When the market is tiptoeing at historical highs, any loud word from Washington sounds like a clap in a theatrical pause. This week, the clap was another tariff ultimatum from President Trump: in the deal with the European Union — 'no less than 15-20%', preferably by August 1. Think about it: while politicians haggle over numbers, the S&P 500 and Nasdaq continue to balance at record levels, as if marking this down in the calendar as another 'negotiation noise'. Investors seem to decide: while there's no signature — there's no panic. But the closer the deadline approaches, the more expensive this faith in a happy ending will become.
The Dow Jones had to lag behind the celebration: the negative dynamics of certain components like American Express cooled the index, reminding us that the old industrial-financial world reacts to tariff threats faster than high-margin digital giants. The contrast with Nasdaq highlights the current demand structure: growth, predictability, and network effects are being bought, while cyclical sensitivity is approached with caution.
Earnings season has added special effects. Netflix once again exceeded revenue and profit expectations — and received a minus for high expectations: the market is looking for not so much past 'beats' but the trajectory of subscribers, monetization, and how much more ARPU can be squeezed without irritating the audience. On the other end — Charles Schwab: strong results and a rise in quotes because stable client assets and interest margins are almost a romance of predictability today. Chevron carefully finalized a long-suffering deal with Hess for $53 billion: a checkmark on the risk list, the uncertainty premium has shrunk, and the oil and gas giant has strengthened its bet on Guyana. American Express — record revenue, but the stock down: the market reads the fine print in expenses and the quality of customer turnover. Meanwhile, in the background, taking advantage of the general hustle, American Tower quietly updated its 10-week high — mobile infrastructure does not need loud press releases to remind of its 'landlord' nature.
The macro environment played in favor of the 'warm blanket' of markets. Prices in the US are behaving softer than forecasts (both CPI and PPI gave cause to breathe out), retail sales confirmed that the consumer has not yet gone underground. The University of Michigan noted a rise in consumer sentiment to a 5-month high, while inflation expectations — both for the year and the five-year — are declining. This is the perfect mix for those dreaming of a 'Goldilocks' scenario: the economy is not breaking, inflation is sliding, and theoretically, the Fed could soften its stance without waiting for cracks in employment. Theoretically — because the futures market hardly believes in a decrease already in July.
And here enters Fed Governor Christopher Waller, who is ready, according to him, to support a July cut and even express disagreement if the committee decides to pause. The market brushes it off: the probability in current prices is almost zero. The gap between the rhetoric of individual officials and market pricing is potential fuel for sharp movements in yields and the dollar. For now, 10-year Treasuries have smoothly slid to ~4.4%, reflecting a balance: disinflationary data against political noise and still a robust economy.
The dollar gave way by the end of the week, but did not surrender: the daily pullback on soft comments coincides with a second consecutive weekly gain amid strong macro data and skepticism about the Fed's imminent easing. This is a case where 'weak today' does not mean 'weak trend-wise': as soon as tariff rhetoric turns into practice — demand for the dollar as a safe asset may return faster than you can refresh your feed.
Housing data for June showed a neat rebound: Housing Starts +4.6% m/m thanks to multi-family units, while permits edged slightly up. This is not a new construction wave, but rather stabilization after a fall; mortgage rates and housing affordability are still keeping the sector on a short leash. Nevertheless, even flat dynamics here is a plus to the overall narrative of 'the economy is alive'.
Moving forward — a busy week starting from July 21. Heavyweights enter the reporting stream: Alphabet, Tesla, Verizon, Coca-Cola, T-Mobile, IBM, and others. Macro data will add variables: preliminary PMIs, durable goods orders, housing sales (both existing and new). On the global stage — decisions from the ECB, the Central Bank of Russia, and the Central Bank of Turkey, plus a whole range of business sentiment indicators in Europe and Asia. And let’s not forget the elections for the upper house of Japan’s parliament: any political milestone there can indirectly affect flows into Treasuries and the dollar through expectations for JGB yields.
For the crypto markets, this whole story is important not only through the sentiment in risk assets. The tariff noise and potential disinflation amid soft Fed policy are a cocktail that investors often use as a reason to diversify into 'digital gold' (BTC) and dollar on-chain substitutes (stablecoins), especially if volatility in traditional indices is rising. As long as stocks hold, but the louder the negotiation rhetoric gets and the closer the tariff deadline, the higher the likelihood that some capital will move 'outside the fiat funnel' — at least temporarily.
So, we have a market that looks at tariff threats and shrugs its shoulders while the macro environment allows dreaming of a soft Fed rate cut later in the year. If this double hope — for a reasonable outcome of negotiations and smooth disinflation — withstands the test of the upcoming week of data and reports, the bullish momentum may continue. If not, we will quickly learn how fragile those 'record' levels were. For investors, including the Binance crypto community, the main lesson is simple: now is not the time for blind 'passive' optimism; it's time for selective risk, hedging discipline, and careful reading of the fine print in trade negotiations.