Wall Street rebounded from the latest tariff news on Friday, driven by strong earnings and tame inflation data. The S&P 500 rose 0.59% for the week, led by gains in technology, utilities, and industrials. The Nasdaq outperformed, jumping 1.51%. Despite a slight decline in the Dow Jones Industrial Average, the overall market sentiment remains positive.
The June consumer price index (CPI) report was mixed, with the headline reading at 2.7% year-over-year, narrowly missing expectations. However, the core CPI, which strips out food and energy, rose 2.9%, exceeding expectations. The shelter cost index also increased by 3.8%, which is above the overall inflation rate but still below the previous 12-month period ending May 2025.
The Federal Reserve’s concerns about maintaining price stability are ongoing, as labor market dynamics remain favorable with an unemployment rate of 4.1%. The market expects the Fed to keep its benchmark lending rate steady at its late July meeting.
Inflation data also showed some positive signs, including a below-expectations producer price index (PPI) report. While the impact of tariffs is still being assessed, it appears manageable so far.
Other economic updates this week included better-than-expected industrial production and capacity utilization, lower-than-expected initial jobless claims, strong June retail sales, and slight beat on June housing starts. Earnings reports also provided support for the market, with Club earnings being overall positive despite some hits and misses. Wells Fargo shares recovered from a 5.5% decline after releasing better-than-expected results. BlackRock’s stock bounced back after missing revenue expectations but showing strong organic growth. Goldman Sachs reported very strong results, despite a tepid stock reaction. Abbott Labs beat earnings expectations but took an 8.5% dive in shares due to disappointing guidance.
Source: https://www.cnbc.com/2025/07/19/an-early-lesson-from-this-earnings-season-dont-judge-the-quarter-too-quickly.html