Overnight, British Admiralty orders Convoy PQ 17 to scatter and simultaneously instructs the covering force of cruisers and destroyers to return to Britain. The Admiralty has information about imminent U-boat attacks and also fears the arrival of German battleships Tirpitz, Lutzow & Admiral Scheer and cruiser Admiral Hipper. The German heavy ships never arrive but the scattered Allied merchant ships fall easy prey to U-boats and aircraft. During the course of the day, torpedo bombers sink 5 merchant ships and British rescue ship Zaafaran while several others are damaged. U-88 and U-703 each sink 2 while U-334 and U-456 sink 1 each, including several vessels damaged or stopped by the bombers.
At 11.51 AM, in the Baltic Sea off Memel, Latvia, Soviet submarine ShCh-320 sinks German coastal freighter SS Anna Katrin Fritzen.
First Battle of El Alamein. Rommel decides to halt his offensive. He knows he is low on supplies (due to RAF bombing his supply columns from Benghazi), almost out of tanks and, most importantly, out of luck. He also acknowledges that British General Auchinleck “deploys his forces with considerable skill”. Auchinleck further strengthens his hand by bringing the experienced Australian 9th Division back into the line (following a rest in Palestine and Syria after their defense of Tobruk during the siege).
At Kiska Island in the Aleutians, US submarine USS Growler attacks Japanese destroyers in Kiska Harbour. USS Growler blows the bow off Kasumi (10 killed, towed back to Japan and under repair until July 1943), damages Shiranuhi (3 dead) and sinks Arare (104 killed, 42 survivors rescued by lifeboats from Shiranuhi).
At 10.40 PM, British minesweeper HMS Niger leads Convoy QP 13 (empty ships returning from USSR to Iceland and Scotland, running at the same time as PQ 17) into a British minefield 10 miles North of Iceland, due to a navigation error in bad weather. HMS Niger hits a mine and sinks (149 killed including naval passengers returning from USSR). 6 merchant ships hit mines and 5 sink. British minesweeper HMS Hussar eventually obtains an accurate fix on land and leads the remaining 30 merchant ships to safety, arriving at Reykjavik on July 7.