The Rundown - U.S. Strikes Trade Deal with Vietnam, iPhone Returns to Growth in China

Episode Date: July 3, 2025

Stock market update for July 3, 2025.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Thursday, July 3rd. In today's episode, we'll recap the U.S.'s trade deal with Vietnam and why it means that tariffs are here to stay. We'll also dive into the latest jobs report and tell you what it means for interest rates. Then stick around to the end of the show to find out how many Americans own stocks and why that number might go up soon.

We got a great show for you today. Let's go. Markets were back to all-time highs on Wednesday, with the S&P 500 jumping 0.5% and the NASDAG jumping nearly 1%. Now, the big news yesterday was a new trade deal. President Trump announced a deal with Vietnam that imposes a 20% tariff on imports from Vietnam,

and there's also going to be a 40% tariff on goods that are trans-shipped through Vietnam. So what that means is, any products that were originally made from another country, then sent to Vietnam before being sent to the U.S., those goods are going to be subject to a 40% tariff. And this 40% rate is mostly aimed at China because many companies were making products in China, then shipping up to Vietnam, slapping a new label on, and then sending them to the U.S. to try to avoid the high tariffs on Chinese imports.

But now this loophole seems to be closed. But overall, it's great to see another trade deal get done, especially with a country like Vietnam where a lot of manufacturing happens for companies like Lulu Lemon and Nike, but it also shows that tariffs are here to stay. Now, you might get a few more last-minute trade deals before the July 9th deadline, which is when Trump's 90-day pause on reciprocal tariffs officially expire. Now, the other big macroeconomic news was the June jobs report, which dropped this morning, and the numbers are looking pretty good. According to this report, the U.S. economy added 147,000 jobs in June, which is way more than the 111,000 jobs that were expected.

On top of that, the unemployment rate drops to 4.1%. So the labor market continues to be strong, showing very little signs of weakness, which is great to see, but this also lowers the odds of a Fed rate cut anytime soon. Because remember, the Fed has two goals to keep inflation low and to keep employment high. And with a strong jobs report like the one we just had, the Fed's not going to be in any rush to cut interest rates. In fact, before this jobs report, the odds of a rate cut at the July Fed meeting was 20%, but now the odds are down to less than 5%, according to the CME Fed Watch tool. So we might have to wait till September until we get a rate cut. I'm sure President Trump is going to have a few comments

about that. But hey, the Fed meeting isn't until July 30th, so a lot can happen until then. As always, we'll keep you guys in the loop of everything that's happening in the markets all summer. So make sure you guys are subscribed to the podcast and tuning in every day. Let's run through some headlines. Starting with Apple. For the first time in two years, Apple saw iPhone sales grow in China. According to Counterpoint Research, iPhone sales rose by 8% year over year in Q2. That's the first time Apple posted growth in China since Q2 of 2023.

Apple's growth is likely because of discounts offered by Chinese e-commerce platforms for the iPhone 16, during the month of May, right before the 618 shopping festival, which is China's version of Cyber Monday. Apple also raised trade-in values to sweeten the deal. So those efforts helped boost sales for Apple, which is a nice win for them, but they continued to lose market share to Chinese brands like Huawei and Xiaomi. As of Q1 of 2025, Apple held 15% of market share in China, while Chinese competitors like Huawei and Xiaomi each control 19%. This is according to counterpoint research. And the big reason that Apple struggles to stand out in China is because of AI. See, Huawei and Xiaomi are pushing new phones with their own homegrown AI models.

Meanwhile, Apple is still trying to figure out how to bring their AI features to China. Now, they've reportedly been exploring a partnership with Alibaba, but last month, the Financial Times reported that Beijing has been blocking those efforts, especially in the middle of this trade war with the U.S. So maybe now that tensions are easing between the U.S. and China, Apple can move forward with their partnership with Alibaba when it comes to AI. But long term, Apple is going to have to figure out an AI strategy if they want to stand out in the Chinese market.

