Dow Jones futures are set to begin trading on Sunday evening, alongside S&P 500 and Nasdaq futures. The market is attentive to President Trump’s renewed push for tariffs, which may heighten inflationary pressures. As earnings season heats up, major companies like JPMorgan Chase, Netflix, and Taiwan Semiconductor are in the spotlight. Inflation metrics and critical economic data will play a significant role in shaping market sentiment.
Last week, the stock market faced a pullback due to the uncertainty surrounding tariff increases, though it managed to remain close to recent highs. Many growth stocks, particularly in sectors like cybersecurity and speculative ventures, experienced notable declines.
### Market Overview
On Thursday, both the S&P 500 and Nasdaq reached record highs before retreating slightly through the week. The Dow Jones was down 1%, with the S&P shedding 0.3% and the Nasdaq dipping by about 0.1%. Small-cap stocks, reflected by the Russell 2000, slipped 1.3%. Despite this, AI-driven chipmakers showed resilience, with notable growth seen in the VanEck Vectors Semiconductor ETF, partly fueled by increased interest in AI technologies.
However, broader growth stocks hit turbulence, particularly the Innovator IBD 50 ETF, which fell 3.7% over the week. Names within cybersecurity and speculative growth segments faced significant downward pressure.
### Tariff Implications
The Trump administration has announced unilateral tariff increases set to take effect on August 1, mirroring previously halted “reciprocal” tariffs. Exceptions have been made for certain countries, such as Brazil and Canada, which will face considerable new rates. This move could amplify inflation further, as the 10-year Treasury yield climbed to 4.42% amid these developments.
### Sector Highlights
In the non-tech ETF space, the SPDR S&P Metals & Mining ETF surged 4.4%, marking its 14th consecutive weekly gain. Other sectors also posted impressive figures, with the U.S. Global Jets ETF up 9% and the SPDR S&P Homebuilders ETF increasing by 6.3%.
### Stocks to Watch
Several stocks are approaching potential buy points. Google is currently at a resistance level with a cup-and-handle formation, while Advanced Micro Devices is nearing its key buy point. Urban Outfitters, despite a slight drop, is positioned favorably after a recent earnings gap.
### Upcoming Earnings
The upcoming earnings reports from major firms like JPMorgan, Netflix, and Taiwan Semiconductor will likely have significant implications. Specifically, guidance from Taiwan Semiconductor regarding AI chip production could influence the entire sector.
### Economic Data
Investors should prepare for the release of key inflation data, including the Consumer Price Index and Producer Price Index, which may reveal the impact of tariffs on prices.
### Strategy Moving Forward
The current market rally has shown signs of both strength and vulnerability. As investors navigate this environment, it’s critical to stay observant of market trends rather than solely relying on predictions. Diversifying watchlists beyond just tech sectors could be beneficial, as many tech stocks have struggled lately. Preparing a game plan for potential exits and managing exposure will be vital as the market dynamics unfold.
Staying informed about market movements and leading stocks will equip investors to make timely decisions and adapt to changing conditions.
