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Lutnick noted that a 35% tariff on Canadian goods could be possible, depending on how Canada responds.
The U.S. Secretary of Commerce has suggested a 35% tariff on all Canadian goods not included in the USMCA. The deadline for this proposal is August 1, as stated by President Trump.
The Secretary noted that things could change, depending on the actions of Canadian Prime Minister Mark Carney.
Core PCE inflation stays at 2.8% as US stocks fall amid mixed economic indicators and tariffs
In June, U.S. core PCE inflation rose by 0.3% from the previous month, which was expected and the highest monthly increase since February. The annual rate held steady at 2.8%, slightly above the forecasted 2.7%.
This data reflects the Federal Reserve’s worries as inflation nears 3%, largely due to price hikes from tariffs on goods. Inflation in services, especially financial services, is adding to the pressure. The Fed sees tariff-related inflation as temporary, but the ongoing 0.3% monthly increases suggest inflation remains unstable, which could affect future rate cuts. The chance of a rate cut in September has dropped from 65% to 39%, with the rate expected to stay between 4.25% and 4.50%.
US Jobs and Stock Market Data
U.S. job data showed mixed results; while claims data improved, announced layoffs increased. U.S. stock markets opened higher due to gains from Meta and Microsoft but closed lower, with NASDAQ dropping by 7.23 points. The Dow decreased by 333.30 points, and the S&P fell by 23.51 points. Copper prices plummeted after new tariffs on semi-finished copper products were announced, though refined copper was unaffected. Prices dropped by $1.23, or 22.05%. Crude oil fell by $0.64 to $69.35, gold rose by $13.89 to $3,289.71, and Bitcoin declined by $1,336 to $116,499. President Trump revealed plans for a trade deal with Mexico and proposed a potential 35% tariff on Canadian imports, secondary tariffs on Russian oil, and urged 17 pharmaceutical companies to lower prices. With core inflation steady at 2.8%, the market is quickly adjusting to the likelihood of no rate cut in September. Reflecting on the 2022-2023 cycle, the Fed maintained a hawkish stance longer than many anticipated, which may happen again. This suggests positioning for prolonged higher rates by using options on Treasury ETFs or shorting short-term rate futures ahead of tomorrow’s jobs report.Volatility and Market Strategy
The NASDAQ’s drop, which erased a previous 327-point gain, serves as a warning for the stock market. The VIX, a key measure of market fear, has jumped from the mid-teens to over 22 in the past two weeks, indicating rising uncertainty. Traders might want to buy put options on broad market indices like the S&P 500 to protect against further losses, as tech earnings alone aren’t sustaining the market. The sharp 22% decline in copper prices stems from new 50% tariffs on semi-finished products. However, the exemption for raw copper, like cathodes traded on the LME (which only fell 3% yesterday), presents a unique opportunity. This suggests a spread trade: going long on raw copper futures while purchasing puts on industrial companies highly dependent on finished copper imports. Increased trade tensions, including the proposed 35% tariff on Canada, raise the risk of currency fluctuations. This makes buying call options on the USD/CAD pair an appealing hedge against a weaker Canadian dollar. Furthermore, the introduction of secondary sanctions on Russian oil importers could tighten global supply, indicating that yesterday’s dip in crude prices might be temporary. Therefore, considering call options on oil could be worthwhile. Create your live VT Markets account and start trading now.EIA reports higher than expected change in US natural gas storage of 48 billion cubic feet
The United States Energy Information Administration (EIA) announced a natural gas storage increase of 48 billion cubic feet on July 25, 2025. This change was higher than the expected increase of 38 billion cubic feet.
The Australian dollar struggled against the US dollar, trading between 0.6430 and 0.6420, due to the strength of the US dollar. Meanwhile, the Euro bounced back against the dollar, reaching 1.1460, despite the dollar’s robust performance.
