Volatility is opportunity, so goes the market mantra. And there’s plenty of both to go around Tuesday.
The stock market showed its resilience, or at least its bias toward optimism, as the three main indexes rebounded after the selloff late last week. The S&P 500 closed above 6000 Monday, just one day after slipping below the milestone. When the index fell below that level in February, it took 72
trading days to break the 6000 mark again.
That strength may well be tested in the days ahead, particularly after Israel and Iran continued to trade strikes overnight. U.S. President Donald Trump left the Group of Seven meeting in Canada early due to the Middle East tensions.
In a post on his Truth Social platform, Trump called on Tehran to be evacuated before he later said his return to the U.S. was for something “much bigger” than a cease-fire.” In another social media post early Tuesday
he said: “I have not reached out to Iran for ‘Peace Talks’ in any way, shape, or form.”
All of that suggests volatility ahead. But if investors look beyond Middle East turmoil, the near-term price action could present an opportunity to entrench longer term views.
Bears, who see the economy and the stock market weakening, could use any market boost to reduce their positions, while bulls could do the opposite with any significant move to the downside.
But those on the fence will be disappointed with
how the G-7 gathering has panned out. Any progress on trade issues has largely been overshadowed by the geopolitical crisis.
For now, the focus remains very much on Iran and Israel—even Wednesday’s Federal Reserve decision is taking a back seat. But investors can still make the most of the market’s distraction.
—Callum Keown
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SALT Divides GOP as Senate Unveils Megabill Changes
The Senate committee working on changes to the tax and spending megabill is
likely to face resistance. Already, the changes unveiled late Monday afternoon fail to resolve a contentious fight over state and local tax deductions, something that could derail plans to get a bill to the president by July 4.
- GOP lawmakers are seeking to make certain business deductions permanent, such as research and
development and write-offs for interest expenses. The House also included those tax provisions, but to limit the overall bill’s costs, set them to expire in 2029.
- For the cap on state and local taxes, or SALT, the Senate’s bill keeps the current $10,000 cap, subject to ongoing negotiation. The House bill raised the cap to $40,000 for households making less than $500,000, under pressure from lawmakers who say a lower cap is a nonstarter.
- The Senate mostly kept the so-called “revenge tax” on foreign investment from countries deemed to have discriminatory tax regimes. But it delayed the effective date a year to Dec. 31, 2026, and clarifies that the tax wouldn’t apply to “portfolio interest” paid by some investments such as Treasuries.
- Among other differences, a $4,000 deduction for taxpayers over the age of 65 in the House version of the bill was increased to $6,000 in the Senate text, and while the House increased the federal debt limit by $4 trillion, the Senate would increase it by $5 trillion.
What’s Next: While the Senate bill cuts back clean-energy tax breaks included in the Inflation Reduction Act, it phases them out more slowly, and it makes more aggressive cuts to Medicaid spending. Changes need to be reconciled in a final bill before Trump could sign it into law. For more read here.
—Joe Light
U.S., U.K. Show Off Signed Trade Deal at G-7
As world leaders ended their first day at the Group of Seven summit in Alberta, Canada, a lot of the talk swirled around trade and tariffs—and one-on-one time with President Trump. In the afternoon, President Donald Trump and U.K. Prime Minister Keir Starmer showed off a signed deal.
- The U.S.-U.K. deal includes billions of dollars of increased market access for American exports, especially for beef, ethanol, and certain other American agricultural
exports, according to a text of the deal posted to X. The U.S. left steel tariffs in place.
- Under the terms, the first 100,000 vehicles imported to the U.S. from the U.K. would be subject to a 10% tariff. Automotive parts imported to the U.S. will be tariffed at a 10% rate. The U.K. will also get most-favored-nation tariff rates for steel and aluminum imports if it meets certain requirements.
- Other aspects of a deal are still being ironed out between the U.S. and U.K. The two countries agreed to negotiate “significantly preferential treatment outcomes” on pharmaceuticals from the U.K. and to negotiate trade terms for certain other sectors.
- Trump said there
were “many other” deals coming. He met with Canadian Prime Minister Mark Carney in the morning, and with European Union President Ursula von der Leyen and Japanese Prime Minister Shigeru Ishiba, who is trying to ease a 25% U.S. levy on cars.
What’s Next: Trump told reporters that different concepts on tariffs are holding up a deal with Canada, calling himself a “tariff person” and calling Carney’s idea “more complex.” Officials from both delegations said they were making progress.
—Anita Hamilton and Liz Moyer
Trump Family’s Business Getting Into Mobile Phones
Get ready for more gold smartphones. The Trump Organization, the family-run business of President Trump, has licensed its name for a new U.S. mobile communications operation and a $499 American-made smartphone, taking aim at Apple and Samsung. Trump’s sons Eric and Don Jr. will oversee it.
- Trump Mobile will offer 5G service over the three big U.S. cellular carriers—Verizon Communications, AT&T, and T-Mobile US—through resale deals. Known as mobile virtual network operator agreements, the deals let carriers sell excess capacity on their networks.
- Plans are priced at $47.45 a
month—a nod, perhaps, to Trump’s tenure as the 45th and 47th president. The Trump Organization didn’t provide details on the
