Key Focus This Week “ U.S. Stocks Enter Peak Earnings Season with Major Banks Leading; Inflation Data and Tariff Policies in the Spotlight”
The U.S. second-quarter earnings season officially kicks off this week, with several major banks set to report results. These earnings will attract significant market attention, especially as many banks recently passed Federal Reserve stress tests and issued cautious outlooks.
In the tech and pharmaceutical sectors, Taiwan Semiconductor Manufacturing Company (TSMC) and Netflix are scheduled to release quarterly earnings on Thursday. TSMC reported a 40% revenue increase in the first half of the year, driven by strong demand for artificial intelligence, while Netflix posted 12% sales growth in the prior quarter. Other notable companies to watch include Johnson & Johnson (JNJ), Novartis (NVS), GE Aerospace (GE), and PepsiCo (PEP).
On the macroeconomic front, the June Consumer Price Index (CPI) will be released Tuesday, with the previous reading at an annualized 2.4%. Markets will closely watch inflation trends as they consider the Federal Reserve’s interest rate decision later this month. June retail sales data, set for release on Thursday, will also be closely monitored after May’s decline due to consumers pulling back following tariff-driven early purchases. Additionally, the homebuilder confidence survey (Thursday) and June housing starts data (Friday) will provide further insight into the housing market.
Last week, U.S. stocks closed slightly below record highs. Over the weekend, President Trump threatened to impose high tariffs on more countries. Investors are betting that these tariffs will ultimately be reduced through negotiations. Overall, the market remains optimistic as the second-quarter earnings season reaches its peak this week.
Last Week’s Key Economic Data & News Recap
Trump Announces 50% Tariffs on Imported Copper and Brazilian Goods Starting August 1, Threatens Trade Policy Changes with Multiple Countries
Trump announced a 50% tariff on imported copper and Brazilian goods starting August 1, threatening trade policy changes with multiple countries. He warned Brazil to stop the trial of former President Bolsonaro or face heavy tariffs; Brazil said it will respond with reciprocal measures. Trump has also notified several other countries of tariff adjustments, all set to take effect on August 1.
Trump Announces 30% Tariffs on EU and Mexico Starting August 1
Trump announced that starting August 1, the U.S. will impose an additional 30% tariff on imports from the EU and Mexico. EU and Mexican leaders plan to continue talks to lower the tariffs.
The 30% tariff is separate from existing tariffs, meaning the total car tariff on EU goods will rise to 57.5%. This new threat adds uncertainty to U.S.-EU trade, which totaled $975.9 billion last year.
U.S. Initial Jobless Claims Fall to Two-Month Low, Decline for Fourth Consecutive Week
The U.S. Department of Labor reported that initial jobless claims fell for the fourth consecutive week last week, reaching the lowest level in two months, covering the Independence Day holiday period.
For the week ending July 5, initial claims decreased by 5,000 to 227,000, below the Bloomberg economist survey median estimate of 235,000.
However, continuing jobless claims rose to 1.97 million the prior week, the highest level since the end of 2021, matching economists’ median expectations according to Bloomberg.
Federal Reserve Minutes: Majority See Rate Cuts Likely, but Disagreement on Number of Cuts
The minutes from the June 17-18 Federal Reserve meeting released last Wednesday show policymakers remain cautious about future rate changes. At the meeting’s end, the Federal Open Market Committee (FOMC) unanimously voted to keep the key lending rate steady at 4.25% to 4.5%, a level unchanged since December 2024.
The dot plot released after the meeting showed that out of 19 officials, 10 expect at least two rate cuts by year-end, while 7 predict no cuts this year, and 2 expect only one cut.
However, the minutes also highlight growing disagreement on the future policy path. The majority of participants believed it may be appropriate to lower the federal funds rate target range this year. Officials view tariff-driven inflation pressures as “transitory and mild” and expect economic growth and employment to weaken.
During the meeting, officials updated their rate cut expectations to two cuts this year and three more in the following years. Yet, the dot plot reflecting individual views reveals differing opinions on the extent of rate cuts.
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TRENDS IN INDICES
Canadian Equities:
Last week, Canadian stocks dropped as trade tensions rose and employment data was stronger than expected. The S&P/TSX Composite Index closed at 27,023 points, down 13 points for the week, ending a two-week gain.
