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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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 EU, 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.
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.
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.
Four Economic Events
Here are four key economic events that could affect your portfolio this week. For a full listing of additional economic reports, check out the TipRanks Economic Calendar.
» June CPI and CPI ex. Food and Energy (Core CPI) – Tuesday, 07/15 – The Consumer Price Index (CPI) is one of two key measures of inflation (the other being the Personal Consumption Expenditures index, or PCE). Policymakers, businesses, and consumers closely monitor the CPI, as it reflects price trends across the economy, shapes consumer spending and business sentiment, and directly influences the Federal Reserve’s interest rate decisions.
» June Producer Price Index (PPI) and PPI ex. Food and Energy – Wednesday, 07/16 – This report reflects input costs for producers and manufacturers. Since the PPI measures the cost of producing consumer goods – which ultimately affects retail prices – it is viewed as a leading indicator of inflationary pressures. As such, it often foreshadows the following month’s CPI and plays a critical role in shaping inflation expectations among policymakers.
» June Retail Sales – Thursday, 07/17 – This report measures how much consumers are spending on durable and non-durable goods. Retail Sales is a leading indicator of economic health, offering insight into the current quarter’s growth and the inflationary pressures stemming from consumer demand.
» July Michigan Consumer Sentiment Index and UoM 5-year Inflation Expectations (preliminary) – Friday, 07/18 – These reports summarize the findings of a monthly survey measuring consumer confidence and long-term inflation expectations in the U.S. Consumer confidence directly affects spending, which accounts for roughly 70% of U.S. GDP. The inflation expectations component is also factored into the Federal Reserve’s Index of Inflation Expectations.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.