From the T&Q Desk
Good morning! Futures are pointing to a lower open after last week ended on a cautious note, with trade tensions once again casting a shadow over equities and bonds. The S&P 500 is just off record highs, while yields moved higher as traders digested fresh tariff threats on Canada, the EU, and Mexico. This week, the spotlight shifts to earnings, with major financials set to report. We’ll be watching closely to see how resilient corporate margins have been in the face of rising input costs, persistent policy uncertainty, and a reshuffling of global supply chains.
Crypto, meanwhile, continues its breakout. Bitcoin cleared $120,000 over the weekend, powered by ETF inflows and surging retail interest.
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Word Around the Street
Markets: Confidence Wavers as Trade Tensions Deepen
U.S. stocks slipped Friday to close out a turbulent week dominated by escalating trade tensions. The S&P 500 fell 0.3%, the Dow dropped 0.6%, and small caps sank more than 1%. Bond yields rose as investors priced in higher inflation expectations from incoming tariffs, steepening the yield curve.
President Trump announced a 35% tariff on Canadian goods and hinted at blanket 15–20% tariffs on other major trade partners.
The U.S. dollar rose modestly, helped by relative policy divergence and a rush to safety.
Commodities posted mixed results—gold surged 1.1%, oil rebounded, and silver reached its highest level since 2011.
Crypto strength continued: Bitcoin hit $118,832 Friday and topped $120,000 over the weekend, while Ethereum cleared $3,000 before paring gains.
Earnings optimism helped limit losses. Analysts now expect just 5% S&P earnings growth this quarter, well down from Q1’s 13%, but resilient considering the policy noise. Drone stocks rallied behind defense spending headlines, while FinTech names faltered on JPMorgan’s plan to charge platforms for access to bank data. Meanwhile, Nvidia is lobbying Western governments to fund sovereign AI infrastructure—a potential tailwind for chip demand if successful.
Geopolitics: Transatlantic Strains and Global Realignments
Trade relationships are under acute pressure. The EU signaled it may extend its suspension of counter-tariffs to allow further talks with the U.S., but warned Trump's latest 30% tariff threat risks collapsing transatlantic trade altogether. Canada has so far held a firm line, and Brazil, Vietnam, and Mexico are all in a holding pattern awaiting resolution.
China’s exports rose modestly in June, with the fragile U.S.–China ceasefire holding for now.
Japan’s government bond market showed signs of stress ahead of elections, as fiscal concerns rise.
Ukraine’s agricultural exports are once again under threat due to weather and frontline disruptions.
Across regions, there's growing concern that the global trade system is splintering into regional blocs. Tariffs, regulatory divergence, and resource nationalism are reinforcing this pattern. Yet, markets remain hopeful that key trade corridors will remain open—especially between the U.S. and its closest neighbors.
Domestic Politics: Spending Plans, Student Loans, and the Fed’s Fog
Trump’s student loan proposal made headlines over the weekend, with a partial forgiveness and vocational incentive structure that’s expected to cost less than originally feared. Meanwhile, spending from June’s tariff receipts pushed the federal budget into surplus last month.
FHFA Director Pulte sparked speculation about Jerome Powell’s future, suggesting a resignation may be imminent.
Fed officials, including Goolsbee, flagged tariff volatility as a complication in rate-setting.
Some in the administration are reportedly growing uneasy about the pace of market interventions and their inflationary implications.
Inflation data this week is expected to show modest upward pressure, but not enough to derail Fed easing expectations. Traders still see a September cut as possible, particularly if earnings or employment surprise to the downside.
Previous Trading Day Recap
Equities declined to close the week as the White House unveiled another round of tariff threats. Bond yields climbed, led by the 10-year, and the dollar strengthened modestly. Energy led the S&P 500, while materials and healthcare lagged. Bitcoin ended the day near $119,000. Oil rebounded sharply after a two-day decline, and silver continued its breakout.
S&P 500: -0.3%
Nasdaq: -0.08%
Dow: -1.02%
Gold: +1.13% to $3,364/oz
Oil: +2.8% to $68.45/bbl
Bitcoin: +3.5% to $118,832
Week Ahead: Earnings, CPI, and Tariff Timetables
Economic Calendar:
Monday: No major releases
Tuesday: CPI, Fed Speeches
Wednesday: PPI Final Demand, Industrial Production
Thursday: Retail Sales, Jobless Claims
Friday: Housing Starts, Building Permits, Existing Home Sales, Michigan Consumer Sentiment
Earnings Calendar Highlights:
Monday: Fastenal (FAST)
Tuesday: JPMorgan, BlackRock, Citigroup, Wells Fargo, Bank of NY Mellon, State Street, Omnicom
Wednesday: J&J, Bank of America, Morgan Stanley, Goldman Sachs, Prologis, PNC, Kinder Morgan
Overnight Markets
Asia: Nikkei -0.28%, Shanghai +0.27%
Europe: FTSE +0.42%, DAX -0.89%
US Pre-Market (As of 7:00 AM ET, July 14, 2025)
Final Take: Watching for Cracks in the Facade
Markets have shown remarkable composure in the face of rising tariff threats, but the pressure is building. This week marks the first real test of investor confidence as earnings season begins and inflation data lands. Traders are leaning into the belief that strong corporate results and softening price pressures will keep the rally intact. But with the White House accelerating tariff timelines and the Fed navigating conflicting signals, the margin for error is narrowing.