Markets Kick Off Q3 with Mixed Signals: Trump's Budget Bill and Tariffs Loom Large

Hold onto your hats, folks! The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite kicked off July 1 with a rollercoaster start to the third quarter of 2025. The markets are jittery as they eye President Donald Trump's blockbuster budget bill and a ticking clock on looming tariffs.

The Dow Jones was up 75 points, trying to keep the party going, while the S&P 500 and Nasdaq Composite dipped -0.2% and -0.3%, hinting at a possible pullback. This choppy trading follows a wild ride in Q2 2025, where stocks bounced back from a brutal April dip to finish the quarter strong and in the green.

Just the day before, all three major indices were partying, with the S&P 500 hitting record highs above 6,204. Remember Trump's "Liberation Day" tariffs? They caused a bloodbath across the market, dragging the index into the red by early April. But hey, the market showed some serious grit, even with the Middle East tensions, and ended Q2 on a high note.

The blue-chip Dow also closed the second quarter with a bang, up over 270 points on Monday, marking a 5% gain for the period. Meanwhile, Nasdaq clawed its way back, finishing Q2 a whopping 18% higher.

Q3 Starts Slow

While investors are still feeling pretty good, Wall Street's Q3 kickoff is off to a sluggish start, with trade talks casting a shadow.

All eyes are on Trump's mega budget bill, which just got a vote in the Senate overnight. And let's not forget the fresh beef between the prez and Tesla and SpaceX boss Elon Musk. This drama's got markets on edge, with Tesla's stock price taking a hit on Tuesday. Trump even threw shade at DOGE, hinting they might need to look at the subsidies given to Musk's companies.

Over in crypto land, Bitcoin (BTC) is losing steam, dipping below $107k. The folks at Bitfinex are calling it, saying BTC might be stuck in a trading range. Q3 has never been a big hit for the bulls, historically speaking.

Tariffs and Jerome Powell's Speech

Forget the Middle East drama for a sec—the Israel-Iran beef is cooling off. Now, it's all about what could bring the market down.

Trump's tariff deadline on July 9 is front and center, with whispers that the White House is aiming for some "narrowed" deals before the "reciprocal" tariffs kick in.

And hold up, Federal Reserve chair Jerome Powell's got a speech coming up on Tuesday. Trump's been pushing hard for interest rate cuts, but the Fed's not showing their cards yet. Investors are betting on a cut in the coming months, and they'll be all over this week's economic data, including the June jobs report.