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Earnings Impress, but Macro Tensions Return: Inside a Reluctant Rally

Updated: 7 days ago

👋 Welcome Back Investors! (July 14 to 18, 2025)

Earnings season kicked off with a bang, pushing the S&P 500 and Nasdaq to fresh highs early in the week. Big banks delivered solid beats, tech kept climbing, and AI names stayed in focus. But beneath the surface, macro tension built fast; inflation data came in sticky, tariff drama escalated, and bond yields crept higher. Copper stayed hot, oil bounced on supply risks, and Bitcoin found footing above $118K. With global central banks sounding cautious and geopolitics heating up, the rally’s still on, but so is the risk. Welcome back to another a recap, of this weeks major finance news!



📊 Earnings Beat, Markets Blink; Wall Street Shrugs at Big Bank Strength

Earnings season kicked off this week with strong numbers from major financial institutions, but the market response was lukewarm at best. Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley all delivered solid quarterly results, caused by higher interest income, robust investment banking fees, and steady consumer demand. For example, Bank of America beat estimates with $7.9 billion in net income, while Morgan Stanley saw its investment banking revenue surge 60% year-over-year, a sign that deal making is showing signs of life again. Still, the broader indexes barely budged. According to Yahoo Finance, the S&P 500 rose just 0.6% for the week and the Nasdaq 100 added 1.5%, despite headline-grabbing earnings. That’s because investors seem to be looking beyond earnings beats, focusing instead on macro concerns like sticky inflation, rising yields, and tariff escalation. Even as companies post healthy numbers, the market is showing signs of selective risk appetite, rewarding growth (like AI) while showing less enthusiasm for cyclical and rate-sensitive sectors.


In other words, strong earnings aren't a guaranteed fuel source anymore. With valuations stretched and rate cuts still on hold, investors want more than just a beat, they want a reason to believe in upside. And this week, Wall Street's message was clear: “Good isn’t good enough.”



📈 June CPI Cools Slightly, But Not Enough for a Rate Cut Just Yet

Investors got a closer look at inflation this week as the June Consumer Price Index (CPI) showed a modest cooldown, but not enough to tip the scales in favor of immediate Fed action. Headline CPI rose 3.3% year-over-year, down slightly from 3.4% in May, while core inflation (excluding food and energy) held steady at 3.4%. On a monthly basis, prices rose 0.2%, largely in line with expectations. Markets initially welcomed the report, viewing it as a sign that inflation continues to slowly grind lower. But the details were more mixed beneath the surface. Shelter and services remained sticky, with rent and insurance costs still climbing, while goods inflation cooled thanks to softer auto prices and retail discounts. Energy prices were flat, and food inflation ticked up slightly, reinforcing the message that the disinflation trend is slowing, not stalling, but not accelerating either. Fed officials responded with cautious optimism, emphasizing progress but stopping short of signaling a pivot. For now, traders are still pricing in the first rate cut in November or December, but hotter prints in coming months, especially with tariffs re-entering the mix which could push that further out. The CPI report did little to shake the broader equity rally, but it did add to a growing list of reasons why the path to 2% inflation remains bumpy at best.


🛢️ Oil Finds Support as Imports Surge and Macro Risks Linger

Crude prices climbed again this week, with WTI crude rising over 2%, helped by a mix of technical support and strong demand out of China. The $77 level which aligns closely with the 200-day moving average acted as a key support zone, attracting fresh buying as traders bet on tighter supply and resilient global consumption. According to customs data, Chinese crude oil imports surged to 12.6 million barrels per day in June, up 4.3% from the previous month, marking the second-highest level on record. That demand spike added fuel to the rebound, especially with supply still constrained by ongoing sanctions and export cuts.


At the same time, the backdrop remains complicated. Geopolitical friction continues to pressure global energy markets, with U.S. tariffs, Russian sanctions, and potential Middle East supply risks all keeping traders on edge. Despite rising inventories in the U.S., the broader trend suggests tightening conditions. The International Energy Agency also signaled that market balances may shift further into deficit in Q3, which could keep crude elevated into late summer. While oil hasn’t made a decisive breakout yet, it’s showing signs of building a base for higher prices, especially if macro headwinds intensify or demand surprises to the upside. For now, WTI’s bounce off the 200-day line has kept energy bulls in the game, with eyes on the $80 level next.



