Good Morning Investors
The bull market continues to shrug off tariff chaos and political noise, pushing higher on earnings optimism and AI-driven momentum. On Thursday, the S&P 500 ($SPY ( ▲ 0.18% )) gained 0.3% to notch a fresh record close, the Nasdaq ($QQQ ( ▲ 0.18% )) rose 0.1% to another all-time high, and the Dow ($DIA ( ▲ 0.26% )) added 0.4%. Once again, Nvidia ($NVDA ( ▼ 0.04% )) led the charge, closing above a $4 trillion market cap for the first time.
This is what happens when earnings momentum meets skeptical sentiment. While politicians trade threats and pundits predict doom, companies keep delivering results that matter. The market’s message is clear: it’s betting on American innovation over Washington theatre.
Opening Bell: Tariffs Turn Theatrical, Stocks Stay Focused
Futures are slightly lower this morning, with S&P 500 futures down 0.5%, Nasdaq futures off 0.4%, and Dow futures dropping 0.5%. Investors are digesting the tariff volleys while positioning for next week's big earnings kickoff and June CPI data.
President Trump announced a 35% tariff on Canadian imports starting next month and floated blanket tariffs of 15% to 20% on most other trading partners. The move, justified as part of efforts to curb fentanyl, underscores the unpredictable use of tariffs as political tools. Canada hinted at retaliation, but markets largely brushed it off.
Investors are increasingly immune to these tariff threats, treating them as negotiating gambits rather than genuine economic headwinds. Even as letters threatening new levies continue to land in inboxes worldwide, stocks remain focused on earnings and cash flows, not campaign rhetoric.
Strategic Outlook: Staying the Course Through Noise
After a rollercoaster first half, the market sits on a foundation stronger than the headlines suggest. Despite tariff whiplash, including the infamous "Liberation Day" shocks and policy reversals, the economy is still growing close to trend, and leading indicators aren't flashing recession. In fact, current earnings estimates for 2026 sit around $298 per share, and forward P/E ratios are holding steady between 20 and 22 times. This supports my base case that the S&P 500 can reach 6,500 by year-end, with total returns in the 12% to 15% range.
Yes, tariff risks are real, and policy tweets can knock markets off balance faster than a dodgy pint on a Friday night. But historically, sharp pullbacks like the near 19% correction earlier this year have reset sentiment and paved the way for powerful rallies. After similar near-bear episodes, markets have averaged nearly 30% gains over the following year. I expect any further dips to be relatively shallow and to present strong buying opportunities rather than structural threats. In my view, the combination of robust fiscal support, resilient earnings, and investor pessimism sets the stage for an upside surprise rather than a downturn. Staying invested and clear-headed is the name of the game, or as we might say, keep your head when everyone else is losing theirs.
Corporate Check-In: Denim, Chips, and Jets
Levi Strauss ($LEVI ( ▲ 0.46% )) beat quarterly expectations, raising its full-year outlook thanks to strong European denim demand even amid tariff uncertainty. Revenue hit $1.45 billion, above the $1.37 billion forecast, and the company now sees fiscal 2025 revenue growing 1% to 2%.
Nvidia ($NVDA ( ▼ 0.04% )) closed above $4 trillion in market cap for the first time, highlighting its pivotal role in AI's explosive growth. As I've argued since April, Nvidia is not just a semiconductor company. It's the backbone of global AI infrastructure.
Tesla ($TSLA ( ▲ 0.05% )) is set to open its first India showroom in Mumbai next week, marking a major move into the world's third-largest car market despite steep import duties.
Delta's ($DAL ( ▼ 0.1% )) strong earnings continue to uplift the airline sector. After reinstating its 2025 profit outlook and reporting strong premium cabin growth, Delta shares surged 11%, dragging other airline stocks higher.
Bitcoin: The Stealth Leader of Risk Appetite
Bitcoin ($BTC.X ( ▲ 1.48% )) has reasserted itself as a leading indicator of risk appetite, surging to a new high of $118,000 and breaking out of its consolidation range. The move is backed by record inflows into bitcoin ETFs ($1.18 billion this week) and renewed institutional confidence ahead of next week's "Crypto Week" hearings in Congress. Ether also rebounded strongly, topping $3,000 and attracting its second-largest ETF inflows ever. The short liquidations, now exceeding $650 million in bitcoin alone, have added fuel to the rally. With the Fed's future leadership potentially tilting dovish and deficit concerns supporting the "digital gold" narrative, I maintain my $150,000 price target. In many ways, bitcoin's resilience mirrors broader market sentiment: skeptical but ultimately convinced by momentum and fundamentals.
Analyst Recommendations
Amazon ($AMZN ( ▲ 0.07% )): Piper Sandler raised its price target to $250 from $212, driven by stronger near-term revenue expectations.
Delta Air Lines ($DAL ( ▼ 0.1% )): JP Morgan boosted its target to $72 from $66, citing loyalty economics and robust premium travel demand.
Levi Strauss ($LEVI ( ▲ 0.46% )): JP Morgan raised its target to $23 from $18, pointing to accelerating global demand momentum.
LPL Financial ($LPLA ( ▼ 0.42% )): JP Morgan increased its target to $412 from $382, benefiting from industry consolidation and higher rates.
Netflix ($NFLX ( ▼ 0.72% )): Piper Sandler lifted its target to $1,400 from $1,150 on stronger ad revenue contributions.
Final Thoughts
Tariffs may dominate the headlines, but earnings and real economic data will ultimately steer the ship. The resilience of the consumer, robust corporate margins, and strong cash flows continue to support the rally even as pundits call for caution.
This remains a rally that people love to hate, but as history has shown, skepticism is the oxygen for bull markets. Stay opportunistic, stay patient, and trust in the data, not the noise.
Please feel free to reach out to me on LinkedIn or by email if you'd like help navigating this environment or have any planning questions.
Dan Sheehan [email protected]
This newsletter is for informational purposes only and should not be considered investment advice. Please consult your financial advisor about your specific situation.