Markets Hold Firm Mid-Session as Traders Discount Tariff Talk and Eye Earnings
U.S. stocks were flat to slightly higher 90 minutes into Monday’s session, with the Dow hovering just above the unchanged mark. Traders appeared to shrug off tariff threats from President Trump over the weekend, instead focusing on corporate earnings and upcoming inflation data for direction.
Will Tariff Threats Materialize or Fizzle Out?
President Trump’s weekend announcement of a 30% tariff on imports from the European Union and Mexico sparked initial concern. However, the muted equity reaction suggests traders are betting on a negotiated compromise before the tariffs take effect August 1. Both the EU and Mexican governments signaled ongoing dialogue with the White House, further easing fears of an immediate escalation.
Fed Friction Returns to the Forefront
White House officials raised eyebrows by revisiting criticism of Fed Chair Jerome Powell, with comments suggesting the president could remove him “if there’s cause.” The administration is also reportedly reviewing renovation costs at the Fed’s headquarters. While the central bank has defended its independence, the political pressure adds another layer of uncertainty for traders watching interest rate policy and economic stewardship.
Which Sectors Are Driving Mid-Session Action?
Financials and consumer discretionary names were among the session’s early leaders. JPMorgan and other major banks were stable ahead of earnings, while select industrial names showed modest strength. On the flip side, energy and technology lagged. Chevron and Apple both traded lower, with tech pulling back after recent strength. Salesforce and Visa helped offset losses on the Dow.
The energy sector was down over 1%, pressured by lower oil prices and profit-taking. Technology stocks slipped modestly, while real estate and industrials showed pockets of buying.
What Are Traders Watching Next?
With second-quarter earnings kicking off this week, attention turns to corporate results and forward guidance. JPMorgan reports Tuesday, setting the tone for the financial sector. Traders are also awaiting fresh inflation data, including CPI and retail sales, due later this week. These reports will help clarify the strength of the consumer and the path of future Fed policy.
Market Outlook: Sideways Until Catalysts Arrive
Markets are trading in a tight range, with earnings and macro data expected to provide the next real directional cue. As long as trade talks remain constructive and earnings hold up, the market could grind higher. However, further political disruption involving the Fed or surprises in inflation could spark short-term volatility. Traders should stay focused on sector rotation and upcoming bank reports.
More Information in our Economic Calendar.
