Lido Market Updates

14 July 2025

Monday Market Minute | 07.14.2025

By Candice Richardson, CFA, Investments & Analytics
Sergio Dueñas, CFA, Investments & Analytics
As of 7.11.25 | Source: Factset
As of 7.11.25 | Source: Factset

Market Update

The market ended slightly lower last week as President Trump intensified his trade offensive by announcing a flurry of modifications and potentially new tariffs across a range of countries and products.  Among the most notable developments were new 25% tariffs on goods from Japan and South Korea, and a sharp 50% tariff on Brazilian imports. Sector specific hikes also made headlines, including a 50% tariff on copper imports and the threat of pharmaceutical tariffs rising to as high as 200%. Despite these tariff headwinds, there are several tailwinds supporting the market such as return of the AI trade, fading geopolitical risks, and for now no big negative surprises in the economic data. However, the market breadth has been narrow. While the S&P 500 recently climbed to its new record high, the median stock is still trading 11% below its high.

Looking ahead, earnings season kicks off this week with major U.S. banks. Investors will be looking to determine what impact tariffs will have on margins going forward. On the economic calendar, Tuesday’s inflation report from the Bureau of Labor Statistics will be key in shaping market expectations for Fed policy through July. Retail sales data on Thursday will add another layer of insight into consumer spending and overall economic momentum.

 

Q1 Earnings

This week kicks off Q2 earnings season, with most of the major banks reporting this week. Expectations are for earnings growth to be 4.8% for the S&P 500, which would be the lowest earnings growth rate since Q4 2023 when it was 4%. Communication Services and Information Technology sectors are expected to lead the earnings growth, while Consumer Discretionary and Energy are expected to have negative earnings growth. Given that valuations are above their Pre-Liberation Day levels and there is still uncertainty on the tariff front, it’s likely that investors will heavily scrutinize earnings and guidance this quarter. Considering that some of the tariffs have been in place for a couple months now, we should begin to see the first-stage impact of the tariffs on corporate margins, sales, and capital expenditures.

 

 

Sources:  

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_071125.pdf

https://markets.jpmorgan.com/jpmm/research.article_page?action=open&doc=GPS-5027139-0

 

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