Gold and Ripple Market Overview
Gold faced selling pressure as it tested around $3,300 per troy ounce, amid falling US yields and slight losses for the dollar. Ripple (XRP) dropped to $3.09 after failing to break above $3.32, reflecting changes in market sentiment following the Federal Reserve’s interest rate decision. The Federal Open Market Committee (FOMC) had differing opinions on the impact of tariffs, raising concerns about potential risks in the labor market and inflation. There is growing interest in brokerage options for EUR/USD trading and leveraged trading opportunities in the Forex market. The bigger-than-expected 48 billion cubic feet natural gas build suggests a well-supplied market. This is a bearish signal, as consistent inventory increases last summer also led to price declines heading into the fall. Therefore, buying put options on natural gas futures or taking short positions could be a smart strategy to benefit from this supply surplus. The Euro is showing resilience against the US dollar, recently climbing back to 1.1460. This strength, despite the US dollar’s overall strength, indicates positive momentum for the Euro, especially as recent Eurozone PMI data reached a six-month high. Buying call options on EUR/USD, targeting the 1.1500 resistance level seen earlier this year, might be worth considering. On the other hand, the Australian dollar remains weak, struggling around the 0.6420 level. This area has served as key support in the past, especially during the latter half of 2024. A persistent dip below this level may lead to further declines, making put options on the AUD/USD a potentially wise hedge or speculative move. Gold shows weakness as it tests the $3,300 per ounce mark, even with a slight decline in US yields. This indicates that selling pressure is overcoming the typical factors that usually support gold. Notably, open interest for put options with a $3,250 strike price has risen over 12% this past week, suggesting traders are bracing for a potential drop.Ripple and FOMC Insights
Ripple’s inability to break through the $3.32 resistance level last week highlights a slowdown in buying momentum. The retreat to $3.09 shows that sellers are gaining control in the short term, with trading volume down nearly 25% since the rejection. We should monitor for a possible test of the $3.00 support level; if it breaks below that, the downward trend could intensify. The split within the FOMC over tariffs and inflation adds significant uncertainty in the market. This disagreement, noted in the July meeting minutes, means that the upcoming August inflation report will be important. We believe this situation is likely to increase volatility, as the Cboe Volatility Index (VIX) has risen from 14 to 17 this month, making strategies like buying straddles on major indices a relevant way to trade the potential for sharp market movements. Create your live VT Markets account and start trading now.US stock indices fell, recovering earlier gains, while Meta and Microsoft maintained most of their profits.
Major US stock indices finished lower, reversing earlier gains. The NASDAQ, which had risen by 327 points, ended down by 7.23 points.
The Dow Industrial Average fell by 330.30 points, settling at 44,130.98, after a prior climb of 204.54 points. The S&P dropped by 23.51 points, and the Russell 2000 declined by 20.74 points.
Market Winners And Losers
Shares of Meta and Microsoft maintained most of their gains after posting strong earnings. Meta’s stock rose by $78.23, and Microsoft increased by $20.26 in after-hours trading. Apple exceeded expectations with Q3 2025 earnings of $1.57 EPS and $94.04 billion in revenue, resulting in a $3.80 increase in its share price. Coinbase reported Q2 2025 earnings of $5.14 EPS but missed EBITDA targets, causing its shares to fall by $16.21. Stryker showed better-than-expected Q2 2025 results with an adjusted EPS of $3.13, but its shares dropped by $14.78. First Solar also exceeded expectations with an EPS of $3.18, boosting its shares by $7.27. Amazon beat EPS expectations but fell short on AWS net sales, leading to a $7.13 decrease in its share price.Market Warnings And Strategic Observations
Today, July 31, 2025, shows clear warning signs in the market. The NASDAQ giving up a 327-point gain to close flat is a classic reversal pattern, indicating that buying pressure is fading. Traders should brace for more volatility. This drop reveals that even impressive earnings from major companies like Meta and Apple aren’t enough to sustain market rallies. The CBOE Volatility Index (VIX) jumped over 15%, closing at 15.2, its highest in a month. Buying call options on the VIX could be a smart move to profit from the anticipated rise in fear for August. The after-hours earnings reactions are revealing. Companies like Amazon and Coinbase may have beaten profit estimates, but their stocks still fell. This signals that good news is already baked into prices, a “sell the news” reaction that suggests limited upside potential. Looking at the broader picture, the latest CPI inflation report showed a 3.4% increase, slightly above the desired 3.2%. This maintains pressure on the Federal Reserve and unsettles investors hoping for rate cuts. It’s important to monitor the Russell 2000 index, which struggled the most today. This indicates broad market weakness beyond just big tech stocks. We believe buying put options on the IWM, the ETF tracking the Russell 2000, is a wise way to prepare for a potential downturn. This situation resembles the market instability of late 2023, where rallies repeatedly failed at important levels. The CBOE total put/call ratio has increased to 0.95 from a low of 0.80 last week, indicating that smart money is starting to protect against losses. Given today’s dramatic reversal, buying near-term put options on the QQQ, the ETF for the NASDAQ 100, is a key strategy. The inability to hold gains suggests a potential test of lower support levels in the weeks ahead. We need to shift our focus from chasing rallies to guarding against a potential pullback. Create your live VT Markets account and start trading now.Lutnick stated that a 35% tariff on Canadian goods could happen based on Canada’s response.
