Weekly Commentary (July 14, 2025) – Earnings & Tariffs in the Spotlight

Markets took a breather from their recent rallies and were down slightly across the board last week.

The DJIA slipped  1.01%, the S&P 500 edged  0.29%, the Nasdaq was flat at  0.07%, and the Russell 2000 lost  0.62%. International equities declined: MSCI EAFE  0.23%, MSCI EM  0.16%. The Bloomberg Aggregate fell  0.37%, while the 10 Year Treasury yield rose 8 bps to 4.43%. Gold eked higher rising 0.73%, reaching $3,356/oz, and Oil rose 2.16% to $68.45/bbl.

Last week’s market shifts reflected a balance of cautious optimism and rising headwinds. As corporate results roll in, several investment firms warned that Q2 earnings may fall short of Q1's momentum, with analysts expecting modest growth—around +4.8% year over year—slower than earlier estimates. Tariff uncertainty dominated headlines, with President Trump threatening a universal tariff increase—up to 50% on copper, 35% on Canada, and 30% on the EU/Mexico—before an August 1 deadline. Economists are debating whether markets have already “baked in” tariff risks, but Morgan Stanley cautions that the real economic drag may be felt in coming months.

Geopolitical developments also stirred sentiment. Trump announced shipment of Patriot missile systems to Ukraine, signaling a shift in stance that sparked renewed geopolitical and inflation scrutiny He’s also expected to make a “major statement” on Russia—and meet NATO’s secretary-general this week.

Looking ahead, the June CPI arrives July 15, with consensus expecting +0.3% MoM, an uptick likely influenced by tariffs. Core CPI y/y hovers near 3.0%, deepening the Fed’s dilemma: cut rates too soon, and inflation could prove to be even more stubborn; hold steady, and the economy (and equities) may stall. This critical inflation data joins a packed agenda—retail sales, PPI, industrial production, and a robust earnings calendar including JPM, Netflix, and Tesla. Stocks are “snoozing” into this pivotal week—but that may soon change.

This week’s earnings announcements and commentary, particularly from banks and big tech, could begin a test of market valuations. CPI and retail sales may shed some light on how tariffs are translating into consumer prices and the trade developments ahead of the August 1 tariff deadline will likely shape risk appetite.  This coming week includes 10 scheduled speaking engagements from the Fed (Governors and Presidents) and their commentary, alongside inflation metrics, will add more fodder for pundits shaping their outlooks for potential rate cuts.

Markets are navigating a complex interplay of moderating earnings, trade policy volatility, geopolitical shifts, and sticky inflation. Staying diversified is essential as investors position for both stabilization from incoming data and sudden volatility from tariffs or headline shocks.

“The best time to plant a tree was 20 years ago. The second-best time is now.” – Chinese Proverb