That leaves investors still on-edge as they look ahead to important bank earnings and inflation data this week. It’s the primary provider Bank of America, Goldman Sachs and Morgan Stanley all scheduled to release second quarter financials Wednesday. Market participants will be watching their performance very closely. They want to better understand how healthy the financial sector is and what that means for the economy as a whole.
The stocks on Monday, when the Dow Jones Industrial Average jumped 88 points, or 0.2%. During this same period, the broader S&P 500 index managed an impressive gain of just 0.1%. The tech-heavy Nasdaq Composite finished higher, rising about 0.3%. The futures for the Dow Jones Industrial Average were down 50 points, or 0.12%. This decline reflects a mixed outlook as investors prepare for third-quarter earnings reports.
FactSet Analysts are currently predicting the S&P 500 will have a blended earnings growth rate of 4.3% year-over-year. For this outlook, we adopted a cautiously optimistic view going into second-quarter earnings season. Yet even with the prevailing highs, expectations are still low amid many analysts looking for clearer signals of improving corporate profitability.
Right before earnings, tomorrow’s consumer price index (CPI) report is released. Analysts are looking for a 0.3% month over month rise, which will bring the headline reading up to 2.7%. This data will offer valuable clues about the trend of inflation that may shape up monetary policy response and market dynamics in the future.
Dan Greenhaus, chief strategist at Solus Alternative Asset Management, told The Hill that the current economic landscape — especially when it comes to tariffs — is “unprecedented.”
“You’re at the point where the president is talking again about higher tariff rates. That’s going to take the effective tariff rate up even higher than we currently anticipated to be.” – Dan Greenhaus, chief strategist at Solus Alternative Asset Management.
Recently, President Donald Trump threatened a similar measure — a 30% tariff on the European Union and Mexico — beginning August 1th. These threats have contributed to fears of a reacceleration in inflationary pressures. The effects of these tariffs on inflation are still playing out. They’re asking some key questions about the future of our economic landscape.
The market was fundamentally faced with unknowns at the moment. Consequently, investors are eagerly awaiting bank earnings and inflation data for clues about the trajectory of economic growth and a potential pivot in monetary policy. With these factors highlighted, the forthcoming reports have the potential to greatly shift market sentiment and investment strategies as we move throughout the year.