Powell boosts optimism
Wednesday was all about the anticipation surrounding the release of the minutes from the U.S. Federal Reserve’s June FOMC meeting. On the one hand, market participants weren’t expecting anything new. On the other – they were hoping to catch a few sparks of optimism in the comments from Committee members. And, as it turned out, those sparks were indeed there. As the saying goes: those who seek shall find.
At the June meeting, FOMC members noted that the Fed is «well positioned to wait» for greater clarity on the outlook for inflation and economic activity – particularly in light of President Donald Trump’s ongoing push for high tariffs on imports from key U.S. trading partners.
As Santander analyst Stephen Stanley aptly put it, «The problem for the Fed is they can't decide what to do until they see impact come through and then dissipate, particularly on the inflation side. So, the Fed is definitely still in a waiting game. If the inflation story drags out longer, the Fed waits a little longer».
Still, the minutes revealed only limited support for a rate cut immediately after the next Fed meeting later this month. Only a couple of officials backed a faster pace of easing. After the June meeting, Fed Governors Christopher Waller and Michelle Bowman publicly voiced support for a rate cut in July.
This time around, Fed members were slightly more upbeat in their assessment of the economic outlook. According to them, recession fears have somewhat eased over the past six weeks.
However, despite this more positive stance, some Fed officials have grown more concerned about the labour market, noting that certain indicators are already showing «signs of weakness».
Overall, investors responded positively to the minutes – the market began to rise steadily after the release, ending the day near session highs. The NASDAQ Composite once again posted a record high, both in absolute terms (20,645 points) and at the close (20,611 points), gaining 0.94% on the day.
The other two major U.S. indexes – the Dow Jones (DJIA-30) and S& P500 — also finished the day in solid positive territory, up 0.49% and 0.61% respectively. However, unlike the NASDAQ, the S&P 500 fell just short of a new all-time high, missing by only 0.2%.
Among individual stocks, the star of the day was Nvidia (NVDA), whose market capitalisation briefly surpassed the $4 trillion mark for the first time (although it dipped slightly below that level by the close).
Just a year ago, Nvidia had crossed the $1 trillion threshold. In just 12 months, it has quadrupled in value – a faster rise than either Apple (AAPL) or Microsoft (MSFT) ever achieved. Once known for its gaming graphics processors, then for its crypto-mining chips, Nvidia is now the leading force behind global artificial intelligence infrastructure.
At present, the company makes up 5.3% of the S&P500 index – a larger share than Apple or Microsoft. Since the start of the year, its stock has risen 22%. After falling in April due to Trump’s tariff rhetoric and anxiety over Chinese AI, Nvidia quickly recovered, gaining 74% from its lows.
This sharp rebound is not just hype. It is backed by stellar financials. In the first quarter, revenue soared 69% to $44.1 billion, with earnings per share of $0.81. For the second quarter, Nvidia expects revenue of around $45 billion (plus or minus 2%) – a figure it will confirm in its report on 27 August.
Despite the spectacular rally, Nvidia is trading at a forward P/E ratio of 32 — below its three-year average of 37. This suggests that many investors do not yet view the stock as overvalued.
Naturally, Nvidia also led the ITS index family, which – like their U.S. counterparts – ended the day firmly in the green, coming just shy of their all-time highs.
However, the top performers in the ITS World Index (ITSW) and the Islamic ITS Shariah Index (ITSS) were other names. In the ITSW, shares of Israeli firm CyberArk Software Ltd (CYBR) topped the list, gaining 2.56%. In the ITSS, pharmaceutical giant Merck & Co Inc (MRK) took first place, rising by nearly 3% (+2.88%).
Generally, market sentiment has stabilised somewhat. After a brief correction, investors may once again attempt to push the market higher – although a sense of overheating still lingers.
Market outlook for 10 July 2025
After the release of the FOMC minutes, which investors generally interpreted positively, one might have expected Thursday to open on an optimistic note. Yet, there was little sign of cheer in the morning. Once again, the reason lay with President Donald Trump and his unpredictable tariff policy.
Last night, after markets had closed, reports emerged that President Trump plans to impose 50 percent tariffs on all imports from Brazil. These measures, due to take effect from 1 August, are seen as a response to what Trump called the mistreatment of former Brazilian President Jair Bolsonaro – his political ally in the South American country.
The 50 percent levy is the highest among a series of tariff-related announcements issued by Trump this week. These measures were confirmed after his decision to postpone the deadline for implementing so-called “reciprocal” tariffs until 1 August. Initially, the tariffs were meant to take effect yesterday – 9 July.
Analysts believe this move is more political than economic, as Brazil ranks only 15th among U.S. trading partners and is one of the few countries with a net trade deficit in favour of the U.S.
Naturally, the announcement weighed on market sentiment. Futures on the main U.S. indexes traded in the red on Thursday morning. Losses were still modest – just a few tenths of a percent – but the day was only beginning.
The focus of the day will be the release of weekly jobless claims data. Following yesterday’s FOMC minutes, which highlighted the Fed’s growing concern over the labour market, these numbers will be under increased scrutiny. Thankfully, no dramatic changes are expected. If the figures match forecasts, it may help reassure investors and give markets a positive boost.
Another key event is the quarterly earnings release from Delta Air Lines (DAL), one of the largest U.S. carriers. The results, due out before the start of the main session, will unofficially kick off the new corporate earnings season, which formally begins next week.
In addition, another piece of news has been fuelling early morning chatter on the market – and it could also lift investor sentiment. Last night, The Wall Street Journal reported that the Italian confectionery group Ferrero is close to a deal to acquire cereal maker WK Kellogg Co (KLG) for around $3 billion. Given that Kellogg’s current market capitalisation is just $1.5 billion, its shares skyrocketed – gaining nearly 50% by the time markets opened. Kellogg shares are traded on the ITS platform and are available to all Kazakhstani investors.
With these developments in play, the Thursday session is set to open on an uncertain note – but there’s still hope that positive sentiment will prevail. Should that happen, we may well see fresh all-time highs in both the U.S. indexes and the ITS index family.