The U.S. Secretary of Commerce has proposed a 35% tariff on all Canadian goods that are not included in the USMCA agreement. President Trump has set August 1 as the deadline for this measure.
The Secretary noted that the situation could still change based on actions from Canadian Prime Minister Mark Carney.
Deadline Approaches for Tariff Decision
With the August 1 deadline just hours away, the threat of a 35% tariff on various Canadian goods is causing significant tension. This situation could lead to a major shift in the markets, especially affecting the USD/CAD currency pair, which is poised for a significant move. The stakes are high because two-way trade in goods not covered by the current agreement exceeded $250 billion in 2024, according to recent figures from the Commerce Department. Concerns are growing in the market, reflected by a spike in the CBOE Volatility Index for the S&P/TSX 60, which has risen over 30% this week. This uncertainty makes holding positions without hedging a risky move as the deadline approaches. Traders should focus on buying downside protection for Canadian assets. This involves purchasing put options on the iShares MSCI Canada ETF (EWL) or specific Canadian exporters in the auto parts and resource sectors. These positions will benefit if the tariffs are enacted and Canadian stocks decline.Strategies for Possible Market Changes
For those looking to take risks, speculating on a weaker Canadian dollar through futures or call options on USD/CAD is a straightforward response to the tariff news. The Canadian dollar has already dropped to a two-year low around $0.70 USD, and could drop further if tariffs are confirmed. Given the high volatility, options straddles, which profit from significant price movements in either direction, are also a viable, though costly, option. We are seeing a situation similar to the US-China trade disputes from 2018 to 2019, where market trends were heavily influenced by news headlines for months. A last-minute phone call could trigger a significant relief rally, impacting anyone who has taken overly pessimistic positions. On the other hand, if the deadline passes quietly, we can expect a sharp downturn. Create your live VT Markets account and start trading now.Core PCE inflation holds steady at 2.8% as US stocks fall with mixed economic indicators and tariffs
In June, U.S. core PCE inflation rose by 0.3% from the previous month. This was expected and marked the biggest monthly increase since February. The annual rate stayed at 2.8%, which is slightly above the predicted 2.7%.
This data raises concerns for the Federal Reserve as inflation nears 3%. Price increases from tariffs are driving this inflation. Inflation in services, especially financial services, adds more pressure. Although the Fed sees tariff-related inflation as temporary, the ongoing 0.3% monthly increases show continued inflation volatility, which could affect future rate cuts. The chances of a rate cut in September have dropped from 65% to 39%, with rates expected to stay between 4.25% and 4.50%.
US Jobs and Stock Market Data
U.S. jobs data showed mixed results. Claims data was better than expected, but layoffs are rising. U.S. stock markets started higher, helped by gains in Meta and Microsoft, but closed lower. The NASDAQ fell by 7.23 points, the Dow dropped by 333.30 points, and the S&P declined by 23.51 points. Copper prices fell sharply after new tariffs on semi-finished copper products were announced, but refined copper wasn’t affected. The price dropped by $1.23, or 22.05%. Crude oil fell by $0.64 to $69.35, gold rose by $13.89 to $3,289.71, and Bitcoin dropped by $1,336 to $116,499. President Trump announced plans for a trade deal with Mexico, a possible 35% tariff on Canadian imports, secondary tariffs on Russian oil, and urged 17 pharmaceutical companies to lower their prices. With core inflation stubbornly at 2.8%, the market is moving away from expecting a rate cut in September. Looking back at the 2022-2023 cycle, the Fed remained cautious longer than many thought, and this could happen again. This suggests preparing for higher rates for an extended period through options on Treasury ETFs or selling short-term futures before tomorrow’s jobs report.Volatility and Market Strategy
The NASDAQ’s drop after gaining 327 points is a warning sign for stocks. The VIX, a key measure of market fear, has jumped from the mid-teens to over 22 in the last two weeks, indicating increased uncertainty. Traders should think about buying puts on major indices like the S&P 500 to protect against further losses, as tech earnings alone aren’t enough to keep the market stable. The 22% plunge in copper prices comes from new 50% tariffs on semi-finished products. However, raw copper, like cathodes traded on the LME, only fell by 3% yesterday, highlighting a potential opportunity. This suggests a spread trade: go long on raw copper futures while buying puts on industrial companies that rely heavily on finished copper imports. Increased trade tensions, like the threat of a 35% tariff on Canada, boost the risk of currency volatility. This makes buying call options on the USD/CAD pair a smart hedge against a weakening Canadian dollar. Additionally, the plan for secondary sanctions on Russian oil importers could tighten global supply, implying that the recent dip in crude prices may be temporary. Considering call options on oil is now worth evaluating. Create your live VT Markets account and start trading now.EIA reports higher than expected natural gas storage change of 48B in the US
The United States Energy Information Administration (EIA) reported a natural gas storage increase of 48 billion cubic feet on July 25, 2025. This was higher than the expected 38 billion cubic feet.
