S&P500: Goldman Sees Mild Tariff Hit as US Stocks Slip Midday Today

Stocks Slip as Trump Confirms August Tariff Deadline

Stocks extended their Tuesday selloff after President Trump confirmed that new tariffs on 14 nations, including Japan and South Korea, will take effect on August 1 without extensions.

The S&P 500 traded slightly lower while the Nasdaq held near flat, and the Dow lost 99 points, or 0.2%, as traders assessed the near-term hit from fresh trade tensions.

Is Trump’s Tariff Stance Getting Firmer?

Trump’s Truth Social post on Tuesday stated, “all money will be due and payable starting AUGUST 1, 2025 – No extensions will be granted,” tightening Monday’s softer remarks that hinted at flexibility.

The 25% tariffs will target key trade partners such as South Korea and Japan alongside at least 12 others.

While Monday’s initial announcement triggered a 400-point Dow drop, Tuesday’s decline moderated as traders weighed whether the broader impact on growth and earnings would be as severe as past trade disputes.

U.S. Bank Wealth Management’s Bill Merz noted that markets appear less reactive to tariff threats than in previous cycles.

Are Banks Dragging Down Sector Performance?

Financial stocks were the weakest performers Tuesday after HSBC adopted a cautious outlook on larger U.S. banks.

JPMorgan and Bank of America both fell 3%, while Goldman Sachs declined 2%.

The weakness contrasted with relative resilience in tech, where Nvidia gained 0.6%, closing in on a $4 trillion market cap, and Tesla rebounded 3% following Monday’s 6.1% slide.

What Do Inflation Expectations Tell Us?

The New York Fed’s June consumer survey showed one-year inflation expectations easing to 3%, back to January levels before tariff concerns reemerged.

This marked a decline from March and April peaks of 3.6%, although consumers still expect notable increases in energy, rent, and education costs.

The data may help anchor rate cut hopes as the Fed continues to track inflation pressures.

Why Are Wall Street Firms Raising S&P 500 Targets?

Despite tariff concerns, Bank of America and Goldman Sachs raised their year-end S&P 500 targets, with BofA lifting its forecast to 6,300 from 5,600 and Goldman increasing to 6,600 from 6,100.

Firms cited resilient earnings and limited tariff pass-through reflected in recent inflation prints and corporate surveys.

Oppenheimer Asset Management continues to favor cyclical sectors, including technology, consumer discretionary, and financials, anticipating solid earnings momentum as monetary policy headwinds ease.

What’s Next for the Market?

Goldman Sachs expects tariff implementation to unfold gradually as large-cap firms manage inventory buffers, limiting immediate margin pressures.

While Wolfe Research highlighted potential near-term risks to profit margins, the consensus view suggests markets have largely priced in tariff impacts.

Softer recent economic data has strengthened expectations for Fed rate cuts, potentially supporting equities as the rally shows signs of broadening beyond mega-cap tech.

More Information in our Economic Calendar.