Tariff deals and deadlines, stock trends, Nvidia’s milestone and advice on handling the heat of the market moment.
Earnings season will not kick off in earnest until next week with big banks, but stocks have been drifting higher this week in anticipation of good results, despite warnings of tariff complacency growing louder within the investor community.
Stocks’ buoyancy came in part from renewed investor demand for tech companies. That includes Nvidia, which became the first public company worth over $4 trillion this week. It was a remarkable moment, signifying how investors believe artificial intelligence (AI) will deliver an economic transformation the likes of which we have not seen since the Industrial Revolution in the 18th century.
No doubt AI euphoria is a large part of the reason otherwise crushing news like the Texas flood tragedy, outcry over how Medicaid and SNAP provisions in the “One Big Beautiful Bill” will affect the vulnerable in our population, and ongoing conflicts in the Middle East and Ukraine is not having any measurable market impact.
It reminds me of a great quote by the late Jack Bogle, founder of Vanguard, who said, “The mistakes we make as investors is when the market’s going up, we think it’s going to go up forever. When the market goes down, we think it’s going to go down forever. Neither of those things actually happen. Doesn’t do anything forever. It’s by the moment.”
As long-term investors, we know this to be true, so that even when we may feel frustrated, confused, deflated, excited or even euphoric about changes happening around us, we must always keep a steady hand on our investment plan, and not swing for the fences or call off the game in the heat of a moment.
Speaking to many of you in these last few weeks, the uneasiness over tariff deadlines is palpable and this week’s developments have not lessened those concerns. While the market’s response has been modest for now, President Trump is making a political and economic wager that could drastically reshape international affairs and define his legacy.
Trump is coming off a legislative win with his multitrillion-dollar income-tax cuts. And he’s confidently levying tariffs at levels that previously rocked global markets, buoyed by inflation easing so far instead of accelerating as many economists and Democratic rivals had warned. In some ways, by floating tariffs as high as 40% to even 100% on “Liberation Day” in early April, the administration has “normalized” 25% tariff hikes. But, as we have written previously, tariffs at that level are still among the highest in modern history.
To recap this week’s news, Trump’s 90-day tariff negotiation deadline was extended to August 1. As of Monday, his administration had sent letters to 14 countries that place levies on imported goods ranging from 25% to 40%. He said Tuesday he would sign an order to apply 50% tariffs on copper imports and added that at some point pharmaceutical drugs could face tariffs of as much as 200%. All of that is on top of his existing 50% tariffs on steel and aluminum, 25% tariffs on autos and his separate import taxes on Canada, Mexico and China.
The governments of Japan, South Korea, Malaysia, Myanmar, Thailand, Cambodia and South Africa expressed hope for further negotiations on tariffs with Trump, though it’s unclear if those will occur, as the president said it would be too “complicated” to hold all those meetings.
As we all wait and see what August 1 will ultimately bring, the lack of reaction in the financial markets reflects skepticism that Trump will go through with the highest numbers proposed or alternatively that compromises will be reached.
So, we watch and wait as investors; beginning next week with earnings season, we will hear how CEOs are doing the same while trying to plan in a vacuum around what, for some businesses, is a material change to their operating conditions and profit margins.
And while Nvidia reached a key threshold in market cap this week, it is interesting that no Magnificent Seven stocks are in the top 10 year-to-date performers, and only three of the seven are outperforming the S&P 500. It is also worth noting that international markets are trouncing domestic markets in 2025.
An element to monitor as earnings season proceeds is the rate of “beats” by revenue versus earnings. We suspect many companies will beat on revenue, but not on profits, as companies reveal the effects of policy-related pressure. Nevertheless, we still see financial markets hanging in there, especially with the potential for an interest-rate cut to reduce borrowing costs.
There is never a dull moment in these fast-moving times, and we can commiserate with your oscillating emotions. We are here to help you with facts and scenario analysis to help you make the best financial decisions possible.