The Australian dollar struggled against the US dollar, trading between 0.6430 and 0.6420 due to the increasing strength of the US dollar. Meanwhile, the Euro gained ground against the dollar, reaching 1.1460 despite the US dollar’s overall strength.
Gold And Ripple Market Overview
Gold experienced selling pressure, testing $3,300 per troy ounce amid lower US yields and slight losses in the US dollar. Ripple (XRP) dropped to $3.09 after struggling to break past $3.32, reflecting a shift in market sentiment after the Federal Reserve’s interest rate decision. The Federal Open Market Committee (FOMC) had mixed opinions on the impact of tariffs, expressing concerns about labor market risks and inflation. Interest in EUR/USD trading and leveraged trading options shows the dynamic nature of the Forex market. The larger-than-expected 48 billion cubic feet increase in natural gas storage on July 25 suggests a well-supplied market. This could be seen as a bearish sign, as consistent inventory builds during the summer of 2024 led to lower prices in the fall. It may be wise to consider buying put options on natural gas futures or taking short positions to benefit from this supply surplus. The Euro has shown resilience against the US dollar, returning to 1.1460. This strength suggests positive momentum, especially since the recent Eurozone PMI data reached a six-month high. Buying call options on EUR/USD, aiming for the 1.1500 resistance level seen earlier this year, could be a good strategy. Conversely, the Australian dollar remains weak, hovering around 0.6420. This level has been a key support zone in the past, especially in the second half of 2024. If it breaks lower, it could lead to further declines, making put options on the AUD/USD a good hedge or speculative option. Gold is testing the $3,300 per ounce level, indicating significant selling pressure despite a small decline in US yields. This suggests that selling is overshadowing the usual factors that drive gold prices. Open interest for put options at a $3,250 strike price has risen over 12% this past week, indicating traders are anticipating a potential price drop.Ripple And FOMC Insights
Ripple’s inability to break the $3.32 resistance level last week means buying momentum is waning. The move down to $3.09 shows that sellers are taking charge, with trading volume dropping nearly 25% since the rejection. We should keep an eye on the $3.00 psychological support level, as dropping below this could speed up a downward trend. The split within the FOMC regarding tariffs and inflation creates uncertainty in the market. This disagreement, evident in the July meeting minutes, makes the upcoming August inflation report crucial. This environment is likely to see increased volatility, as the Cboe Volatility Index (VIX) has risen from 14 to 17 this month. Strategies like buying straddles on major indices could be a smart way to capitalize on potential sharp moves. Create your live VT Markets account and start trading now.US stock indices declined, reversing earlier gains, while Meta and Microsoft held onto most of their profits.
Major US stock indices ended lower, giving up earlier gains. The NASDAQ, which had risen by 327 points, closed down 7.23 points.
The Dow Industrial Average fell by 330.30 points, finishing at 44,130.98, after peaking with a gain of 204.54 points. The S&P dropped by 23.51 points, and the Russell 2000 decreased by 20.74 points.
