Weekly Market Insights | Mixed Stocks; Inflation and Consumers Adjust

Stocks were mixed last week, battling through tariff talk while responding to upbeat quarterly corporate reports and a trove of updates on the economy.

The Standard & Poor’s 500 Index rose 0.59 percent, while the Nasdaq Composite Index added 1.51 percent. The Dow Jones Industrial Average decreased 0.07 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, skidded 0.46 percent.^1,2

Economic News

All three major market averages posted modest gains to start the week as investors appeared to shrug off tough talk on trade from the White House over the weekend.³

Stocks mostly fell after news that inflation warmed up a bit last month, albeit in line with economists’ expectations. A narrow, chip-led rally developed after Nvidia, a mega-cap chipmaker, said it received assurances from the White House of its ability to sell products in China, pushing the Nasdaq modestly higher.⁴

Stocks continued their climb over the next session following news that consumer spending rebounded last month as trade talk slowed. The S&P 500 posted another record close amid several companies beating expectations as they reported quarterly financials.^5,6

Markets traded slightly lower on Friday despite news that consumer sentiment rose last month. The consumer sentiment report also showed a drop in concerns about tariff-induced inflation.⁷

Splitting the Difference

Two themes developed with fresh economic data released last week: inflation and consumers. First, June inflation data painted a mixed picture. While consumer prices rose at a 2.7 percent annual clip last month (faster than May’s 2.4 percent rate), wholesale inflation was flat. So while retail prices were a concern, wholesale prices currently suggest a muted effect from tariffs.^8,9

The second theme revolved around consumers, who continued to be a source of strength for the economy. Retail sales recovered in June, and while they were still lower than at year-end, consumer sentiment rose to its highest level since February.¹⁰

^{Unlike Liberation Day, April 2nd 2025, equity markets have largely shrugged off recent tariff announcements, betting that the President will extend deadlines rather than implement these new duties. This complacency creates near-term vulnerability should the August 1st deadline prove more binding than expected.However, even in the event of full-scale tariff implementations, robust private-sector balance sheets point to a climate of stagnation rather than an outright recession. This is a very important distinction for risky assets, since equities (particularly growth and mid-cap stocks) hold their ground in this type of macroeconomic environment.}

^{In this context, we are moving forward with a cautious stance on equities, but with a clear preference for growth over value. We view mid-cap company stocks as an asset class that we now find is trading well below fair value. With regard to fixed income assets, we expect weaker labor demand to allow the Fed to resume its easing cycle, supporting Treasuries. A surprise July Fed cut in rates is not completely off the table with Fed Chair Powell being called out for his inept stance on central bank policy.} 

^{Over in the digital world, the crypto sector's market value hit $4 trillion on Friday marking a milestone that reflects its shift from a nascent asset class to a central part of the global investment landscape. The $4 trillion milestone underscores how far the crypto industry has come from its speculative, fringe origins. With growing interest from asset managers, new exchange-traded products and broader adoption among retail and corporate users, digital assets are increasingly shaping conversations in global finance.}

^{The U.S. House of Representatives passed a bill on Thursday, The GENIUS Act, to create a regulatory framework for U.S.-dollar-pegged cryptocurrency tokens, known as stablecoins, sending the bill to President Donald Trump, who signed it into law.} 

^{A wave of renewed optimism, regulatory clarity in key markets and rising institutional flows have catapulted the crypto sector to a new valuation peak. As Tom Lee put it, this is crypto's "ChatGPT moment" with stablecoins being the first crypto product with mainstream utility and institutional clarity.  Bitcoin was essentially flat for the week while Ethereum (digital computer/smart contract platform) rocketed higher. Gold and oil traded slightly lower, but the US dollar continued its upward trajectory.} 

^{Partner with a Certified Financial Fiduciary at Castle Financial - In these volatile and uncertain times, the biggest value of working with a seasoned advisor, acting as a fiduciary, is having someone to help control emotions and not get caught up in making bad investment decisions. Let's face it, when times are turbulent, emotions will often trump logic, leading to devastating financial decisions.} 

^{Email julie@castlefinancial.com or call us at 732-888-4994 to schedule a complimentary 30 minute consultation and second opinion if you are not already a valued client of Castle Financial.}

This Week: Key Economic Data

Monday: Leading Economic Indicators.

