Last week saw U.S. equity markets extend their rally, with the S&P 500 rising 0.6% and the tech‑heavy Nasdaq Composite advancing 1.5%, while the Dow Jones Industrial Average remained essentially flat, marginally down 0.1% as investors digested a mix of strong corporate earnings, upbeat economic data, and continued tariff‑related policy debate. Both the S&P 500 and Nasdaq closed at fresh all‑time highs by week’s end, driven by a wave of better‑than‑expected second‑quarter results and encouraging consumer spending figures.
Weekly Index Performance
| Index | Last Close (Jul 18) | Weekly Change |
| S&P 500 | 6,312.95 | +0.6% |
| Nasdaq Composite | 16,765.32 | +1.5% |
| Dow Jones Industrial Average | 37,552.58 | –0.1% |
Key Drivers of Last Week’s Rally
Robust Corporate Earnings
- Roughly 71% of S&P 500 companies reporting thus far beat consensus earnings estimates, signaling healthy corporate profitability for Q2.
- Consumer staples leader PepsiCo soared over 7% on July 17 after delivering record revenue and margin expansion, while United Airlines jumped roughly 4% on an upgraded half‑year outlook.
Encouraging Economic Data
- Weekly jobless claims unexpectedly fell to 221,000, the lowest level in six weeks, suggesting continued strength in the labor market.
- Retail sales for June climbed 0.6%, beating forecasts and reinforcing the view that consumer spending remains resilient despite concerns over higher tariffs.
Tariff and Trade Sentiment
- Despite President Trump’s renewed threats of imposing blanket tariffs of 10–15% on imports from over 150 countries, equity markets largely shrugged off escalation fears, buoyed by strong underlying fundamentals.
Fed Policy Speculation
- Attention turned to Federal Reserve Chair Jerome Powell’s upcoming speech on July 22, with markets debating whether the Fed will signal a rate pause or hint at potential cuts amid mixed inflation readings.
- President Trump publicly chastised Powell and other Fed governors, calling for an aggressive cut to a 1% policy rate—comments that underscored ongoing political pressure on central bank independence.
Sector Highlights
Last week’s gains were broadly distributed, but certain sectors stood out:
Technology: Led by a 3.4% jump in Taiwan Semiconductor (TSMC) and ongoing strength in Nvidia, the Nasdaq notched four straight record closes—its longest streak since November.
Consumer Staples: Defensive names outperformed, with PepsiCo’s blockbuster report driving sector momentum.
Industrials & Airlines: Shares of United Airlines and general aviation components rallied after positive guidance, reflecting a broader recovery in travel demand.
Financials: Major banks including JPMorgan, Wells Fargo, and Morgan Stanley delivered strong earnings beats, lifting the sector on hopes of sustained loan growth and fee income.
Global Market Snapshot
U.K. Equities: The FTSE 100 flirted with record territory, propelled by gains in luxury retailer Burberry and miner Antofagasta, underscoring resilience amid Brexit-era uncertainties.
Corporate Insolvencies: In a rare positive sign for U.K. businesses, June insolvency filings in England and Wales fell 8% month‑over‑month and 16% year‑over‑year, suggesting improved balance sheets amid lingering inflation pressures.
Asia: Chinese equity benchmarks rallied on confirmation that Beijing will pursue further accommodative monetary measures, driving the CSI 300 up over 0.8% on positive sentiment.
What to Watch This Week
Federal Reserve Chair Speech (July 22): Investors will parse Powell’s remarks for clues on rate trajectory, especially amid mixed inflation signals and political pressures.
Key Economic Releases:
- June U.S. Producer Price Index (PPI) and July consumer confidence data.
- Early Q2 GDP revisions for Europe and Asia, which may influence global equity flows.
Earnings Pipeline: Major tech names (Apple, Microsoft), industrials (Caterpillar), and financials (Bank of America) report next week—providing further insight into corporate health and outlook.
