Is Trump Pushing the Market Off a Cliff?
- Jul 8, 2025
- 13 min read
Tuesday, 8th of July
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What's Moving The Market
The recent passage of the so-called Big Beautiful Bill by the U.S. Congress has already begun to reshape the economic landscape. While promoted as a bold initiative to stimulate growth and investment, the bill is now drawing criticism for triggering the very concerns many economists had warned about.
Soaring Debt Levels
At the heart of the issue is a significant expansion in federal spending without corresponding increases in revenue. The bill includes major tax cuts alongside new infrastructure and defence expenditures, pushing the U.S. national debt to record highs. Investors are growing increasingly wary of the long-term sustainability of this fiscal path.
The Big Beautiful Bill is projected to add approximately $3.3 trillion to the national debt over the next decade, primarily due to extensive tax cuts and increased spending without corresponding offsets. This legislative move is expected to elevate the debt-to-GDP ratio significantly in the coming years.
A Weaker U.S. Dollar
In the wake of the bill’s passage, the U.S. dollar has weakened noticeably against other major currencies. This reflects investor concerns over America’s fiscal discipline and its rising debt burden. A weaker dollar may benefit exporters in the short term, but it also raises the cost of imports and could fuel inflationary pressures in the months ahead.
The debt surge is already weighing on the US dollar, which dropped 11% in the first half of 2025 — its steepest decline for that period since 1973. In a striking parallel, gold surged 26%, marking its best first-half performance since 1979.
Market Volatility and Policy Uncertainty
The bill’s passage has injected new volatility into financial markets. Bond yields have risen on expectations of increased government borrowing, while equity markets are reassessing valuation levels in light of higher inflation risks and potential delays in Fed rate cuts. Complicating matters further are ongoing trade policy uncertainties, as new tariff threats continue to emerge from Washington.
Shift Toward Defensive Assets
With the macroeconomic picture becoming more uncertain, many investors are rotating into defensive sectors such as consumer staples, healthcare, and utilities. There is also growing interest in inflation hedges like gold and commodities, as well as renewed demand for short-duration bonds.
Wall Street Strategist Expects Setback: S&P 500 Faces Potential Correction of Over 12 Percent
Despite new record highs on Wall Street, Barry Bannister, Chief Equity Strategist at Stifel, is anticipating a noticeable pullback for the US stock market. In a report released Sunday, he forecasts a 12.4 percent decline in the S&P 500 during the second half of 2025, potentially bringing the index down to 5,500 points. Last Thursday—prior to the July 4 holiday—the benchmark index closed at 6,279.35.
“We expect a significant cooling in US core GDP in the second half of 2025—a factor that has historically often coincided with corrections in the S&P 500,” Bannister writes. He anticipates that both consumer spending and business investment will weaken noticeably, pressured by falling real incomes and reduced capital expenditures. Consumer spending, long a key pillar of the US economy, is projected to fall below 1 percent year-over-year growth—with corresponding consequences for the markets.
“The expected correction comes despite the tech sector being significantly more profitable than during the dot-com bubble of the 1990s—the issue is overvaluation,” Bannister adds. In an environment of stagnating economic growth and persistent inflation, the focus is shifting back to the so-called “stagflation trade”—investments that already outperformed during the market correction in the first quarter of 2025.
The strategist’s gloomy outlook comes amid rising trade tensions. The US government has extended the deadline for reaching new trade agreements to August 1, with the original deadline set for July 9. The protectionist policies of the Trump administration are increasingly creating uncertainty—not only regarding supply chains but also monetary policy. Federal Reserve Chair Jerome Powell recently stressed that the Fed would have already begun cutting interest rates were it not for the latest tariff hikes.
“We effectively paused our rate policy once we saw the scale of the tariffs. Virtually all inflation forecasts for the US had to be significantly revised upward as a result,” Powell said at a central bank meeting in Europe. In this market environment, Bannister favours traditional defensive sectors such as consumer staples, utilities, and medical technology.
Last week
Global markets posted mixed results last week, with US indices reaching new highs while many international benchmarks lagged. Meanwhile, Bitcoin edged higher and gold benefited from rising fiscal concerns.
Wall Street extended its rally:
S&P 500 rose ~1.7%, closing at a record high on the back of strong jobs data and optimism over potential tax cuts.
Nasdaq Composite gained ~1.6%, led by ongoing strength in tech and AI-driven names.
Dow Jones Industrial Average climbed ~2.3%, outperforming as investors rotated into financials and industrials.
Global Markets:
DAX (Germany) declined ~1.1% amid growing concerns over eurozone economic weakness.
Nikkei 225 (Japan) surged ~4.1%, hitting record highs, boosted by a weaker yen and strong corporate earnings.
