Stock Market Bounces Back: SPY and QQQ Recover from Losses Amid Trump's Tariff Plans and Fed Chair Rumors

The S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) reversed an afternoon drop to finish Wednesday's trading session in positive territory. June's Producer Price Index (PPI) was flat month-over-month, below the consensus estimate, and the odds of a 25-bps rate cut at the September Federal Open Market Committee meeting are now at 56.2%. President Trump denied reports that he would fire Fed Chair Jerome Powell, but is preparing to send tariff letters to over 150 countries. The S&P 500 closed higher by 0.32% while the Nasdaq 100 gained 0.10%.

The S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) reversed afternoon declines to close in positive territory on Wednesday, July 2, 2025. The market's performance was influenced by several economic indicators and geopolitical developments.

The S&P 500, which tracks the performance of the Standard & Poor's 500 Index, ended the day higher by 0.32%, while the Nasdaq 100, represented by the Invesco QQQ Trust Series 1 ETF (QQQ), gained 0.10%. The afternoon reversal came despite initial drops, suggesting investor sentiment remained cautious but hopeful [1].

June's Producer Price Index (PPI) was flat month-over-month, falling short of the consensus estimate. This relatively stable reading may have contributed to the market's positive close, as it indicates a lack of significant inflationary pressures [2].

The odds of a 25-bps rate cut at the September Federal Open Market Committee meeting are now at 56.2%. President Trump denied reports of his intention to fire Fed Chair Jerome Powell, but is preparing to send tariff letters to over 150 countries. These actions highlight the ongoing tension between the White House and the Federal Reserve regarding monetary policy [3].

The Invesco QQQ Trust Series 1 ETF (QQQ), which tracks the Nasdaq-100, provides investors with direct exposure to major technology and growth companies. The ETF's current market capitalization stands at approximately $217.91 billion, with a trading volume of 14.12 million shares on the NASDAQ exchange [4].

The recent recovery of the Nasdaq-100, which entered a new bull market after a significant downturn, suggests potential for future growth. The index has rebounded from a significant downturn attributed to geopolitical tensions and tariffs, reaching a new record high [5].

Investors are closely watching the Federal Reserve's decision on rate cuts. While there is pressure for the Fed to cut rates, the central bank is in "wait-and-see" mode due to the uncertainty surrounding tariffs and their impact on inflation. The Fed's cautious approach is likely to continue until more clarity on the economic outlook is achieved [6].

The market's performance on Wednesday reflects a mix of positive and cautious sentiments. The S&P 500 and Nasdaq 100 ETFs' rebound underscores investors' confidence in the underlying fundamentals of these indices, despite ongoing geopolitical uncertainties.

References:
[1] https://finance.yahoo.com/quote/VOO/performance/
[2] https://seekingalpha.com/news/4467971-yieldmax-nasdaq-100-0dte-covered-call-strategy-etf-declares-0_1906-dividend
[3] https://www.newsweek.com/what-know-federal-reserve-rate-cuts-2097726
[4] https://site.financialmodelingprep.com/market-news/invesco-qqq-trust-series-1-etf-purchase-nasdaq-100-recovery
[5] https://finance.yahoo.com/quote/VOO/performance/