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Tech Resilience and Fed Uncertainty Keep Markets in Balance Thumbnail

Tech Resilience and Fed Uncertainty Keep Markets in Balance

Business Insights Investment Stock Market

Market Overview

U.S. stocks closed mixed last week, with technology names driving the S&P 500 (+0.61%) and Nasdaq (+1.51%) to modest gains, while the Dow (-0.05%) lagged. Growth sectors like Technology (+2.1%) outperformed, while Energy (-3.8%) and Health Care (-2.5%) weighed on returns. Global markets were divided, with European equities largely flat and Asian markets showing a risk-on tone led by solid earnings from Taiwan Semiconductor.

Corporate earnings kicked off with major U.S. banks—Citi, Wells Fargo, Bank of America, and Goldman Sachs—beating expectations. Tech enthusiasm was further boosted by NVIDIA’s license approval to export its H20 chips to China. Meanwhile, small caps (Russell 2000 +0.24%) and emerging markets (MSCI EM +1.70%) advanced modestly.

U.S. Treasury yields remained roughly flat, with the 10-year ending at 4.44%. Municipal bonds (-0.87% weekly) underperformed as global fiscal concerns weighed on sentiment. The dollar gained for the second consecutive week, while crude oil closed slightly lower despite geopolitical tensions.

Federal Reserve Insights and Economic Roundup

The Federal Reserve faces increasing pressure to cut interest rates amid calls from President Trump. However, June’s Consumer Price Index (CPI) rose 0.3% month-over-month, with annual inflation accelerating to 2.7%. Core inflation climbed to 2.9%, led by higher medical and recreational costs, tempering the case for immediate rate cuts.

Treasury markets are balancing the outlook of an uptick in inflation with potentially slower growth. Fed Chair Jerome Powell, whose term expires in May, remains committed to maintaining independence despite market rumors of political interference.

Retail sales rose sharply, signaling resilient consumer demand, while wholesale inflation cooled, reducing fears of a near-term slowdown. Global bond markets—especially in Japan and the U.K.—continued to influence U.S. yields as foreign demand for Treasuries weakened.

The Week Ahead

Key economic reports this week include:

  • Monday: Leading Index (June)
  • Tuesday: Philadelphia Fed Non-Manufacturing Activity, Richmond Fed Manufacturing Index (July)
  • Wednesday: MBA Mortgage Applications, Existing Home Sales (June)
  • Thursday: Initial Jobless Claims, S&P Global U.S. PMIs, New Home Sales (June)
  • Friday: Durable Goods Orders and Capital Goods Shipments (June preliminary)