Market Winners And Losers
Meta and Microsoft retained most of their gains after reporting strong earnings. Meta’s shares rose by $78.23, while Microsoft increased by $20.26 after market hours. Apple’s Q3 2025 earnings beat expectations, with EPS at $1.57 and revenue of $94.04 billion, boosting its shares by $3.80. Coinbase reported Q2 2025 earnings with EPS at $5.14 but fell short of EBITDA expectations, leading to a share price drop of $16.21. Stryker reported better-than-expected Q2 2025 results, with adjusted EPS of $3.13, but its shares fell by $14.78. First Solar also exceeded expectations, showing EPS at $3.18, and its shares rose by $7.27. Amazon beat EPS expectations but missed on AWS net sales, resulting in a decline of $7.13 in its stock price.Market Warnings And Strategic Observations
Today, July 31, 2025, highlights a significant warning in the market. The NASDAQ’s drop from a 327-point gain to a flat close shows a classic reversal pattern. This implies that buying pressure is fading, and traders should brace for increased volatility. This weakness indicates that even impressive earnings from companies like Meta and Apple can’t support a rally. The CBOE Volatility Index (VIX) surged over 15% to close at 15.2, its highest in a month. Buying call options on the VIX could be a smart move to profit from the rising fear expected in August. The reaction to after-hours earnings is revealing. When firms like Amazon and Coinbase surpass profit estimates but their stocks decline, it shows the good news is already factored in. This “sell the news” response serves as a bearish sign, indicating limited upside potential. This behavior fits into a broader context. The latest CPI inflation report showed a rise to 3.4%, higher than the 3.2% expected by economists. This keeps pressure on the Federal Reserve and unsettles investors hoping for rate cuts. We should monitor the Russell 2000 index closely, which underperformed today. This suggests the broader market weakness extends beyond major tech stocks. We believe buying put options on the IWM, an ETF tracking the Russell 2000, is a wise strategy for potential downturns. The current market situation feels reminiscent of the choppy conditions from late 2023, where rallies consistently stalled at significant levels. The CBOE’s total put/call ratio has also risen to 0.95 from a low of 0.80 last week, indicating that savvy investors are starting to hedge against declines. Given the significant reversal, purchasing near-term put options on the QQQ, the ETF tracking the NASDAQ 100, appears to be a key strategy. Today’s inability to maintain gains suggests a test of lower support levels in the coming weeks. We should focus on protecting against a pullback rather than chasing rallies. Create your live VT Markets account and start trading now.Apple exceeds expectations in Q3 2025 with record revenues and sales growth across all segments
Apple announced impressive third-quarter results, showing its biggest revenue growth since December 2021. Earnings per share reached $1.57, beating the expected $1.43. Total revenue hit $94.04 billion, exceeding the forecast of $89.3 billion.
iPhone sales brought in $44.58 billion, higher than the anticipated $40.06 billion. In Greater China, revenue was $15.37 billion, just over the expected $15.19 billion. The product segment earned $66.61 billion, compared to the projected $62.36 billion.
On the downside, iPad revenue was $6.58 billion, missing the estimate of $7.07 billion. However, Mac sales were better than expected, reaching $8.05 billion against a forecast of $7.3 billion. The Wearables, Home, and Accessories segment earned $7.40 billion, falling short of the $7.78 billion estimate.
Apple noted that nearly 10% of its sales growth came from consumers making early purchases due to upcoming tariffs. The company also set a record for June quarter revenue, with double-digit growth in iPhone, Mac, and Services across all regions.
These strong results indicate that Apple’s core business remains robust, mainly driven by iPhone sales. As a result, we can anticipate a positive movement in the stock price soon.
With earnings now out, the high implied volatility from options is expected to decline. This “IV crush” means it will be cheaper to open new positions in the coming weeks. Traders betting on this drop in volatility may be cashing in their profits now.
We should also note that some sales were advanced due to tariff announcements. This could mean that the current strong numbers might take away from future demand, possibly affecting results for the next quarter. This creates uncertainty as we approach the end of the year and the new iPhone launch.
The overall market situation adds more caution, with the VIX staying low around 15 for most of July 2025. New government data showing inflation rising to 3.1% has raised concerns about Federal Reserve actions, which could limit how high stocks rise despite good news.
Reflecting on the past offers a warning. Last time growth was this strong was in December 2021, after which the stock peaked early in 2022 before a sharp decline. History shows that a standout quarter can sometimes precede a correction.
Additionally, both iPad and Wearables revenues fell short of expectations. While the iPhone drives the company, these misses indicate that some of Apple’s product lines face challenges. This might suggest a change in consumer spending habits.
The Euro weakens against the US Dollar, declining for the sixth consecutive day near lows
The EUR/USD currency pair is close to a seven-week low but remains above the key support level of 1.1400. The US Dollar’s strength has kept the Euro under pressure for six days in a row, with the US Dollar Index reaching a new two-month high near the 100 mark.
In July, Germany’s Consumer Price Index (CPI) rose by 0.3% month-over-month, while the annual rate held steady at 2.0%, aligning with market expectations. Additionally, US data revealed that the core PCE Price Index grew by 0.3% month-over-month in June, with a yearly increase of 2.8%, slightly exceeding the forecast of 2.7%.
