nations’ exports were already covered under the separate levies for autos, electronics, and pharmaceuticals. He estimates the overall effective tariff rate on U.S. imports would rise from 15.5% to 16.6%.

Summer may be speeding by too quickly for many, but it doesn’t look like we’ll get a quick resolution to the tariff question this week.

DJIA: -0.94% to 44,406.36
S&P 500: -0.79% to 6,229.98
Nasdaq: -0.92% to 20,412.52

The Hot Stock: Tractor Supply Company +3.9%
The Biggest Loser: Tesla-6.8%

Best Sector: Utilities+0.2%
Worst Sector: Consumer Discretionary-1.3%

Netflix's Last Laugh

The Magnificent Seven have been less than stellar in 2025, with the group -- as tracked by the Roundhill Magnificent Seven exchange-traded fund -- trailing the broader market year to day. Yet longtime tech investors probably remember FAANG, the previous acronym for ‘it’ tech stocks; Netflix may be the only one of those that didn’t make the transition to the Mag 7, but it’s had the last laugh. The stock is up more than 44% so far in 2025, and some 86% in the past year.

But is the market about to hit pause on the shares? One analyst says yes: Seaport’s David Joyce cut his rating to Neutral over the weekend, as my colleague Angela Palumbo reports.

Of course, that comes after impressive growth: Revenue and subscribers are up after the company cracked down on password sharing and introduced a cheaper model that includes ads.

Here’s more from Angela's article:

The Wall Street Journal reported in April that Netflix executives were aiming for a $1 trillion market cap and believe that the company could double its revenue by 2030. Management said on its last earnings call that while they often have internal meetings where they talk about long-term goals, “it’s important to note that this is not the same as forecast.” Netflix currently has a market cap of $552 billion.
The company has a long road ahead if it wants to hit those goals, though it isn’t an impossible task. Analysts say if Netflix focuses on hosting more live content, such as sporting events, it could help the company keep gaining new subscribers.
Seaport’s Joyce, however, thinks that optimism is already priced into the stock at its current levels.
“We believe that plenty of the long-term opportunity set is factored into the shares at this price, and the company needs time to execute against the expectations in advertising, aggregating, launching experiences, and expanding share again,” Joyce said.

That said, Netflix has proved skeptics wrong in the past, and Joyce’s downgrade is far from bearish. Besides, with everyone stressing about tariffs, binge-watching comfort shows may be more popular than ever.

The Calendar

The National Federation of Independent Business releases its Small Business Optimism Index for June tomorrow. The consensus estimate is for a 97.9 reading, about one point less than in May. That would be right in line with the 51-year average of 98 for the index.

The Federal Reserve Bank of New York releases its Survey of Consumer Expectations for June. In May, consumers’ expectations of the year ahead inflation was 3.2%, moderating after hitting a 19-month high of 3.6% in April.

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