Shanghai Composite (China) slipped ~0.5%, with cautious consumer sentiment weighing on sentiment.
Hang Seng (Hong Kong) dropped ~2.7%, hurt by persistent pressure on tech and property sectors.
Bitcoin & Gold:
Bitcoin (BTC) rose ~1.5%, hovering around USD 107,600 amid moderate risk appetite and on-chain activity from long-dormant wallets.
Gold (Spot) gained ~2.2%, climbing to USD 3,344 as investors hedged against potential US fiscal strain following new tax and spending proposals.
Analysts View: Upgrades and Downgrades
Amazon (AMZN)
Truist analyst Youssef Squali has raised his price target for Amazon from $226 to $250 and maintains a “Buy” rating on the e-commerce giant. Squali expects Amazon to report stronger-than-expected Q2 results, driven by a resilient North American consumer, who so far has been largely unaffected by macroeconomic headwinds and tariffs. He also points to favourable currency effects from a weakening US dollar, as well as slightly higher order frequency and average selling prices, which have contributed to growth. The analyst continues to view Amazon as a long-term winner in e-commerce, advertising, cloud computing, and logistics.
Bank of America analyst Justin Post has reaffirmed his “Buy” rating on Amazon and maintained the price target of $248 ahead of the upcoming Prime Day in July. While competition from other retailers like Walmart, Target, and Best Buy has intensified during the Prime Day period, Post believes the event will remain a positive driver for Amazon’s brand positioning as well as Prime sign-ups and customer retention.
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Apple (AAPL)
Jefferies analyst Edison Lee has upgraded Apple from “Underperform” to “Hold” and raised the price target from $171 to $188. Lee cites a 15% year-over-year increase in iPhone sales in April and May, marking the fastest growth rate since Q3 2021. He also highlights that during China’s June 18 shopping festival, iPhone sales rose 19% year-over-year — a strong signal, in his view, that Apple is determined to defend its market share in China. Chinese consumers, according to Lee, are still willing to buy iPhones at discounted prices, and he believes 40 million units is likely the minimum Apple aims to maintain in China. Given the recent trends, Lee sees upside surprise potential for Apple’s results in the just-ended quarter. However, he also warns that stronger-than-expected June-quarter performance could dampen September-quarter momentum.
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Crocs (CROX)
Goldman Sachs analyst Brooke Roach has initiated coverage of Crocs with a “Sell” rating and a price target of $88. While strong execution could help sustain the momentum of sportswear and footwear brands that have gained significant market share in recent years, Roach believes that rising competition and shifting consumer preferences point to a “muted near-term environment” for the industry overall. Goldman Sachs remains “constructive” on Crocs’ differentiated marketing and innovation capabilities, but sees risk in the normalization of demand for its classic clog, which could weaken domestic growth and limit the pace of international expansion.
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Deckers (Deck)
Goldman Sachs analyst Brooke Roach has initiated coverage of Deckers Outdoor with a “Sell” rating and a price target of $90. While she acknowledges Deckers' portfolio of strong brands, Roach sees a less attractive risk/reward profile in the near term compared to other companies in the apparel and accessories sector. This is due to intensifying competition, especially in the running segment, and emerging signs of brand momentum normalisation. According to the analyst, strong execution could help sustain the momentum of sportswear and footwear brands that have gained significant market share in recent years. However, she believes that increasing competition and shifting consumer preferences will likely create a more muted short-term environment for the industry as a whole.
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Autodesk (ADSK)
DA Davidson analyst William Jellison has upgraded Autodesk from “Neutral” to “Buy” and raised the price target from $305 to $375. He now believes Autodesk is “on track to deliver a top-10 performance,” citing a combination of proven success in growth areas such as Autodesk Construction Cloud (ACC) and Fusion, along with organisational changes that support stronger execution.
While Jellison expects the transition in the company’s transaction model to create some margin volatility, he believes Autodesk has room for efficiency gains that could drive substantial earnings growth.
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Carvana (CVNA)
Jeff Lick, analyst at Stephens, has raised his price target for Carvana from $300 to $375 and maintains an “Overweight” rating on the stock. He believes Carvana sold more units in Q2 than Wall Street had projected. The company is now expected to report unit growth of up to +45%, compared to a previous estimate of +35% and a consensus forecast of around +38%.
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Crowdstrike (CRWD)
Analysts at Piper Sandler have downgraded CrowdStrike from “Overweight” to “Neutral” but maintained their price target of $505. They note that the stock is approaching its price target and see no near-term scenario that would meaningfully raise estimates. While Piper Sandler remains positive on CrowdStrike's long-term prospects, they advise investors not to buy the stock at this time, as upside potential may be limited in the short to medium term. The analysts also highlight that the stock has surged 60% over the past three months, which has contributed to their more cautious stance.
