Stocks Survive Latest Trump Trade Blow. Markets Might Not Be as Lucky Next Time and 5 Other Things to Know Today.

Stocks felt a sudden chill after President Donald Trump launched the latest assault in his trade war. The question for investors is whether the market will now shake it off or catch a cold.

The White House sent letters to more than a dozen countries on Monday, threatening tariff rates of between 25% and 40%. The optimistic take is that stocks’ reaction was relatively small compared with the first announcement of across-the-board tariffs in early April. Back then the major indexes fell about 5% the day after, whereas yesterday the drop was less than 1%.

There are a few possible explanations. It could be expectations that more deals will be reached ahead of the new Aug. 1 deadline, or that Trump might eventually back down. Some may be thinking that the effect of tariffs won’t be too bad because they haven’t had a big impact so far.

But there’s also a case that investors have become too complacent. It’s true that tariffs have yet to stunt economic growth, spark a burst in inflation, or decimate company earnings. But the real test is yet to come.

Investors know that, one way or another, tariffs will reduce corporate profits. They just don’t know yet whether the damage will be large or small. Second-quarter earnings season, which begins in earnest next week, may reveal what executives are now expecting.

So far, it seems companies are taking tariffs on the chin. Maybe they were able to stockpile imports before the levies to save on costs, but the fact that consumer-price inflation hasn’t taken off suggests they’re eating most of the higher costs—rather than passing them on to consumers. Amazon’s Prime Day this week shows the retailer is eager to keep prices low. Trump famously told Walmart not to raise prices. Maybe Amazon got the same message.

But this golden period of low tariffs and low prices isn’t sustainable. Either companies pass on more of the costs, or they lose profit—which eventually leads to job losses. Both scenarios dent demand. Over the long run, the strength of that blow will decide whether the tariff sniffles leave stocks bedridden.

—Brian Swint

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U.S. Imports Have Already Sharply Shifted Away From China

As President Donald Trump officially postponed the date when his so-called reciprocal tariffs kick in to Aug. 1, and issued letters to about a dozen countries unilaterally setting tariff rates on their products of between 25% and 40%, the data reveal a dramatic shift in tech device imports away from China.

• China accounted for 8% of U.S. smartphone imports in May, according to new Census Bureau data, down from 67% in May 2024. As recently as February, a majority of U.S. smartphone imports came from China. U.S. importers currently pay a 20% tax on smartphones, PCs, and parts from China.
• For now, those levies are zero from the rest of the world, giving companies a strong incentive to move their exports to the U.S. away from China. The Trump administration is adding new tariffs back on various countries, though exemptions for certain tech products remain in place.
• For now, the shift away from China has benefited India, where Apple has spent years building up iPhone assembly, and Vietnam where Samsung has done the same. India was the top smartphone exporter to the U.S. in May, with Vietnam a close second.
• American businesses positioned ahead of tariffs in the first quarter, with smartphone imports up 72% from a year earlier. But a “pull-forward” of demand means that smartphone shipments to the U.S. subsequently declined 29% in May. Smartphone shipments to the U.S. from China fell $2.6 billion in May.

What’s Next: The Trump administration has warned of additional sector-specific tariffs later this year. Tech supply chains haven’t seen much movement in servers and related parts. Taiwan and Mexico remained the leading exporters of those products to the U.S. in May.

— Adam Levine

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Extended Amazon Prime Day Could Boost Summer Spending

Amazon has stretched its annual Prime Day sale over four days this year, setting up an intense battle with fellow retailers that is expected to generate the sales equivalent of two Black Fridays, according to Adobe analytics. Prime Day starts today and runs through Friday in 20 countries.

• It could generate more than $21 billion in gross merchandise value, 60% higher than last year, estimated BofA Securities analyst Justin Post. It could deliver record-breaking sales, reinforce Amazon’s competitive advantage, and boost retail and advertising revenue, wrote Tigress Financial Intelligence chief market strategist Ivan Feinseth.
• Rivals including Walmart, Target, Best Buy, REI, Kohl’s, and Dollar General have accelerated their own summer promotions, trying to siphon off Amazon’s sales. Target’s Circle Week runs through Saturday; Walmart’s deals continue through Sunday.
• From July 8 to 11, U.S. retailers are expected to drive a record $23.8 billion in online spending, up 28.4% from 2024, Adobe analytics estimates. Adobe expects discounts of 10% to 24%, especially on apparel, appliances, mattresses, TVs, computers, and toys.
• Prime Day doesn’t just drive sales, it spurred millions of customers to sign up for Prime memberships in the three weeks before the 2024 event. Amazon CEO Andy Jassy told CNBC last week that he expects shoppers will welcome the longer event, especially amid worries about trade and prices.

