The US dollar fell 10% in half a year, and investors paid close attention to the progress of trade negotiations.

US stocks rose on Monday (6/30), with the S&P 500 and Nasdaq indices reaching new historical highs. The US dollar fell 10.8% in the first six months of the year, the worst first-half performance since 1973. As Trump's July 9 trade deadline approaches, countries are intensifying negotiations.

2025 First Half Review: S&P 500 Up 5.5%, US Dollar Down 10.8%

In a strong quarter-end performance, Wall Street bulls drove the market to historic highs, with expectations that the US is close to reaching a concrete tariff agreement with its major trading partners.

The S&P 500 rose 4.96% in June, surging 10.57% in the second quarter, marking its best quarterly performance since 2023, and up 5.50% in the first half of the year.

Nevertheless, the long-term structural impact of Trump's tariff agenda on the global economy remains broadly uncertain, with the US dollar falling 10.8% in the first six months of the year, its worst first-half performance since 1973.

7/9 Deadline Approaching, Countries Intensify Negotiations

As the July 9 trade deadline approaches, Trump stated that he does not intend to extend this deadline.

The EU is willing to accept an agreement that includes a 10% general tariff on many EU export products but seeks key exemptions. Trump's chief economic advisor indicated that the White House plans to finalize agreements with partners after the July 4 holiday.

After Canada conceded by canceling the digital services tax on US tech companies, the US will immediately restart trade negotiations with Canada.

Additionally, Trump threatened to impose a new round of tariffs on Japanese exports to the US because Japan refuses to import US rice.

Earnings Season Begins, Will Trade War Affect Corporate Profits

Chris Larkin from Morgan Stanley E*Trade stated that the market has moved past signs of economic slowdown, but uncertain tariff prospects could lead to more significant negative employment surprises, especially during a holiday period with potentially lower trading volumes.

This Friday is the US Independence Day, and the June employment report will be released on Thursday. Economists surveyed by Bloomberg predict that US job additions will slow from 139,000 last month to around 110,000. The unemployment rate is expected to slightly increase to 4.3%.

For the Federal Reserve, which is waiting for further clarity on potential tariff inflation impacts, any significant labor market deterioration could increase pressure for rate cuts.

July will mark the release of second-quarter earnings. Goldman Sachs analyst David Kostin stated that as investors assess the damage from Trump's trade war, corporate profit margins will face a severe test in the upcoming earnings season. They noted that profits will "directly reflect" the negative impact of tariffs, which have increased by about 10 percentage points since the beginning of the year.