Markets Shrug Off Trade Tensions as Earnings Season Kicks Into Gear
U.S. stocks finished relatively flat Monday at the closing bell as investors largely brushed aside President Donald Trump’s weekend announcement of new tariff threats against the European Union and Mexico. The Dow Jones Industrial Average edged up 0.2% to close at 44,459.65, while the S&P 500 gained 0.14% to 6,268.56. The tech-heavy Nasdaq Composite added 0.27% to finish at 20,640.33, securing another record close.
The market’s resilience came despite Trump’s Saturday announcement that the U.S. would impose 30% tariffs on goods from the EU and Mexico starting August 1. Investors appeared to bet that these duties will eventually be negotiated down as officials from both regions indicated they intend to continue talks with the Trump administration this month.
“The big question for markets in the coming weeks is if earnings, which are expected to be solid, can overshadow the tariff issues that are still there in the background,” said Glen Smith, chief investment officer of Texas-based GDS Wealth Management. “So far, the market has been able to withstand tariff headlines and is more focused on earnings and economic resiliency.”
Major Stock Movers at Today’s Market Close
Several notable stocks made significant moves today at the market close. Nvidia (NVDA), which recently became the first company to reach $4 trillion in market capitalization, slipped 0.52% to $164.07.
Palantir Technologies (PLTR) was among the day’s standouts, surging 4.96% to $149.15 as investors continued to bet on AI-focused companies.
In the financial sector, investors positioned themselves ahead of tomorrow’s bank earnings, with JPMorgan Chase (JPM) set to lead off a busy reporting week. The banking giant will be closely watched for insights into consumer spending, loan demand, and the broader economic outlook.
Fastenal (FAST), one of today’s early reporters, gained after posting better-than-expected second-quarter results. The industrial supplier reported revenue of $2.08 billion and earnings per share of $0.29, slightly topping analyst estimates.
Crypto Assets Continue Their Rally
Bitcoin surged above $123,000 for the first time today before settling back below $120,000 later in the session. The cryptocurrency’s rise came as investors greeted the open of Congress’s “Crypto Week,” with the House of Representatives weighing three key pieces of crypto-related legislation.
Crypto-related stocks benefited from this momentum, with MicroStrategy (MSTR) rising 3.7% after expanding its Bitcoin holdings, while Coinbase (COIN) gained 2.6% on strong trading volume.
Earnings Season Heats Up
Today marks the beginning of a crucial earnings season that will test whether corporate profits can justify current market valuations. After today’s close, several companies are reporting results, including FB Financial (FBK) with an expected EPS of $0.88, Simulations Plus (SLP) with projected earnings of $0.22 per share, and PetMed Express (PETS) with an anticipated EPS of $0.21.
The earnings calendar accelerates tomorrow with major banks including JPMorgan Chase delivering quarterly reports. Later in the week, investors will be watching for results from Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) on Wednesday.
One of the most anticipated reports this week will come from Netflix (NFLX) on Thursday after the market close. Analysts expect the streaming giant to report second quarter earnings of $7.18 per share on revenue of $11.16 billion, as the company continues to benefit from subscriber growth and recent price increases.
Economic Data and Fed Watch
Investors are also closely monitoring upcoming inflation readings this week, which will provide insights into how Trump’s existing tariffs are affecting the economy. The June CPI report, due Tuesday, will be particularly important as it feeds into expectations for the Federal Reserve’s interest rate decision in just over two weeks.
Adding another layer of complexity to the market outlook is the growing rift between the Trump administration and the Federal Reserve. On Sunday, National Economic Council Director Kevin Hassett told ABC News that Trump can fire Fed Chair Jerome Powell “if there’s cause,” a statement that raised eyebrows among market participants concerned about central bank independence.
Global Markets Mixed
Asian markets finished Monday with mixed results. Hong Kong’s Hang Seng Index added 0.26% to close at 24,203.32, while Japan’s Nikkei 225 lost 0.28% to end at 39,459.62. South Korea’s Kospi increased by 0.83% to 3,202.03, and Australia’s S&P/ASX 200 finished slightly lower at 8,570.4.
Looking Ahead: What Investors Should Watch
As markets navigate through a potentially volatile week, investors should keep an eye on several key developments:
1. The June CPI and PPI inflation reports will provide crucial data on price pressures
2. Bank earnings starting Tuesday will offer insights into the financial sector’s health
3. Progress in tariff negotiations with the EU and Mexico could ease market concerns
4. Cryptocurrency market movements may influence related stocks
5. Federal Reserve commentary in response to economic data and political pressure
Despite the various headwinds, U.S. stock indexes remain near their all-time highs, suggesting that investors continue to focus on strong corporate earnings and economic resilience rather than short-term political uncertainties. However, with high-stakes trade negotiations and important economic data on the horizon, market sentiment could shift quickly in the days ahead.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.