Now, sticking with China and trade, we got a new development in the chip wars between the U.S. and China. The U.S. government is lifting export restrictions on chip design software to China as part of the new trade deal. And this move is being seen as a mini-seas fire in the broader tech cold war. The Commerce Department notified chip design software companies like Synopsis, Cadence design systems and Siemens that they no longer need export licenses to do business in China. These three companies control much of the EDA market, which stands for electronic design automation.

EDA software is a pretty critical tool used to design every advanced chip from Nvidia GPUs to Apple processors. Synopsis and Cadence dominate the space with a combined 60% market share, and both of these companies get a decent chunk of their revenue from China. Synopsis pulled in 16% of their sales from the region, while it's a lot of their sales. Cadence got about 12%. So not a surprise here, but their shares are rallying this morning after this news of easing of the restrictions. Now, in exchange for the U.S. government allowing the EDA tools back into China, China is pledging to expedite its export approval for critical minerals to the U.S. So, you know, it seems like the trade war between the two largest economies

is finally inching closer to a truce. I wonder if this is all being set up for NVIDIA to potentially be allowed to sell their most advanced chips back into China soon. Let's talk about some stocks making moves today. Data Dog shares are up 10% this morning on the news that the company will be added to the S&P 500. Now, companies tend to get a bump in their stock price when they get included into the S&P 500 because index funds and ETFs that track the S&P are now required to snap up shares of the company. And it also brings credibility to the company because there are some strict criteria that companies have to meet before they're added to the S&P. So big day for Data Dog. The company provides analytics and security tools for cloud applications, basically helping

companies keep their cloud infrastructure running smooth and secure, and they compete with giants like Cisco. Now, on the flip side, shares of Centine are coming off a rough day. The stock tanked 40% yesterday after the health insurer cut its forecasts due to weak performance in its Affordable Care Act marketplace plans. The ACA exchanges are where people shop for insurance plans, you know, like health care.gov, and it's also tied to Medicaid offerings in several states. To make matters worse for Centine,

President Trump's big beautiful spending bill, which just recently passed the Senate, includes $1 trillion in Medicaid cuts, and then ACA funding is also at risk in this bill, which obviously wouldn't be great for Centine's business. So as a result, Centine stock took a big hit yesterday. It's trying to make a little comeback today.

It's up around 3%, but it's got a lot of ground to make up. Let's wrap the show with a fun fact. 62% of Americans say they own stocks in 2025. This is according to a poll from Gallup. And that 62% matches last year's figure and continues a rebound we haven't seen since before the great financial crisis. See, from 2001 to 2007, stock ownership was around 62%.

But then after the 2008 crash, that number dipped and stayed below 60% for more than a decade, bottoming out at just 52% ownership in 2013. I mean, it wasn't until 2023 that we finally broke back above the 60% mark, so it took like 15 years for Americans to trust the stock market again. You know, I feel like these days owning stocks is such a big part of how we do retirement planning. Between 401Ks and Roth IRAs and Robo advisors, I feel like even people who don't follow the markets end up investing. So I wonder if we're going to see ownership percentages of stocks get to 70% one day, maybe even higher. You know, I think the newer generation is a lot more comfortable investing. and there are so many great tools that make it so easy to invest, like public.com.

You can start investing in just a few taps. Overall, it's great to see Americans starting to invest again, and hopefully these percentages keep going up. I think the more people that are invested in the markets and build well through the markets, the better it is. Well, all right, guys, that's the rundown for today. That's the rundown for this week. Remember, the stock market is closing a few hours early today at 1 p.m. Eastern,

and the markets are closed tomorrow for Independence Day. So we're not going to have a show tomorrow. We are still going to have a deep dive episode come out this weekend. So make sure you guys keep an eye on your podcast feed for that. And then we'll be back here next week to talk more about the markets. Hope you guys enjoyed the show. If you did, then you have like nine extra seconds. Consider giving us a five-star rating on Apple, Spotify,

wherever you listen to your podcasts. And if you do listen on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out. And it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes.

And we'll see you guys back here this weekend for the deep dive.