Tuesday: Fed Chair Powell banking conference speech. Fed Official Michelle Bowman speaks.

Wednesday: Existing Home Sales. Treasury Buyback.

Thursday: Jobless Claims (weekly). Services & Manufacturing PMI. New Home Sales. Fed Balance Sheet.

Friday: Durable Goods.

^{Source: Investors Business Daily - Econoday economic calendar; July 18, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Monday: Verizon Communications Inc. (VZ)

Tuesday: The Coca-Cola Company (KO), Philip Morris International Inc. (PM), RTX Corporation (RTX), Texas Instruments Incorporated (TXN), Intuitive Surgical, Inc. (ISRG), Danaher Corporation (DHR), Lockheed Martin Corporation (LMT)

Wednesday: Alphabet Inc. (GOOG/GOOGL), Tesla, Inc. (TSLA), International Business Machines Corporation (IBM), T-Mobile US, Inc. (TMUS), ServiceNow, Inc. (NOW), AT&T Inc. (T), Thermo Fisher Scientific Inc. (TMO), NextEra Energy, Inc. (NEE), Boston Scientific Corporation (BSX), GE Vernova Inc. (GEV), Amphenol Corporation (APH), CME Group Inc. (CME)

Thursday: Honeywell International Inc. (HON), Union Pacific Corporation (UNP), Blackstone Inc. (BX), Intel Corporation (INTC)

^{Source: Zacks, July 18, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“All of us have to learn how to invent our lives, make them up, imagine them. We need to be taught these skills; we need guides to show us how. If we don't, our lives get made up for us by other people.”

– Ursula K. Le Guin

Essential Tax Reminders for People Selling a Home

If you’re selling your home, you may be able to exclude all or part of any gain from the sale when filing your tax return. To see if you are eligible for this benefit, you have to consider:

• The home’s ownership and use: Over five years, ending on the date of the sale, the homeowner must have owned the house and lived in it as their main home for at least two years.
  
  
• Any gains: Taxpayers who sell their primary home and gain from the sale may be able to exclude up to $250,000 of that gain from their income. The exclusion increases to $500,000 for a married couple, filing jointly.
  
  
• Mortgage debt: Generally, if your mortgage debt was forgiven or canceled, such as in the case of a foreclosure, you have to report this forgiven debt as income on your tax return.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. 

Tip adapted from IRS¹¹

What is Percussive Therapy?

If you’ve ever had a hard workout or gone on a long hike, you know how tight your muscles can get. There are many ways to help alleviate this soreness, from foam rolling to stretching. Percussive therapy is another option to help soothe sore muscles. 

Percussive therapy uses a massage gun that rapidly strikes the sore muscle with varying pressure. This therapy aims to increase blood flow to the aching muscles to speed recovery and limit soreness. It is the same idea as deep tissue massages; you glide a percussive massage gun device over sore muscles. Different guns come with various attachments and levels of pressure.

Tip adapted from Greatist¹²

A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid?

Last Week's Riddle: Seven people stand in a square room measuring 30' x 30'. Each can see the entire room and everyone in it without making any physical movement (aside from eye movement). Where inside this room can you place an apple so that all but one person can see it?
Answer: Place the apple atop one person's head.

Aurora Borealis
Jokulsarlon Glacial Lagoon

Footnotes and Sources

^{1. WSJ.com, July 18, 2025}

^{2. Investing.com, July 18, 2025}

^{3. CNBC.com, July 14, 2025}

^{4. WSJ.com, July 15, 2025}

^{5. CNBC.com, July 16, 2025}

^{6. CNBC.com, July 17, 2025}

^{7. CNBC.com, July 18, 2025}

^{8. WSJ.com, July 15, 2025}

^{9. MarketWatch.com, July 16, 2025}

^{10. MarketWatch.com, July 17, 2025}

^{11. IRS.gov, January 15, 2025} 

^{12. Greatist.com, March 18, 2025}