U.S. stocks ended Friday on a mixed note, with the S&P 500 closing flat amid renewed trade tensions with Europe. Despite the muted session, the benchmark index posted a gain for the week.
By the closing bell, the Dow Jones Industrial Average fell 142 points (0.3%), the S&P 500 was virtually unchanged, and the NASDAQ Composite ticked up 0.1%.
Market sentiment took a hit after the Financial Times reported that President Donald Trump is considering tariffs of 15% to 20% on goods imported from the European Union. The proposed levy—well above the 10% the EU had hoped for—suggests trade negotiations may have stalled. With the August 1 deadline fast approaching, the move appears designed to pressure the EU into making broader concessions.
Earnings Season Gathers Momentum
Investors continue to digest second-quarter earnings, which have been largely better than expected so far:
- American Express (AXP) climbed after the credit card company beat profit estimates, fueled by strong spending from high-income consumers.
- 3M (MMM) rose after raising its full-year earnings outlook, benefiting from cost-cutting efforts and a shift toward higher-margin products.
- Charles Schwab (SCHW) advanced after reporting strong quarterly results driven by asset growth and improved net interest margins.
- Netflix (NFLX) delivered solid earnings and raised its revenue guidance for the year, but shares pulled back slightly as results fell short of sky-high analyst expectations. Even so, Netflix stock is up over 43% year-to-date, supported by confidence in its dominance in the streaming sector.
Looking ahead, the earnings calendar remains busy next week, with reports expected from Coca-Cola (KO), Texas Instruments (TXN), Alphabet (GOOGL), and Tesla (TSLA).
Consumer Sentiment Improves as Inflation Expectations Ease
The University of Michigan’s consumer sentiment index rose to 61.8, slightly above expectations of 61.5. One-year inflation expectations dropped to 4.4%, down from 5.0% previously—an encouraging sign for consumers and policymakers.
Recent economic data has shown resilience: retail sales beat forecasts, weekly jobless claims declined, and June inflation remained largely in line with estimates. However, tariffs are beginning to put upward pressure on select consumer goods.
Amid these developments, the Federal Reserve has adopted a cautious, wait-and-see stance. Still, Fed Governor Christopher Waller said Thursday that a rate cut at the Fed’s next meeting could be warranted, citing growing risks to the economy.
Waller also emphasized that the recent inflation uptick driven by tariffs is likely temporary and shouldn’t alter the Fed’s broader policy outlook.
Meanwhile, President Trump continues to push the Fed to act more aggressively in lowering interest rates to support economic growth.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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