The U.S. stock market is closed today, Friday, July 4, 2025, in observance of Independence Day, giving traders a moment to pause after a surprisingly resilient year. But as Wall Street celebrates the nation’s 249th birthday, a significant economic test looms, threatening to unravel the hard-won gains of 2025.
A Year of Defying the Odds
So far, 2025 has been a year of remarkable strength for U.S. equities. Despite a turbulent backdrop of global trade wars and geopolitical tensions involving Iran and Israel, all three major indices have charged to new all-time highs.
Year-to-date performance highlights the market’s powerful momentum:
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The Dow Jones Industrial Average has climbed 5.75%.
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The tech-heavy Nasdaq Composite has jumped 6.85%.
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The benchmark S&P 500 has surged an impressive 7%.
This robust performance has allowed the U.S. stock market to reign supreme, defying expectations of a slowdown in a chaotic year.
The “Liberation Day” Tariff Showdown
However, the impressive gains of 2025 are now facing their biggest threat yet: the expiration of a 90-day pause on President Trump’s sweeping “Liberation Day” tariffs.
Announced in early April, the tariffs initially sent markets tumbling before a temporary truce was called, allowing for a 90-day window for negotiations and exceptions. That crucial 90-day window is set to close on Wednesday, July 9.
The end of the tariff pause sets the stage for a high-stakes showdown that could dictate the market’s direction for the rest of the year. If the President allows the tariffs to take effect, analysts warn that the recent market rally could be wiped out in short order, taking investors “back to square one.” The fallout would likely not be contained to the U.S., with global markets also bracing for impact as their own yearly gains would be put at risk.
As Americans celebrate this holiday weekend, the financial world is watching the calendar with caution. The coming week is set to be a critical one, with the quiet holiday serving as the calm before a potential economic storm set to arrive on July 9.
