The global economy is being driven by a historic increase in trade tariffs, and so far, it seems to be holding up better than many expected. Almost four months have passed since the 'Liberation Day' tariffs announced by President Trump, and trade, production, and growth indicators have proven surprisingly resilient. However, the coming days will test this optimism.
Heavy Corporate Earnings Season
This Tuesday, big names are releasing (or have already released) their numbers, which will help calibrate investor sentiment amid tariff negotiations and growing criticism of the Federal Reserve.
And the week heats up even more: over 100 companies in the S&P 500 report. Tomorrow, Alphabet and Tesla kick off among the so-called 'Seven Magnificent,' which could impact not only technology but the overall risk sentiment.
Why does it matter? Strong results signal that companies are navigating the cost and tariff environment without collapsing margins, which reinforces the thesis of global resilience. Weak results could reignite fears of a slowdown.
Fed in Focus: Powell Speaks (But Not Much)
Federal Reserve Chairman Jerome Powell is participating today in a regulatory conference. As the Fed is in a silent period before next week's meeting, no direct comments on monetary policy are expected. Still, tone, body language, and any indirect hints are always scrutinized by the markets.
Political Pressure Growing
On Monday, Treasury Secretary Scott Bessent suggested that the Fed should review its operations, including the controversial (and costly) renewal of its headquarters. This issue has become ammunition in the political dispute: the project has been used by President Trump to publicly criticize and undermine Powell.
Tariff Countdown: August 1st
Investors are also closely monitoring the tariff deadline of August 1st. According to White House Press Secretary Karoline Leavitt, the government may:
Send new tariff letters;
Or close trade agreements before the deadline.
Any signal on this front could affect sectors exposed to import/export and the perception of global growth.
And the Markets Today?
Stock futures started Tuesday more subdued, after days when optimistic results pushed indices to new records (including on Monday). This 'breather' suggests that traders want to see more data before increasing risk.
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