The week on Wall Street ended with mixed dynamics as investors digested fresh inflation data, Fed officials’ comments, and new tariff measures from the White House.
At the start of the week, indexes pushed higher, hitting fresh records on hopes of imminent rate cuts. Fed Governor Michelle Bowman stated she supports a September cut and favors three reductions by year-end. This fueled optimism, with markets pricing in an 88% chance of a 25 bp cut.
At the start of the week, indexes pushed higher, hitting fresh records on hopes of imminent rate cuts. Fed Governor Michelle Bowman stated she supports a September cut and favors three reductions by year-end. This fueled optimism, with markets pricing in an 88% chance of a 25 bp cut.
By midweek, sentiment shifted after stronger-than-expected producer price data (PPI) revealed companies are passing higher costs to consumers faster than anticipated. This reignited inflation concerns and erased bets on a larger September cut. Markets pared back expectations, and stocks slipped from their highs.
Trade policy remained a key driver. President Donald Trump extended the US-China tariff truce for another 90 days but confirmed a 100% tariff on semiconductor imports and doubled tariffs on Indian goods to 50%. According to Bloomberg Economics, average US tariffs may rise to 15.2%, sharply higher than last year’s 2.3%.
Geopolitical risks also weighed on sentiment. Markets awaited the Trump-Putin summit in Alaska, though both Trump and Ukrainian President Zelenskiy downplayed expectations of progress toward ending the war in Ukraine.
Toward the week’s end, weaker US consumer sentiment added pressure. The University of Michigan index fell to 58.6, signaling rising inflation expectations and plans among 58% of households to cut spending. This reinforced fears of slowing economic momentum.
On the corporate side, earnings season was surprisingly strong. S&P 500 companies reported over 9% year-on-year profit growth in Q2, far above the 2.8% expected before the season. Roughly 82% of firms beat analysts’ estimates, marking the best season in four years.
Individual stock moves reflected this divergence. Tesla dropped nearly 1.5%, while UnitedHealth Group soared over 12% after filings revealed increased positions by Warren Buffett’s Berkshire Hathaway and David Tepper’s Appaloosa. Intel gained 2.7% amid reports of possible government participation via the Chips Act. In contrast, Applied Materials tumbled 14% after issuing weak guidance.
Bond markets mirrored the uncertainty. The 10-year Treasury yield fluctuated between 4.23% and 4.31%, balancing optimism about Fed cuts with inflationary risks.
Overall, the week reflected a tug-of-war between strong corporate earnings and expectations of monetary easing on one side, and the pressures of inflation, tariff escalation, and weakening consumer confidence on the other. With September’s Fed meeting ahead, markets remain on edge for the next decisive move.
Trade policy remained a key driver. President Donald Trump extended the US-China tariff truce for another 90 days but confirmed a 100% tariff on semiconductor imports and doubled tariffs on Indian goods to 50%. According to Bloomberg Economics, average US tariffs may rise to 15.2%, sharply higher than last year’s 2.3%.
Geopolitical risks also weighed on sentiment. Markets awaited the Trump-Putin summit in Alaska, though both Trump and Ukrainian President Zelenskiy downplayed expectations of progress toward ending the war in Ukraine.
Toward the week’s end, weaker US consumer sentiment added pressure. The University of Michigan index fell to 58.6, signaling rising inflation expectations and plans among 58% of households to cut spending. This reinforced fears of slowing economic momentum.
On the corporate side, earnings season was surprisingly strong. S&P 500 companies reported over 9% year-on-year profit growth in Q2, far above the 2.8% expected before the season. Roughly 82% of firms beat analysts’ estimates, marking the best season in four years.
Individual stock moves reflected this divergence. Tesla dropped nearly 1.5%, while UnitedHealth Group soared over 12% after filings revealed increased positions by Warren Buffett’s Berkshire Hathaway and David Tepper’s Appaloosa. Intel gained 2.7% amid reports of possible government participation via the Chips Act. In contrast, Applied Materials tumbled 14% after issuing weak guidance.
Bond markets mirrored the uncertainty. The 10-year Treasury yield fluctuated between 4.23% and 4.31%, balancing optimism about Fed cuts with inflationary risks.
Overall, the week reflected a tug-of-war between strong corporate earnings and expectations of monetary easing on one side, and the pressures of inflation, tariff escalation, and weakening consumer confidence on the other. With September’s Fed meeting ahead, markets remain on edge for the next decisive move.
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