Every July 1, retired MLB All-Star third baseman Bobby Bonilla receives a $1.19 million check from his former team, the New York Mets, even though he hasn’t played an MLB game in over 25 years. The reason is that back in 2000, the Mets owed Bonilla $5.9 million to buy out his contract, but instead of taking that cash up front, he negotiated a contract that spreads out $30 million in guaranteed payments to him through annual installments from 2011–2035. (1)  And so, July 1 has become a yearly tip of the cap from fans and players to Bonilla’s financial foresight—and a perfect excuse to razz the Mets all over again.

U.S. stocks are extended their scorching spring rally into the close of the second quarter, with the S&P 500 probing record levels as investors ride bets on Federal Reserve rate cuts, fading tariff risks, and stimulative tax and spending plans from Capitol Hill.

Trump’s “Liberation Day” initiative, which proposed significant tariffs on trillions of dollars in imports, signaled a clear push from the White House to prioritize American-made goods for U.S. consumers. Fears that tariffs could reignite inflation, however, keep the Fed from a dovish pivot. With Trump cranking up pressure for rate cuts, markets increasingly price a more dovish Fed, weighing on the dollar. 

Q2 earnings season will begin in early to mid-July, with major companies like banks kicking things off. Some investors are worried that expensive stock valuations and subdued levels of market risk could suggest markets are pricing in more profit growth and a better economic performance than is likely over the coming year. The S&P 500, which closed at a record high of 6201 points on June 30, is now trading at 22.8 times the collective earnings its constituents are expected to generate over the next 12 months.(2)

Collective second-quarter earnings for the index are forecast to rise 5.9% from last year to around $529 billion, according to LSEG data, but that growth rate is only around half of the 10% gain the benchmark has recorded since the end of March. (3)

Half of the benchmark’s 11 subsectors, meanwhile, aren’t expected to see any earnings growth at all. Of the six sectors that will generate higher profits, around 82% of the increase will come from just two: communications services and information technology.

LSEG data point to earnings growth of 8.5% for the year. That implies that stocks are valued at 23.4 times earnings, compared with their current 22.8 times, even though 8.5% is well below the 14% increase in profits expected at the start of the year.

U.S. Treasury yields fell in early trade to close out Q2 extending the prior week’s trend, as the economic outlook softens.

U.S. first-quarter GDP was revised lower to -0.5% from -0.2% previously, while consumer confidence is weak, data last week showed.

“As a result, U.S. yields declined and the dollar fell further, also due to speculation that Trump may soon pick a more dovish replacement for [Federal Reserve Chair] Powell,” Generali Asset Management said in a note.

The two-year Treasury yield fell 1 basis point to 3.729%; the 10-year yield declined almost 3 basis points to 4.254%; the 30-year yield dropped 3 basis points to 4.813%, according to Tradeweb. (4)

Wall Street closed Q2 at its strongest since 2023 but opened July with a mild pullback—Dow futures down 0.1%, S&P futures off 0.3%—as final tariff tweaks, earnings reports and the Senate’s sprint on President Trump’s “One Big, Beautiful Bill” ahead of the July 4 deadline weigh on sentiment. Despite resilient corporate profits and firmer consumer confidence, the tug-of-war between trade policy and that massive budget package shows markets remain firmly in Washington’s grip.

As always, I will be here to provide insights into and analysis on the latest market trends and developments. I am passionate about defining what’s next for investors because what’s new has already arrived, so if you need to define whether you have any financial blind spots in your financial life, please reach me directly at mark.martiak@prudential.com

1. ESPN.com, “Bobby Bonilla Day: New York Mets pay him $1.19M every July 1,” July 1, 2025.

2. BARRON’S TAKE June 30, 2025: Stocks Haven’t Been This Expensive Since 2003. Earnings Need to Justify That

3. LSEG Data: London Stock Exchange Group June 30, 2025

4. Dow Jones Newswires: U.S. Treasury Yields Drop as Economic Outlook Softens by Emese Bartha

Mark Martiak is a Financial Advisor affiliated with and offers securities and investment advisory services through LPL Enterprise (LPLE), a Registered Investment Advisor. Member FINRA/SIPC, and an affiliate of LPL Financial. The views expressed in this column are solely those of the author and do not necessarily reflect the opinions of LPL Financial or LPLe. This material is for informational purposes only and is not intended to provide specific financial advice or recommendations for any individual.

Past performance is no guarantee of future results. Such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data is taken from sources believed to be dependable, but no guarantee is given of its accuracy. Indexes are unmanaged, and investors are not able to invest directly in any index. Past performance is no guarantee of future results.

News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified, when necessary, with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed dependable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not happen. U.S. Treasury securities are guaranteed by the federal government as to the principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investment strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of thirty widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of five hundred largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. The market indexes listed are unmanaged and are not available for direct investment.