Markets drifted sideways last week, balancing fresh tariff anxiety with solid economic data and a surge in trading-driven bank earnings. The S&P 500 and Nasdaq posted weekly gains of 0.5% and 1.4%, respectively, while the Dow slipped, dragged down by American Express and a late-week selloff sparked by Trump’s renewed push for a 15–20% minimum tariff on all EU goods ahead of the August 1 deadline. The mixed tone showed a market caught between political noise and resilient fundamentals.
‍

Economic data reports came in strong: housing starts beat expectations, and the University of Michigan consumer sentiment index rose with one-year inflation expectations dropping to a five-month low at 4.4%. Those tailwinds were reinforced by Fed Governor Waller, who reaffirmed his support for a July rate cut, citing early signs of labor market weakness and tame inflation. That commentary helped push Treasury yields lower across the curve and solidified expectations for near-term easing, even as the Fed entered its pre-decision “quiet period,” when officials refrain from public commentary ahead of the July 30 FOMC meeting.
‍

Meanwhile, Wall Street’s largest banks capitalized on the macro churn. Trading revenue at the five biggest lenders surged to a record $71 billion in the first half of 2025, fueled by volatility in equities, FX, and rates markets triggered by tariffs and shifting tax policy. Goldman Sachs reported its best-ever equity trading quarter, while Bank of America and Citigroup posted multi-year highs. Executives from JPMorgan and Morgan Stanley suggested this trading boom may prove sustainable—even as traditional dealmaking remains well below 2021 peaks.
‍

Crypto markets rallied alongside legislative momentum. Congress passed three digital asset bills—including the GENIUS Act and CLARITY Act—sending Ethereum up more than 20% on the week as investors welcomed the clearest regulatory framework yet. With earnings season heating up, Fed policy on pause, and trade risks rising, markets are bracing for a choppier path ahead.

‍

‍