Markets swung back to the positive this week with news on the tariff and corporate earnings front. Will the 3rd quarter shape up to be just as strong as the 2nd?
Monday
S&P 500 1.47% | NASDAQ 1.95%
In a quick turnaround from last week, markets surged on Monday. Most gains occurred in the tech sector, building on optimism for a September rate cut and better than expected earnings.
Tuesday
S&P 500 0.49% | NASDAQ 0.65%
Markets retreated after going on the offensive early in the week. The services sector showed signs of cooling last month and looming deadlines for tariffs weighed on sentiment. The probability of a September rate cut rises above 85%.
Wednesday
S&P 500 0.73% | NASDAQ 1.21%
Another swing took place mid-week as analysts digested an influx of earnings. Reports included earnings figures from Disney, Uber, and DoorDash. Although services have shown signs of cooling, it has been largely shrugged off. Markets closed higher on the day.
Thursday
S&P 500 0.08% | NASDAQ 0.35%
The Nasdaq closed at a record high as emphasis has been placed on U.S. shored manufacturing. Apple announced additional investment in the U.S. at the White House as the tech sector surged higher.
Friday
S&P 500 0.78% | NASDAQ 0.98%
The tariff deadline passed yesterday and there was more room to run. Equities have ridden an earnings wave that has bode well for Large and Small Cap Stocks this week.
Conclusion
S&P 500 2.43% | NASDAQ 3.87%
This week proved to be a significant rebound from the week prior. Sentiment has improved on the number of tariffs on world trade partners since the August deadline. Additionally, specific companies are now exempt from tariff rates if they move manufacturing to the United States. Corporate earnings are still rolling in and a rate cut may swing the pendulum in favor of equities. As the 3rd quarter progresses markets may decide to put the theory of tariff-induced inflation to the test.
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