Dimon Calls Out Market’s Tariff Complacency. Why Nvidia, Bitcoin Point to a FOMO Trade and 5 Other Things to Know Today.

(AFP via Getty Images)

Markets are complacent about tariffs, JPMorgan Chase CEO Jamie Dimon said Thursday. As stocks raced to record highs in a week when it became clear U.S. taxes on imports are going to hit the highest levels in decades, it’s easy to see what he’s getting at.

But first, a quick caveat. For all Dimon’s success running the biggest U.S. bank since 2006, his predictions have sometimes been wide of the mark. He said the economy would crash when the Fed started raising interest rates in 2022 and he’s been warning about the imminent demise of Bitcoin for years.

Still—two of the three major stock indexes climbed to new highs yesterday. Bitcoin jumped above $118,000 for the first time, and chip maker Nvidia closed above $4 trillion on artificial intelligence optimism. At the same time, though, tariffs may already be undercutting corporate profits. Conagra, the maker of Slim Jim beef jerky, said yesterday that aluminum and steel tariffs mean costs are rising even as sales stay flat.

Earnings growth rates for S&P 500 companies are expected to be the lowest since 2023 in the latest quarter, according to analysis by FactSet. Given the minimal impact from tariffs on inflation, it looks like companies may be eating the bulk of the higher costs so far.

So why are investors still buying? Maybe they don’t think Trump will follow through on tariffs—though that seems unlikely, especially when you consider how sharply copper prices responded to the latest taxes. Maybe the market doesn’t think levies will hurt that badly, but that’s not what companies are saying.

The biggest trade right now could be FOMO—the Fear Of Missing Out. That makes sense, since stocks have bounced back from a lot of turmoil this year. If that is the main reason stocks are still rising, it doesn’t necessarily mean it’s time to sell. But Dimon shouldn’t be the only one with nagging doubts.

— Brian Swint

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Trump Allies Attack Fed’s Powell Over HQ Renovation

The administration is stepping up its pressure campaign on Federal Reserve Chair Jerome Powell, who it claims has “grossly” mismanaged the central bank as evidenced by an over-budget renovation of its Washington, D.C., headquarters. That assertion was made in a letter from Russell Vought, a key aide to President Donald Trump.

• Vought, the director of the Office of Management and Budget, said the renovation was $700 million over budget and raised questions about Powell’s recent testimony to Congress about it. Vought asked Powell to stop the project and explain if he got permission to make changes to the plans.
• The letter comes amid Trump’s ongoing public criticism of Powell, who he says has been too slow to lower interest rates despite mild inflation numbers. Fed Gov. Christopher Waller, a possible successor to Powell when his term ends next May, said Thursday a rate cut should be considered at the Fed’s July meeting.
• The Fed’s funding doesn’t rely on Congress but instead its holding of government bonds and other assets. Most of its profit gets sent to the Treasury. This setup allows it to operate independently and decide what to spend on its own facilities. That independence is now being challenged by Trump.
• Vought’s argument is less about the money itself and more about whether the Fed followed the rules. If Powell’s team made major design changes without alerting the National Capital Planning Commission, it may have sidestepped a key part of the approval process.

What’s Next: Powell told lawmakers that some of the more expensive design elements, including rooftop gardens, marble finishes, and executive dining rooms, were no longer in the plan. Georgia State professor Todd Phillips said the legal bar for Trump to fire Powell is high, but the attacks may be meant to test the waters.

— Megan Leonhardt, Nicole Goodkind, and Liz Moyer

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Pentagon Makes Sizeable Bet on Rare Earths in MP Materials

The Defense Department is taking a substantial stake in MP Materials, the West’s largest rare earth materials mining company, to hasten the building of the domestic rare earth magnet supply chain and cut the U.S.’ dependency on China. MP Materials’ stock soared 51% on the news.

• In the public-private investment, the Pentagon will take an initial $400 million equity stake with a commitment for up to $350 million more and a $150 million loan. Las Vegas-based MP Materials will build a second domestic magnet factory to boost production and expand its existing facility in Mountain Pass, Calif.
• Rare earth magnets are one of the most strategically important components in advanced technology systems, from F-35 fighter jets and navigation equipment to automobiles. Yet the U.S. “relies almost entirely on foreign sources,” the company said.
• China, the global leader in mining and processing rare earths, threatened to limit exports after President Donald Trump’s tariffs in April. In 2024, China mined about 270,000 metric tons of the world’s 390,000 metric tons of rare-earth oxides. It controls about 85% of global refining capacity.
• China has pledged to approve exports more quickly but still dominates global supplies. The Defense Department’s deal includes a floor price for neodymium and praseodymium oxide of $110 a kilogram. With the deal, the U.S. government is MP Materials’ largest shareholder, with 15%.

What’s Next: MP Materials later this year expects to begin commercial production of magnets for General Motors, its anchor customer. Its factory to make rare-earth magnets will come online in 2028 and eventually help the company produce 10,000 metric tons of magnets.

—Nate Wolf, Al Root, and Janet H. Cho

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Bitcoin Surges Above $118,000 to Record High

Bitcoin surged above $118,000 early Friday, setting a record high for the world’s largest cryptocurrency. It’s been a stellar week for cryptos, which have moved in tandem with tech stocks to post strong gains.

