MARKET COMMENTARY
Markets cooled this week as investor sentiment wavered amid mixed earnings, rising bond yields, and renewed concerns over tariffs and U.S. fiscal health. The S&P 500 lost momentum after six straight gains, while tech stocks led declines. Moody’s downgrade of the U.S. credit outlook added pressure, and Treasury yields climbed, with the 10-year topping 4.5% on worries about long-term government debt sustainability.
Tariffs remained a key focus, with retailers split on the impact. Walmart warned of price hikes, prompting backlash from President Trump, while Home Depot said it would hold prices steady by shifting supply chains out of China. Target, Lowe’s, and TJX are set to report next, offering more insight into the consumer landscape. Though inflation has yet to spike, economists expect tariffs to drive price pressures later this year. JPMorgan CEO Jamie Dimon warned markets could slump as companies absorb rising costs.
Earnings and deal activity showed signs of life, with the rally broadening beyond mega-cap tech. The S&P Equal Weight Index climbed roughly 13% over the past month, though lagging sectors like energy and freight suggest uneven economic traction. M&A deals involving Dick’s Sporting Goods and Charter Communications boosted financial stocks, while China’s central bank and Australia’s central bank cut rates to cushion against global trade headwinds. Overall, investors are recalibrating as strong earnings and global stimulus are weighed against policy uncertainty, rising rates, and potential inflationary shocks.
Economic Releases This Week
Monday: New York Fed Speaks, Fed Vice Chair Jefferson Speaks, US Leading Economic Indicators
Tuesday: Richmond Fed Speaks, St. Louis Fed Speaks, Federal Reserve Governor Speaks
Wednesday: 20 Year Bond Auction, MBA Mortgage Applications, MBA Purchase Index
Thursday: Initial Jobless Claims, S&P Flash US Services & Manufacturing PMI, Existing Home Sales, New York Fed Speaks
Friday: Kansas City Fed Speaks, New Home Sales, Building Permits, Fed Governor Cook Speaks
Stories to Start the Week
Home Depot Plans to Keep Prices Steady Despite Tariffs
Austin’s Reign as a Tech Hub Might Be Coming to an End
EU, Britain Go Ahead With New Russia Sanctions Without Waiting For Trump
Israeli Strikes Kills Dozens in Gaza As Criticism of Israel Grows
JP Morgan Chase CEO Jamie Dimon Says Recession Is Still On The Table for US