T&Q Morning Briefing

U.S. equities closed out last week on a strong note, with the Nasdaq logging back-to-back record highs and the S&P 500 hovering just shy of its own peak. Gains were driven by megacap tech momentum, a stellar earnings season (82% beat rate in the S&P 500), and growing confidence that tariffs have yet to meaningfully dent corporate profits. Bond yields ticked higher, gold briefly touched new records before easing, and oil posted its steepest weekly loss since June.

This week’s spotlight is on Tuesday’s CPI release, where traders will be watching for early signs of tariff pass-through to consumer prices. Producer prices follow on Thursday, while retail sales on Friday will offer a reality check on consumer resilience amid a slowing labor market. Fed policy chatter continues after President Trump’s nomination of CEA Chair Miran to the Board, with futures markets pricing in nearly a 90% chance of a September cut. IPO activity also heats up with Bullish (BLSH) and Miami Int’l (MIAX) both set to price midweek.

The housing market is showing cracks as higher rates and stretched affordability push buyers to the sidelines, raising concerns about a broader economic drag. Meanwhile, semiconductor headlines dominated after the administration moved to take a 15% cut of Nvidia and AMD sales to China, a policy that could squeeze margins and unsettle global chip supply chains. Lithium stocks popped after CATL suspended operations at a key Chinese mine, hinting at supply constraints.

Corporate capital return is another theme. Stock buybacks remain aggressive despite stretched valuations, suggesting executives see limited downside in current market conditions. Traders are also digesting developments out of Asia, where a Hong Kong court ordered developer South City to liquidate, adding to concerns about China’s property market stability. Futures point higher ahead of CPI, with Bitcoin flirting with record territory.

Trade Winds & Global Shifts
President Trump surprised again on the foreign policy front, opting for a summit with Russia over new sanctions, even as Ukraine and European allies push back against Putin’s cease-fire proposal. U.S.–China relations are at a critical juncture, with a truce extension deadline approaching and markets bracing for tariff escalation if talks falter.

Goldman Sachs estimates U.S. consumers will bear the brunt of the latest tariff wave, potentially absorbing over $200 billion in annual costs. A Bloomberg tracker shows the breadth of Trump’s trade measures, underscoring the far-reaching impact on both large multinationals and small businesses, with the latter particularly vulnerable to margin compression.

D.C. in the Driver’s Seat
The FDA is in turmoil amid leadership shakeups, raising questions about regulatory timelines in the drug sector. At the Fed, dissenting voices are growing louder, with some policymakers pressing for faster rate cuts to counter economic headwinds. Political tensions are also building in Texas, where a redistricting battle between Governor Abbott and Democrats could shape the 2026 electoral map.

No major data scheduled for release today.

No notable earnings on the calendar.

 Asia: Nikkei 1.85%, Shanghai 0.34%
Europe: FTSE 0.22%, DAX -0.31%

Markets head into the week riding strong momentum, with tech leadership, resilient earnings, and optimism around trade talks fueling sentiment. We will see how that holds up this week with tariffs beginning to show up in corporate commentary, housing data softening, and the inflation picture tested by this week’s CPI and PPI reports. Rate cut expectations remain high, but confirmation from the Fed will depend on how inflation trends evolve. For now, the bias is still toward buying dips, but the market’s tolerance for disappointment may be lower than it appears.