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Meta (META)
Needham analyst Laura Martin has upgraded Meta Platforms from “Underperform” to “Hold,” without assigning a price target. Recent data collection has led Martin to raise her estimates for the Facebook parent company, but she remains on the sidelines with a “Hold” rating. She believes Meta’s broad strategic expansion “wastes capital and adds risk”, placing structural downward pressure on margins and free cash flow. Martin also notes that around 90% of the 50 analysts covering the stock believe Meta is overvalued, despite ongoing regulatory risks facing the company.
Bank of America analyst Justin Post maintains a “Buy” rating on Meta Platforms. The analyst is optimistic following reports that the Facebook parent company has launched a new “Superintelligence Labs” unit. According to a leaked internal memo, Meta’s AI efforts are now being consolidated under this new group, which will be led by Alexandr Wang, former CEO of ScaleAI.
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Netflix (NFLX)
Canaccord analyst Maria Ripps has raised her price target for Netflix from $1,380 to $1,525 and maintains a “Buy” rating. Ripps notes that while most of the subscription-based platforms she tracks trade at high valuations, these are justified by strong fundamentals. She highlights that Netflix continues to maintain a strong leadership position, pricing power, and progress in developing its advertising technology capabilities.
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NVIDIA (NVDA)
Citigroup analyst Atif Malik has raised his price target for NVIDIA from $180 to $190 and maintains a “Buy” rating on the stock. The price target increase is based on the expansion of the total addressable AI market. Malik now estimates that the AI data center market will reach $563 billion by 2028, which is 13% higher than his previous forecast of $500 billion. According to the analyst, this upward revision is partly due to stronger-than-expected demand for government-related AI applications.
Bank of America analyst Vivek Arya has reiterated a “Buy” rating on NVIDIA and confirmed the price target of $180. Arya views the graphics processor specialist as a key player in the race for autonomous driving, calling NVIDIA “a pioneer in accelerated computing poised to benefit from the rollout of autonomous vehicles.” As the automotive industry shifts toward electrification and automation, the analyst believes that the growing demand for in-vehicle computing power and AI training models represents an expanding opportunity for NVIDIA.
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Oracle (ORCL)
BMO Capital analyst Keith Bachman has raised his price target for Oracle from $235 to $245 and reaffirmed his “Outperform” rating. Given the impact of ongoing investment needs on Oracle’s free cash flow, along with its continued commitments to dividends and likely share buybacks, Bachman believes Oracle may need to raise new capital during fiscal year 2025/26 and/or 2026/27. Nonetheless, he remains positive on Oracle’s ability to accelerate growth, including both software revenue growth and operating income expansion.
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Robinhood (HOOD)
Deutsche Bank analyst Brian Bedell has raised his price target for Robinhood from $85 to $96 and reaffirmed a “Buy” rating. The upgrade follows Robinhood’s recent crypto event in France, where Chairman and CEO Vlad Tenev, along with the management team — including Senior VP and GM of Crypto Johann Kerbrat — unveiled a new suite of products that Bedell describes as a major step forward for crypto trading and crypto-related services at Robinhood.
KeyBanc analyst Alex Markgraff has also raised his price target for Robinhood from $60 to $110 and maintains an “Overweight” rating. According to Markgraff, the event showcased expanded product breadth and depth, most notably the launch of tokenized U.S. equities for Robinhood users in the EU and broader crypto trading coverage, both in terms of geographic reach and product offering. These announcements, in his view, demonstrate not only strong innovation but also a meaningful expansion of Robinhood’s addressable market.
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Roblox (RBLX)
BTIG analyst Clark Lampen has raised his price target for Roblox from $73 to $124 and maintains a “Buy” rating on the online gaming specialist. The analyst points to the positive short- and medium-term impact of the game Grow a Garden and notes that estimates for 2025 and 2026 have been revised upward. The reasons include potentially faster bookings growth, driven by increased investment in the platform, as well as growing monetisation opportunities.
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Roku (ROKU)
Bank of America analyst Brent Navon has raised his price target for Roku from $100 to $110 and maintains a “Buy” rating on the stock. According to Navon, macroeconomic uncertainty has started to ease in recent months. While industry-wide advertising trends were impacted in early April, sentiment improved over the remainder of the quarter. The analyst believes that Roku’s outlook for the full fiscal year could still improve, driven by stabilising conditions and recovering ad demand.
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Spotify (SPOT)
Canaccord analyst Maria Ripps has raised her price target for Spotify from $775 to $850 and maintains a “Buy” rating. Spotify is credited with a strong leadership position, pricing power, and developing advertising technology capabilities. However, Ripps notes that the company is currently facing significant short-term headwinds from currency effects, as the US dollar continues to weaken.