• The token rose as high as $118,754 early Friday, according to data from CoinDesk, before giving up some of its gains.
• Bets on a September Federal Reserve interest-rate cut, inflows into spot crypto exchange-traded funds, and regulatory tailwinds have all helped spur this week’s surge, powering Bitcoin to its first all-time highs since May. Lawmakers are set to review several key digital-asset proposals next week, which has made investors even more excited.
• Bitcoin surged amid a broader market rally, with Nvidia topping a $4 trillion valuation and other tech names surging as investors shrugged off worries about U.S. tariffs. Cryptos tend to move in tandem with riskier growth stocks.
• Other tokens have been booming, too. Ethereum and XRP, two other large-cap digital assets, have both racked up double-digit gains this week, according to data from the crypto exchange Kraken.

What’s Next: It’s only a matter of time before Bitcoin hits another milestone, Pepperstone strategist Dilin Wu said Friday in a research note. “If legislative momentum remains strong, ETF inflows persist, and the Fed signals dovish intent, Bitcoin retesting the $120,000 mark before August would not be far-fetched,” Wu wrote.

— George Glover

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Amazon’s Rival to Elon Musk’s SpaceX Is Deploying Satellites

Project Kuiper, Amazon.com’s space-based Wi-Fi service that aims to have more than 3,000 satellites offering data services to Amazon Web Services clients and others by the end of the decade, started deploying satellites in the second quarter. Services could start later this year.

• “Project Kuiper is taking off,” BofA Securities analyst Justin Post wrote. Despite Amazon’s cost-focused agenda, the project is a top management-growth initiative. Post estimates Kuiper could cost $23 billion over time, including about $15 billion for its launch.
• The payoff is a communications business with $7.2 billion in annual revenue by 2032. That’s based on roughly seven million subscribers paying $80 a month for internet service, Post projects. Elon Musk’s SpaceX has launched more than 9,000 satellites, and Starlink has six million subscribers.
• Musk’s SpaceX dominates launch services by pioneering reusable rockets, something Amazon founder and Executive Chair Jeff Bezos’ Blue Origin is working on, too. But Blue Origin’s New Glenn rocket has only reached orbit in a test flight once. Amazon pays commercial prices for launch services.
• A $100 million satellite called MethaneSat backed by the Bezos Earth Fund was lost in space after losing power. The satellite was tracking global methane emissions, a contributor to climate change. The Environmental Defense Fund says the equipment is likely not recoverable.

What’s Next: Amazon has the capital to take a share of SpaceX’s space-based communications service, but it won’t be easy. The privately held SpaceX was recently valued at $400 billion. BofA’s Post sees peak spending for Amazon’s Kuiper project of about $1.1 billion in the fourth quarter of 2025.

— Al Root and Janet H. Cho

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Venture Capital Bet Big on Gambling, and Now Gambling Treatment

Venture capitalists have developed a new pair trade: mobile sports and gambling sites on the one side and gambling addiction treatment start-ups on the other. Barron’s has identified six VC firms that have simultaneously invested in gambling and gambling treatment, seeing the markets growing in lockstep.

• In 2017, New Hampshire-based Alumni Ventures participated in an early round that raised $2 million for Sleeper, a fantasy sports and betting app. Sleeper’s valuation reached $400 million four years later. Last August, Alumni invested $1.5 million in Kindbridge Behavioral Health, specialists in gambling addiction.
• Bettor Capital, a VC firm devoted entirely to gambling, invested in Kindbridge in March. And General Catalyst, which participated in Sleeper’s Series A, B, and C funding rounds, more recently invested in a seed round for Birches Health, another gambling treatment firm.
• General Catalyst’s Reva Nohria told Barron’s that as accessibility for gambling expands “we expect demand for treatment to rise in parallel.” Half of American men under 50 have a digital sportsbook account, Siena College found. About 8.9% of adult sports betters could have a gambling disorder, The Lancet, says.
• U.S. venture capitalists have invested $2 billion for gambling businesses since 2018, when the Supreme Court opened the door to nationwide sports betting. Treating problem gambling is still in its early stages. But both are increasingly smartphone-driven and app-based.

What’s Next: Venture capital ethicist Tracy Barba says the paired investments are a conflict of interest but problem gambling advocates say the help is welcomed. Keith Whyte, former executive director of the National Council on Problem Gambling, said “there’s an opportunity to do well by doing good.” For more read here.

— Nick Devor

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Do you remember this week’s news? Take our quiz below to test your knowledge. Tell us how you did in an email to thebarronsdaily@barrons.com.

1. There’s evidence that imports from China are down since President Donald Trump opened his trade war. China accounted for how much of U.S. smartphone imports in May, according to new Census Bureau data, down from 67% in May 2024.

a. 6%
b. 26%
c. 46%
d. 56%

2. Amazon extended its annual Prime Day sale for members to four days this week, and other retailers followed with their own sales. From July 8 to 11, U.S. retailers are expected to drive record online spending of how much, according to Adobe?

a. $13.8 billion
b. $23.8 billion
c. $33.8 billion
d. None of the above

3. Elon Musk’s political activities have weighed on Tesla stock this year. How much has his wealth dropped since the start of the year, according to the Bloomberg Billionaires Index?

a. $49 billion
b. $59 billion
c. $69 billion
d. $79 billion

4. President Donald Trump began sending letters to various countries announcing tariff rates on their products imported here, and he also set a tariff of how much on imported copper?

a. 50%
b. 40%
c. 25%
d. None of the above

5. Comcast’s Universal Pictures scored the top slot at the holiday box office with Jurassic World Rebirth, the latest in the dinosaur action adventure franchise. Since 1993 how much has the series brought in at the box office?

a. $3.3 billion
b. $4.3 billion
c. $5.3 billion
d. $6.3 billion

Answers: 1(a ); 2(b ); 3(c ); 4(a ); 5(d )

— Barron’s staff

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Callum Keown