What’s Next: The competing sales coincide with the start of back-to-school shopping season. Consumers also could be enticed to make some higher-ticket purchases that they had postponed because of tariff-related anxieties.

— Sabrina Escobar and Janet H. Cho

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MicroStrategy Pauses Bitcoin Buying, as Chairman Says ‘Hold On’

MicroStrategy didn’t buy any Bitcoin between June 30 and July 6, its first dry spell in buying the cryptocurrency since early April. Co-founder and Chairman Michael Saylor explains that sometimes it’s important to HODL, or hold on for dear life. The last time this happened, the White House unleashed broad tariffs.

• The company, which recently rebranded itself to Strategy, currently has 597,325 tokens purchased for roughly $70,982 each, or around $42.4 billion in total. It didn’t buy any Bitcoin during the March 31 to April 6 period, either.
• MicroStrategy said that for its second quarter ended in June, it recorded an unrealized gain on digital assets of $14.05 billion. As a result, it incurred an associated deferred tax expense of $4.04 billion.
• Monday’s disclosure coincided with an announcement that Strategy had entered into an agreement to issue and sell shares of its STRD preferred stock for up to $4.2 billion. Proceeds will be used for “general corporate purposes,” including future Bitcoin acquisitions.
• The price of Bitcoin, the world’s largest token by total market value, has declined from record highs of nearly $112,000 in May. Bitcoin’s price had dropped below $108,180 as of Monday afternoon, according to CoinDesk, following a downturn in the broader market.

What’s Next: Bitcoin’s price has been rising this year in part because of tariff uncertainty, as investors shift money from stocks into other assets. More institutional investors are piling into crypto exchange-traded funds. Another factor is the shifting market expectation about the Federal Reserve cutting interest rates.

— Mackenzie Tatananni, George Glover, and Janet H. Cho

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BlackRock Makes a Bet on Commercial Real Estate

BlackRock’s deal to buy a small, St. Louis, Mo.-based private-equity real estate firm represents its latest bid to build out its private markets presence and further its long-term goals to double both its own market value and operating income by 2030.

• The world’s largest asset manager said Monday it is acquiring ElmTree Funds, a firm that manages $7.3 billion of assets, for an undisclosed sum. It’s BlackRock’s fourth private-assets acquisition since early 2024 and underlines the firm’s broader strategy in the space.
• ElmTree focuses on commercial, industrial real estate investments in segments known as net-lease—arrangements where tenants pay their landlord’s operating expenses on top of rent—and built-to-suit, which refers to building a property tailored to a specific tenant’s needs.
• BlackRock’s executives last month outlined a 2030 plan targeting $400 billion of private markets fund-raising as well as revenue contributions of at least 30% from its technology and private markets businesses. That figure was 15% last year.
• ElmTree is the newest piece of the puzzle. New York-based BlackRock acquired Global Infrastructure Partners, private-credit manager HPS, and private-markets data provider Preqin over the past year and a half.

What’s Next: On its website, ElmTree touts its focus on assets leased on a long-term basis, which it defines as at least a decade, for tenants with credit ratings between AAA and BBB-. Its deals are between $20 million and about $150 million. The deal is expected to close this quarter.

— Rebecca Ungarino

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Musk’s Wealth Plummets as Rift With President Dents Tesla

Elon Musk is still the wealthiest person in the world, but his net worth took a big hit on Monday. Tesla stock tanked after the electric vehicle maker’s CEO dashed shareholders’ hopes that he would stay out of politics, following last month’s messy split with President Donald Trump.

• Tesla shares tumbled 6.8% to $293.94 on Monday as investors fretted about Musk’s plan to form the “America Party,” which he has said would be focused on cutting the deficit.
• Also helping push shares lower was a downgrade from William Blair analyst Jed Dorsheimer, who cut his rating to Hold from Buy. Trump’s signature spending bill removes purchase tax credits for EVs. That might be “too much for investors to bear,” Dorsheimer wrote.
• Musk’s net worth dropped by $15.3 billion to $346 billion on Monday due to the selloff in Tesla stock, according to the Bloomberg Billionaires Index. His wealth has now dropped $87 billion since the start of the year.
• Despite that, Musk still tops the global rich list. He’s worth about $93 billion more than Meta Platforms CEO Mark Zuckerberg, according to Bloomberg, although Zuckerberg’s own net worth has climbed $46 billion this year after a surge in Meta’s share price.

What’s Next: Even tech bulls don’t see the America Party doing any good for the EV giant’s shares. “There is [a] broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track,” wrote Wedbush Securities analyst Dan Ives, who rates the stock at Buy with a $500 price target, in a research note.

— Abby Schultz, Al Root, and George Glover

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