🌍 Global Trade Tensions Escalate as U.S. Tariffs Widen the Rift

Trade friction surged back into focus this week as the U.S. continued rolling out new tariffs across multiple sectors and regions, reigniting concerns about global supply chains and economic fragmentation. According to the World Economic Forum, the latest round targets goods from China, the EU, Brazil, Mexico, and others, with levies as high as 50% on strategic materials like copper and aluminum. The tariffs are part of a broader effort to “reshore” production and pressure trade partners on currency and industrial policy, but, the global response has been swift.


Several major economies, including the European Union and Mexico, are now threatening retaliatory tariffs or appealing to the WTO, while countries like Vietnam and India are re-positioning to attract redirected supply chains. Even U.S. allies are expressing concern over the potential inflationary fallout and economic instability that could stem from prolonged trade escalation. Meanwhile, global shipping rates have jumped, and cross-border investment flows are beginning to slow, signaling broader unease among multinational firms.


With G20 finance leaders meeting in South Africa this week, trade dominated the agenda. While no coordinated solution has emerged, central banks and policymakers are increasingly acknowledging that tariff-driven inflation and slowing global trade volume may become long-term risks. For markets, it’s another macro wildcard, one that could impact corporate earnings, commodities pricing, and monetary policy well into year-end.



🐉 China’s Recovery Slows as GDP Misses and Deflation Worries Build

China’s latest economic data added to global concerns this week, as Q2 GDP rose just 4.7% year-over-year, missing expectations and signaling slowing momentum in the world’s second-largest economy. Industrial output, retail sales, and fixed-asset investment all came in softer than forecast, raising fresh questions about the strength of China’s post-COVID recovery. Youth unemployment remained near record highs, and inflation continues to run near zero, with consumer prices rising just 0.1%, edging closer to outright deflation.


The weaker than expected growth highlights the continued drag from China’s troubled real estate sector and cautious consumer behavior. Exports have also slowed under pressure from rising global tariffs and softening external demand, further complicating Beijing’s policy outlook. While Chinese officials reiterated their growth target of “around 5%” for 2025, markets are beginning to doubt whether that’s achievable without a major stimulus injection.


For global investors, the data serves as another macro headwind, especially for emerging markets, commodity exporters, and multinationals exposed to China’s consumer and industrial sectors. The slowdown also has implications for global inflation, as deflationary forces from China could ripple outward, even as Western economies still grapple with lingering price pressures. With trade tensions rising and domestic demand weakening, China’s economic engine is clearly losing steam, and markets are watching closely.




👀 Stocks to Watch: What This Week’s Moves Reveal

Markets opened strong this week as bank earnings and AI momentum pushed indexes to new highs, but rising yields, sticky inflation, and renewed trade fears sparked some hesitation into Friday. The S&P 500 and Nasdaq 100 both notched record closes, but under the surface, positioning started to shift. Defensive plays, energy, and supply chain names saw renewed attention. Here are the stocks that stood out this week:

  • Nvidia (NVDA) – Briefly crossed a $4 trillion market cap for the first time before cooling, maintaining its role as the lead AI sentiment barometer. Still one of the most watched stocks globally.

  • Morgan Stanley (MS) – Jumped after reporting a 60% YoY surge in investment banking revenue, highlighting a rebound in deal making and strong trading activity.

  • Freeport-McMoRan (FCX) – Held gains from last week as copper remained elevated amid ongoing tariff concerns and tight global supply. Commodity traders continue to lean bullish.

  • ExxonMobil (XOM) – Extended its rally, rising nearly 3% as WTI crude bounced off its 200-day moving average, supported by rising Chinese import demand and geopolitical pressure.

  • Prologis (PLD) – Gained traction again as global tariff shifts drove renewed interest in logistics and industrial REITs, with investors eyeing supply chain reallocation themes



🛎️That’s a Wrap!

That’s it for this week’s recap, thanks for reading. Wall Street opened strong as bank earnings and AI momentum pushed the S&P 500 and Nasdaq to new highs. Nvidia crossed $4 trillion, Morgan Stanley crushed earnings with a 60% jump in deal revenue, and oil bounced off its 200-day moving average on soaring Chinese demand. But by midweek, sentiment turned cautious. The June CPI report showed inflation cooling, but not enough, while tariff headlines and global trade tensions escalated. China’s economy added to the weight, with Q2 GDP missing expectations and deflation worries growing. As earnings season rolls on and macro headwinds stack up, one thing’s clear: the summer slowdown isn’t slowing down at all.


Until then, stay focused and stay curious. Catch you next week 👋



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