T&Q Morning Briefing

Markets are running hot. Another round of record highs for the S&P 500 and Nasdaq has arrived on the back of Alphabet’s AI-fueled earnings and a growing list of tariff deals. However, the impact of the tariff is starting to emerge. With a 15% global baseline now in play and warnings of 50% levies ahead, corporate America is pivoting, and so are investors. As the August 1 deadline nears, the next few sessions will test whether this rally is truly broad or just top-heavy.

The T&Q Index has now climbed over 20% over the past month, pushing its total return since inception to 24.0%. That return? It means $100K turned into $121,400 in 30 days. That’s not just a number, it’s the kind of outperformance that builds momentum toward long-term wealth, not just market exposure. The next batch of picks drops this Sunday.

1. Corporate America Absorbs the Tariff Punch
The sixth U.S. trade deal was inked this week, this time with Japan, and reports suggest similar pacts with the EU and Korea may land before the August 1 deadline. Each follows a new model: a 15% baseline tariff and commitments to invest in the U.S. But while markets are celebrating reduced uncertainty, companies are quietly absorbing higher costs. General Motors said tariffs shaved $1.1B from Q2 profit. Vietnam’s government projects its exports to the U.S. could drop by a third. And Trump has made clear: 15% is the floor—some partners may see levies as high as 50%.

2. AI Is Still Driving the Bus
Alphabet’s results reignited the AI trade, citing “extreme” increases in capex tied to AI infrastructure. Semis and hyperscalers moved higher, though the tech rally remains increasingly concentrated. The “Mag-7” now comprise 33.4% of the S&P 500. As that weighting grows, so does fragility. Tesla’s disappointment, paired with weak results from IBM, showed that even bellwethers aren’t immune to rotation. Whether AI capex continues to mask tariff compression will be a critical second-half theme.

3. Labor Market Holds Firm (For Now)
Initial jobless claims fell to 217,000 last week, beating expectations. The 4-week average also improved, suggesting labor market resilience despite trade uncertainty. But continuing claims ticked up again, highlighting that those who do lose jobs are struggling to re-enter. While the Fed is unlikely to move rates at next week’s meeting, futures markets still imply nearly two 25-bps cuts before year-end. Powell is expected to acknowledge slowing growth—but refrain from pivoting just yet.

4. Sentiment Resilient, but Not Euphoric
Investor sentiment improved modestly this week, with the AAII bull-bear spread rising to +2.8. But bulls actually declined, while neutrals jumped, suggesting caution rather than mania. The NAAIM Exposure Index fell for the fourth straight week, though it remains elevated. That combination, strong price action with moderated positioning, helps explain why volatility remains low even as macro risks persist.

BONUS: Don’t miss what Intel’s CEO said that has the stock down 8.5% pre-market—one comment may have just shifted the whole turnaround timeline. Read the full story

Previous Trading Day Recap
The S&P 500 and Nasdaq both closed at fresh record highs Thursday, led by Alphabet’s strong Q2 results and continued AI-driven momentum. Alphabet reported a sharp rise in capital spending tied to AI infrastructure, lifting sentiment across semiconductors. Tesla’s weak numbers limited the tech rally, but financials and industrials helped broaden gains. Meanwhile, the Dow and Russell 2000 both closed lower, showing lingering softness outside the megacap complex.

The Nasdaq notched its 63rd straight day above its 20-day moving average—the longest streak since 1999. Treasury yields edged higher, with the 10-year finishing above 4.4% after strong labor data and firm PMIs. Gold slipped 0.7%, while oil rose modestly. The dollar traded mixed, and crypto continued to rebound on broader risk-on sentiment.

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Earnings 

Economic Data

With markets pressing to new highs, investors are betting that tariff clarity and AI demand can carry risk assets through summer. But as the costs of protectionism move from headline to income statement, margins and consumer pricing will come under pressure. The next stage of this rally may depend less on rate cuts and more on how well companies can adapt to this new trade regime.