📈 Datadog's S&P 500 Coronation

Good morning.

⚡ The Fast Five → Microsoft Axes Thousands Across Divisions, ElevenLabs Eyes Global IPO Push, OpenAI Inks $30B Oracle Deal, Del Monte Files Bankruptcy Protection, Netflix Doubles Down on Live

🔎 Market Trends → S&P 500, Nasdaq end higher on Vietnam trade deal, tech stocks; US Futures Subdued as Investors Eye Key Employment Data

🚨 Start Your Day with Market Movers: Opening Bell LIVE on FinTech.tv from 9-10AM EST

And now…

⏱️ Your 5-minute briefing for Thursday, July 3, 2025:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Nasdaq, S&P Hit Records as Vietnam Deal Revs Up Tesla, Eases Tariff Jitters

Wall Street rallies on trade clarity and Tesla’s long-awaited bounce. Nasdaq +0.9% to 20,393.1 and S&P 500 +0.5% to 6,227.4 closed at fresh all-time highs. The Dow slipped -0.02%, pausing after a 4-day climb.

The Big Picture:

President Trump’s new trade deal with Vietnam reignited market momentum, offering a shot of certainty after weeks of tariff tensions. While Vietnam will now face a 20% tariff—up from April's 10%—investors largely viewed it as a manageable midpoint.

Tesla (TSLA) led the charge, breaking its six-day losing streak. Energy stocks surged alongside a 3% spike in oil prices, while health care dragged.

Yields ticked higher as markets digested a mixed labor picture. Private job losses and cautious hiring hint at a cooling economy—yet inflation remains sticky, keeping the Fed on pause.

Market Movers:

• Tesla (TSLA) +4.97%: Despite a drop in Q2 deliveries, the results beat “whisper numbers,” according to Wedbush, triggering a relief rally as investors recalibrated growth expectations.

• Centene (CNC) -40.37%: The health insurer pulled its full-year earnings forecast, citing disappointing state revenue—raising red flags over Medicaid stability.

• Packaging Corp. of America (PKG) +7.59%: Continued to benefit from its $1.8B acquisition of Greif’s containerboard unit, solidifying its edge in logistics.

What They’re Saying:

“Most investors had already baked in higher Vietnam tariffs... today’s deal simply confirmed the new normal.”— Truist Securities

WHAT WE’RE WATCHING
Events

• Today: Bureau of Labor Statistics - Average Hourly Earnings m/m - 8:30am

  Why You Should Care: It's a leading indicator of consumer inflation - when businesses pay more for labor the higher costs are usually passed on to the consumer;

• Today: Bureau of Labor Statistics - Non-Farm Employment Change - 8:30am

  Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity;

• Today: Bureau of Labor Statistics - Unemployment Rate - 8:30am

  Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy;

• Today: Institute for Supply Management - ISM Services Purchasing Managers' Index (PMI) - 10:00am

  Why You Should Care: It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy;

Earnings Reports

• Today: No noteworthy earnings reports

• Tomorrow: U.S. Stock Market Holiday

MARKET BRIEF
Leading News

Datadog's S&P 500 Coronation: A $49B Cloud Monitoring Play Gets Its Due

Why it matters:

Index inclusion triggers mandatory buying from passive funds, creating a technical tailwind for a profitable tech company that's been unfairly punished this year.

Zoom Out:

The S&P 500's latest tech addition reflects a broader truth: cloud infrastructure isn't just growing—it's becoming mission-critical. Datadog (DDOG) provides the digital equivalent of air traffic control for companies juggling thousands of cloud applications, servers, and databases.

While the stock jumped 10.8% in premarket trading Wednesday, this isn't just index euphoria. The company's $49 billion market cap rests on genuine fundamentals: $761.6 million in quarterly revenue with actual profits, a rarity in today's "growth at any cost" landscape.

The timing is particularly shrewd. Datadog was down 5.5% year-to-date before the announcement, while the S&P 500 gained 5.4%—creating a rare value opportunity in the monitoring software space.

Key Insights:

• Index fund mechanics: Passive funds managing roughly $7 trillion must buy DDOG shares before July 9, creating predictable demand regardless of market sentiment

• Competitive moat: Unlike flashy AI plays, Datadog's "observability" platform becomes stickier as companies' cloud complexity grows—think digital plumbing that's expensive to replace

• Profitable growth: $24.6 million net income on $761.6 million revenue suggests management discipline in a sector known for cash burn

Market Pulse:

"This is about structural demand meeting a quality operator," notes one institutional investor tracking the cloud monitoring space.

Bull’s Take:

S&P 500 inclusion validates Datadog's transition from growth story to blue-chip infrastructure play—exactly what smart money wants in an uncertain macro environment.

Headlines

• Tech Giant Microsoft Lays Off Thousands, Hits Xbox and Sales Teams (link)

• AI Giant Warns Robinhood Tokens Aren't Authorized Equity (link)

• AI voice startup ElevenLabs pushes global expansion as it gears up for an IPO (link)

• OpenAI signs $30bn data center deal with Oracle (link)

• Del Monte Files for Bankruptcy as Canned Food Sales Slide (link)

• Netflix continues its big push into live television (link)

CRYPTO
Fear & Greed

Headlines

• Bitcoin Futures Open Interest Surges Nearly 10% as BTC Eyes $110K (link)

• Coinbase is Driving Adoption of Circle's USDC for Payments, Financial Services (link)

• Bitcoin miner Hut 8 signs five-year capacity contracts with Ontario grid operator for gas-fired power plants (link)