The Week That Was, The Week Ahead: Macro & Markets, July 13, 2025

Business Insider

8 hours ago

Everything to Know about Macro and Markets
Stock indexes fell on Friday, reversing mid‑week gains and closing in the red, as the tariff theme came back to haunt investor sentiment. The S&P 500 (SPX) was down 0.31% for the week, while the Nasdaq-100 (NDX) declined by 0.38% and the Dow Jones Industrial Average (DJIA) dropped 1.02%.
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The S&P 500 and the tech-heavy Nasdaq100 hit record highs on Thursday, driven by Nvidia and other tech leaders, while the DJIA came close to its prior all-time high. However, Wall Street's positive momentum came under pressure Friday as tariffs once again became the hot topic of conversation and investor nervousness spiked ahead of the first act of the Q2 earnings season, set to begin this week.
Trade War Reloaded
President Trump imposed 35% tariffs on Canadian imports not covered under the U.S.-Mexico-Canada agreement (USMCA). Before that, the president announced new tariffs – ranging from 20% to 50% – on more than 20 trading partners, scheduled for August 1 unless trade deals are reached sooner. The 50% tariff on copper imports, announced earlier in the week, also kept investors worried about the prospect of rising prices for industrial products.
Another point of concern was the ongoing trade negotiations with the European Union, with markets hoping for an agreement after both sides signaled progress. However, the deal apparently fell through, with the president on Saturday announcing a 30% levy on all imports from the bloc, as well as on goods arriving from Mexico. In a preemptive warning, the president cautioned the levied countries not to retaliate, as that would trigger additional tit-for-tat increases on top of the 30% tariffs. Due to these developments, futures are flashing red for Monday's market open.
While the renewed tariff rhetoric pushed the indexes slightly down from their peaks, the reaction was incomparably milder than in April – and much weaker than any other subsequent trade-related dip since then. With the economy chugging along and large companies reporting better than expected earnings, the tariff theme has seemingly transformed into a 'new normal' of elevated trade anxiety, keeping a lid on otherwise exuberant stock market activity.
Meanwhile, the tariff windfall is already here, with the Treasury Department reporting a record $26.6 billion in customs duties collected in June, producing a surprise $27 billion budget surplus for the month. Treasury Secretary Scott Bessent recently stated that the U.S. could collect up to $300 billion in tariff revenue by the end of 2025 as Trump's trade policies take full effect. Economists expect tariff revenues to remain elevated for several years, with estimates ranging from $2.2 trillion to $2.8 trillion over the next decade if current policies persist. If that's the case, it could reduce federal borrowing, cap the rise in national debt, and help service existing interest obligations.
Profits, Rates and Risks
Investors are now awaiting the official opening of earnings season, with the focus on how Trump's tariff saga has affected major U.S. companies. At the moment, analysts don't expect large earnings growth outside of the tech sector, but the few names that have reported so far suggest forecasts may have been too conservative. With tariff headlines weighing on sentiment for much of Q2, analysts may have overestimated their negative short-term impact on the corporate sector. On the other hand, if results disappoint, it could call pricing into question – especially if analysts' estimates for Q3 and Q4 earnings don't rise.
Although tariffs have had limited impact on inflation thus far, that could change down the road. Thus far, the levies have mostly been absorbed by the supply chain or avoided through stockpiling ahead of implementation. If tariffs continue to ramp up, they will ultimately have to be passed on to consumers, as many industries don't have wide enough profit margins to fully absorb them. The extent to which consumers will bear the tariffs is uncertain because supply chain dynamics are complex – but it's safe to presume that inflation may drift slightly higher over the months ahead.
The Federal Reserve's June minutes showed policymakers are at odds about the inflation threat and the direction of monetary policy. Although the majority is leaning towards a continued 'wait and see' approach, some committee members are now open to cutting rates as soon as this month, while others don't anticipate cutting rates at all in 2025.
While the tariffs – at least at their announced levels – could have some stagflationary effects by depressing growth and driving up inflation, other factors could counter this. Most economists and analysts agree that the newly approved 'One Big Beautiful Bill' (OBBB) fiscal package would provide a modest boost to U.S. growth. While estimates vary, the baseline projection from the Congressional Budget Office (CBO) is that the OBBB will add an average of 0.5% to annual GDP growth over the next decade, with the largest boost – about 0.9% – coming next year. The growth would stem from deregulation, tax breaks, and business incentives, boosting jobs and investment. With the Fed eventually easing, the U.S. economy may see a meaningful boost in the next couple of years despite the tariffs.
Stocks That Made the News
▣ Nvidia (NVDA) saw its market cap rise above $4 trillion on Thursday, becoming the first company ever to reach this milestone. The company's valuation has surged amid investor enthusiasm for AI, increasing eightfold from about $500 billion in 2021. The AI poster child continued to climb on Friday, bucking the market trend and marking another all‑time high.
▣ PayPal (PYPL) shares dropped following reports that JPMorgan Chase (JPM) plans to begin charging financial technology companies for access to customer data. According to a Bloomberg report, JPM has sent pricing sheets to data aggregators – intermediaries connecting banks and fintechs – outlining new fees for access to customer account data. The fees vary by use case, with payment‑focused firms like PayPal facing higher charges. The move from the largest U.S. bank could disrupt the business models of payment apps that rely on free access to customer data to process transactions. Block, Visa, and Mastercard also saw their shares negatively affected by the report.
▣ Delta Air Lines (DAL) soared after reporting impressive earnings performance in Q2, provided a better-than-expected Q3 outlook, and raised dividends.
▣ Levi Strauss & Co (LEVI) was another winner last week, surging by over 12% as its second quarter revenue and earnings topped analyst expectations. The apparel company also lifted its full-year revenue and profit forecasts.
▣ Kraft Heinz (KHC) saw its shares jump at the end of the week on reports that the company is preparing a restructuring plan that could involve spinning off a significant portion of its grocery business. News of the potential break‑up of KHC came a day after cereal maker WK Kellogg (KLG) soared over 30% following its announced acquisition by Italian sweets company The Ferrero Group.
▣ Autodesk (ADSK) was among the worst‑performing stocks in the S&P 500 last week, dropping more than 11% after reports that the design software giant is exploring a potential acquisition of rival PTC, Inc. (PTC). PTC, which surged about 10% last week and now has a market cap of roughly $21.5 billion, has also attracted interest from other potential buyers. The negative investor reaction suggests concern over the financial implications of such a large acquisition for ADSK.
Upcoming Earnings and Dividend Announcements
The Q2 2025 earnings season is about to begin, with many notable releases scheduled for this week.
The season will officially open with reports from several of the largest U.S. financial and insurance companies: JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC), BlackRock (BLK), Bank of New York Mellon (BK), Bank of America (BAC), Goldman Sachs Group (GS), Morgan Stanley (MS), PNC Financial (PNC), Charles Schwab (SCHW), Progressive (PGR), Interactive Brokers (IBKR), Travelers Companies (TRV), and American Express (AXP).