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Teladoc (TDOC)
Bank of America analyst Allen Lutz has raised his price target for Teladoc from $7 to $8.75 and maintains a “Neutral” rating on the stock. According to Lutz, Teladoc’s recent acquisitions of Catapult and Uplift present opportunities to increase revenue per member, but it will take both time and effective execution to improve the company’s overall revenue growth outlook. The analyst remains cautious about the full-year forecast and momentum heading into 2026, but views the recent acquisitions as potential growth catalysts.
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Tesla (TSLA)
William Blair analyst Jed Dorsheimer has downgraded Tesla from “Outperform” to “Market Perform,” without assigning a price target. While the elimination of the $7,500 EV tax credit under the Big Beautiful Bill was anticipated, Dorsheimer notes that the repeal of corporate fuel economy penalty fees requires a reassessment of expectations. He believes that the combined headwinds from the loss of tax credits and the risk to Tesla’s more than $2 billion in regulatory credit income may be too much for investors to overlook. Dorsheimer expects the reduction in tax-related income to deliver a “direct hit to profitability,” which will likely require a broader revision of valuation models.
Mark Delaney, analyst at Goldman Sachs, has raised his price target for Tesla from $285 to $315 while maintaining a “Neutral” rating on the electric vehicle maker. The adjustment comes after Tesla reported preliminary Q2 deliveries of 384,000 vehicles, representing a 14% increase compared to the previous quarter and a 13% decline year-over-year. Although the figure came in below the Visible Alpha consensus of around 394,000 and lower than the Q1 results’ consensus, Delaney notes it was still “significantly better” than Goldman’s own forecast of 365,000 and above broader investor expectations.
J.P. Morgan analyst Ryan Brinkman has reiterated an “Underweight” rating on Tesla and maintained the price target of $115. The focus is on the upcoming Q2 delivery figures, which Brinkman expects will fall short of consensus estimates, as the weaker delivery trend from Q1 appears to have continued into the second quarter. This, in his view, suggests that the multi-year “expectations reset” may not yet be over. J.P. Morgan is forecasting 360,000 vehicle deliveries, compared to 444,000 units in the same quarter last year.
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Uber (UBER)
Ken Gawrelski, analyst at Wells Fargo, has raised his price target for Uber from $100 to $120 and maintains an “Overweight” rating on the stock. He expects positive consensus revisions, particularly related to foreign exchange impacts, supported by strong booking growth. According to Gawrelski, a clear outlook on margin reinvestment would provide greater transparency. He also sees the ability to maintain high-teens currency-neutral growth in mobility bookings during the second half of the year as crucial for Uber’s share performance.
What's Coming Up This Week
What to Watch This Week
Markets now turn their attention to upcoming US inflation data and earnings season, which could set the tone for the remainder of July.
The central banks of Australia, New Zealand, and South Korea are set to announce their interest rate decisions, and on Wednesday evening, the Fed Minutes will reveal the details of the most recent Federal Reserve meeting.
On the corporate side, Thursday will bring attention to the latest earnings reports from Conagra Brands, Delta Air Lines, and Levi Strauss.
In addition, Amazon’s Prime Day will run from July 8 to 11.
Tuesday, 8 July
Interest rate decision – Reserve Bank of Australia (RBA) → Investors are watching for any shift in tone amid sticky inflation
Interest rate decision – Bank of Korea → A potential hold is expected, but commentary on growth will be key
Wednesday, 9 July
Fed Minutes release (from June FOMC meeting) → Key insight into the Fed’s rate cut timing and inflation concerns
New Zealand central bank decision (RBNZ) → Watch for changes in guidance as inflation pressures ease
Market theme: Midweek positioning ahead of earnings and CPI
Thursday, 10 July
Delta Air Lines – Consumer travel demand and margin outlook
Conagra Brands – Cost pressures and demand in packaged foods
Levi Strauss – Apparel demand trends, inventory commentary
US CPI preview sentiment begins building
Friday, 11 July
Positioning ahead of next week’s US CPI (due 16 July) → Markets may react pre-emptively based on inflation expectations
Final day of Amazon Prime Day (in some markets) → Ongoing consumer and sales data implications
Disclaimer: This content is for informational and educational purposes only and does not constitute financial advice. It does not consider your personal objectives, financial situation, or needs. You should consider whether the information is appropriate for your circumstances and seek professional advice before making any investment decisions. Investing in stocks carries inherent risks, and the application of any strategy may not eliminate the risk of loss. Market conditions, volatility, and unforeseen events can impact outcomes, and past performance is not indicative of future results.
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