Statistics Canada reported 83,000 new jobs in June, lowering the unemployment rate to 6.9%, the first drop since January. Most job gains were in part-time and retail, especially among people aged 25 to 54.
Source: Yahoo Finance
Source: Yahoo Finance
Source: Yahoo Finance
U.S. Equities:
Last week, the three major U.S. stock indexes all posted losses. President Trump announced a 35% tariff on imports from Canada and threatened uniform tariffs of 15% or 20% on most other countries, fueling market risk aversion.
The Russell 2000 small-cap index underperformed, falling 0.63% last week, while the tech giants showed resilience.
The S&P 500 closed at 6,259.75, down 0.31% for the week. The Dow Jones Industrial Average ended at 44,371.51, down 1.02%. The Nasdaq Composite closed at 20,585.53, down 0.08%, and the Nasdaq 100 declined 0.21%, accumulating a 0.38% loss for the week.
Source: Yahoo Finance
U.S. Bonds:
Last Week, U.S. 10-Year Treasury Yield Closed at 4.41%, Up 6.36 Basis Points; 2-Year Yield at 3.89%, Up 0.5 Basis Points.
Source: Yahoo Finance
Forex Market：
The US Dollar Index rose to 97.85, set to end a two-week decline with a weekly gain. The dollar gained 0.79% against the Japanese yen, closing at 147.4 yen, marking its largest weekly rise since early December with nearly a 2% increase.
The Canadian dollar came under pressure from new US tariffs but was partially supported by strong employment data. The USD/CAD pair rose 0.64% to 1.369, reaching an intraday high of 1.373.
The British pound fell for the eighth consecutive week, hitting an eight-month low as the UK economy contracted for the second month in a row. GBP/USD dropped 1.16% to 1.35 last week.
Source: Yahoo Finance
Gold Market:
Gold prices gained 0.62% last week, closing at $3,355.7 per ounce. Following President Trump’s latest tariff announcements, investors sought safe-haven assets. Silver prices surged 3.98% for the week, closing at $38.46 per ounce, reaching a 13-year high.
Source: Yahoo Finance
Oil Market:
Brent crude futures increased by 3% last week, closing at $70.36 per barrel. U.S. crude futures rose about 2.2%, settling at $68.45 per barrel. Investors focused on U.S. tariff developments, potential further sanctions on Russia, and the International Energy Agency’s (IEA) warning that the market is tighter than it appears.
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Financial Market Data Copyright © 2025 AimStar myportfolio. Data as of July 14, 2025, 12:30 PM EST
WHAT'S HAPPENING THIS WEEK
July 14 (Monday)
- Key Earnings: Fastenal (FAST)
July 15 (Tuesday)
- US Data: June Consumer Price Index (CPI), July New York Fed Manufacturing Index
- Fed Speakers: Lorie Logan, Michelle Bowman, Michael Barr
- Key Earnings: JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), BlackRock (BLK), BNY Mellon (BK), State Street (STT), Ericsson (ERIC), J.B. Hunt (JBHT), Albertsons (ACI)
July 16 (Wednesday)
- US Data: June Producer Price Index (PPI), June Industrial Production & Capacity Utilization, Fed Beige Book
- Fed Speaker: John Williams (New York Fed President)
- Key Earnings: Johnson & Johnson (JNJ), Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), Progressive (PGR), United Airlines (UAL), Alcoa (AA)
July 17 (Thursday)
- US Data: June Retail Sales, June Import/Export Price Index, July Philadelphia Fed Manufacturing Index, July Homebuilder Confidence, May Business Inventories, Initial Jobless Claims (week ending July 12)
- Key Earnings: TSMC, Netflix, GE Aerospace, Novartis, Abbott Laboratories (ABT), PepsiCo, Travelers (TRV)
July 18 (Friday)
- US Data: June Housing Starts, July Consumer Sentiment (preliminary)
- Key Earnings: American Express (AXP), 3M (MMM), Truist Financial (TFC)
Author by: Mark Ma
Edited & Published by: Sarah San
July 14 , 2025 13:00 AM EST. 10 min read
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