Equities Surge Despite Policy Pressures
Markets rebounded sharply last week, with the NASDAQ gaining 3.9%, the S&P 500 climbing 2.4%, and the Dow up 1.4%. This strong performance followed a prior-week selloff and was fueled by robust earnings across technology and consumer discretionary sectors.
Meanwhile, corporate earnings continued to surprise to the upside. With 90% of S&P 500 companies having reported, 82% exceeded analyst expectations, prompting upward revisions to overall earnings growth forecasts for the quarter.
Tariffs Introduce New Market Variables
The U.S. administration’s new round of reciprocal tariffs on imports from several countries took effect last week, with rates mostly ranging from 10% to 20%—though some reached 39%. A 100% tariff on semiconductors was also announced. However, exemptions for companies with domestic manufacturing could lower the effective impact.
These measures have the potential to influence corporate margins and consumer pricing dynamics in the months ahead.
Inflation & Sector Activity Offer Mixed Signals
Economic data showed conflicting signals across different areas of the economy:
-
The S&P U.S. Composite PMI reached a new annual high.
-
Meanwhile, the ISM Non-Manufacturing Index declined.
This divergence illustrates the challenge of interpreting economic strength at the sector level. Crude oil fell more than 5% on the week, while gold briefly reached a record high before slipping back. Bond yields ticked slightly higher, with the 10-year Treasury yield ending around 4.28%.
Strategic Implications
Here are three considerations for investors:
-
Earnings Continue to Drive Market Momentum
Strong quarterly results across sectors—particularly tech and consumer discretionary—are offering support for equity prices. However, the sustainability of this trend may depend on forward guidance and macroeconomic shifts.
-
Tariff Policy Could Influence Margins and Pricing
The implementation of tariffs and the magnitude of rate differences across sectors could create cost pressures. This is a development to watch closely across global supply chains and company earnings reports.
-
Mixed Service Data Suggests Uneven Growth
Conflicting signals between PMI readings call for careful interpretation of economic strength. Investors may want to observe how these trends affect business investment and employment metrics.
Final Thoughts
As Tony Parish observed:
“U.S. stocks climb a wall of worry to all-time highs.”
This week’s rally reflects investor willingness to look past near-term policy noise in favor of earnings and economic resilience. Still, elevated tariffs and mixed signals in service-sector activity suggest it may be too early to declare a clear direction for the second half of the year.
Now is a prudent time to revisit your strategy to ensure it aligns with evolving market dynamics and long-term objectives.
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of July 14, 2025. Please consult with a qualified financial professional for personalized advice.
August 11, 2025 Market Update: Earnings Rise, Tariffs Begin
Equities Surge Despite Policy Pressures
Markets rebounded sharply last week, with the NASDAQ gaining 3.9%, the S&P 500 climbing 2.4%, and the Dow up 1.4%. This strong performance followed a prior-week selloff and was fueled by robust earnings across technology and consumer discretionary sectors.
Meanwhile, corporate earnings continued to surprise to the upside. With 90% of S&P 500 companies having reported, 82% exceeded analyst expectations, prompting upward revisions to overall earnings growth forecasts for the quarter.
Tariffs Introduce New Market Variables
The U.S. administration’s new round of reciprocal tariffs on imports from several countries took effect last week, with rates mostly ranging from 10% to 20%—though some reached 39%. A 100% tariff on semiconductors was also announced. However, exemptions for companies with domestic manufacturing could lower the effective impact.
These measures have the potential to influence corporate margins and consumer pricing dynamics in the months ahead.
Inflation & Sector Activity Offer Mixed Signals
Economic data showed conflicting signals across different areas of the economy:
The S&P U.S. Composite PMI reached a new annual high.
Meanwhile, the ISM Non-Manufacturing Index declined.
This divergence illustrates the challenge of interpreting economic strength at the sector level. Crude oil fell more than 5% on the week, while gold briefly reached a record high before slipping back. Bond yields ticked slightly higher, with the 10-year Treasury yield ending around 4.28%.
Strategic Implications
Here are three considerations for investors:
Earnings Continue to Drive Market Momentum
Strong quarterly results across sectors—particularly tech and consumer discretionary—are offering support for equity prices. However, the sustainability of this trend may depend on forward guidance and macroeconomic shifts.
Tariff Policy Could Influence Margins and Pricing
The implementation of tariffs and the magnitude of rate differences across sectors could create cost pressures. This is a development to watch closely across global supply chains and company earnings reports.
Mixed Service Data Suggests Uneven Growth
Conflicting signals between PMI readings call for careful interpretation of economic strength. Investors may want to observe how these trends affect business investment and employment metrics.
Final Thoughts
As Tony Parish observed:
“U.S. stocks climb a wall of worry to all-time highs.”
This week’s rally reflects investor willingness to look past near-term policy noise in favor of earnings and economic resilience. Still, elevated tariffs and mixed signals in service-sector activity suggest it may be too early to declare a clear direction for the second half of the year.
Now is a prudent time to revisit your strategy to ensure it aligns with evolving market dynamics and long-term objectives.
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of July 14, 2025. Please consult with a qualified financial professional for personalized advice.