For the U.S. market, this is a super week

The Federal Reserve's interest rate decision, earnings reports from major tech companies, key economic data, and unresolved trade negotiations will all take center stage this week. The outcomes of this series of high-risk events are likely to set the tone for the market and economy for the remainder of the year.

According to the weekly schedule from Wall Street Insight, this week is packed with significant events. First, the Federal Reserve will conclude its policy meeting on Wednesday. Although the market generally expects no interest rate cuts at this meeting, investors will closely analyze the post-meeting statement for clues about the future policy path. Following that, tech giants such as Amazon, Apple, Meta, and Microsoft will release their earnings reports, testing the market's confidence in tech stocks.

In addition, a series of key indicators, from GDP to non-farm payroll reports, will be released in succession, providing important insights for assessing the health of the U.S. economy. All of this is overshadowed by the August 1 tariff deadline set by President Trump, who has indicated that the deadline will not be extended, raising market anxiety about the stability of trade negotiations.

For a stock market that has repeatedly hit new highs amid uncertainty, this week's intensive tests will determine whether its upward momentum can be sustained.

Julian Emanuel, Chief Equity and Quantitative Strategist at Evercore ISI, stated: "This week's packed schedule—trade negotiations, the FOMC meeting, employment reports, and earnings from four of the 'Tech Seven'—truly makes it a 'critical moment' for the market."

Mixed Earnings Season

Despite the challenging macro environment, U.S. corporate earnings have generally exceeded expectations. According to data compiled by Bloomberg, profits for S&P 500 companies grew by 4.5% compared to the same period last year. However, the details of the earnings reports reveal a divergence in the consumer market.

Strong demand from high-end consumers has been a highlight. American Airlines Group emphasized the robust demand for its premium cabin offerings, while Deckers Outdoor noted the strong sales of high-priced footwear brands like Ugg and Hoka. United Airlines and Delta Air Lines also reported that their business travel segments are leading their recovery. Meanwhile, Southwest Airlines CEO Bob Jordan stated in an interview that although tariffs have led to a $1 billion reduction in the company's annual pre-tax profits, "we have already seen signs of demand rebounding."

On the other hand, companies reliant on low-income consumers are facing pressure.

U.S. restaurant chain Chipotle Mexican Grill lowered its performance guidance, with CEO Scott Boatwright stating that "low-income consumers are under pressure," leading to a decline in their spending.

Additionally, the impact of tariffs has begun to show, with food industry giant Conagra Brands and multinational healthcare giant Abbott mentioning rising costs.

Bloomberg Industry Research strategists Gina Martin Adams and Michael Casper warned that as the effects of trade policies deepen, profits for consumer discretionary stocks are expected to continue declining into early 2026

Contradictory Signals in Economic Data

Economic data also presents a mixed picture, reflecting that the impact of tariffs has just begun to seep in. The market widely expects that the preliminary GDP figure for the second quarter, released by the government, will show a significant rebound in the U.S. economy after a contraction at the beginning of the year due to a surge in imports.

However, other reports set to be released this week may point to certain weak spots in the economy. Economists expect that consumer spending in June, after stripping out inflation factors, showed almost no growth. Other forecasts indicate that job growth continues to slow, and the unemployment rate may rise slightly. At the same time, as tariffs begin to take effect, they expect the Fed's preferred inflation gauge—the core Personal Consumption Expenditures (PCE) price index—to accelerate.

“If you take the time to peel back the surface and examine the underlying details, you will find that this is a clear slowdown, although it is not the kind of economic cliff that most people expected,” said Gregory Daco, chief economist at EY-Parthenon.

Uncertain Tariff Outlook

Trade policy remains the biggest source of uncertainty in the market. Investors hope that after months of back and forth, trade negotiations can achieve some stability, but the outlook remains unclear.

Kevin Gordon, senior investment strategist at Charles Schwab & Co., stated, “I think the market is more likely to gain clarity on the resilience of the economy, rather than on trade.”

He pointed out that the deadlines for “reciprocal tariffs” against some of the U.S.'s largest trading partners are staggered, and there are still unresolved issues with the announced framework of agreements, “so I don’t think August 1st is some magical day when we will stop being plagued by tariff anxiety.”

Dan Greenhaus, chief economist and market strategist at Solus Alternative Asset Management, believes that “we may need a few more months before we have a clearer understanding of the cost distribution of tariffs.”

Michael O’Rourke, chief market strategist at JonesTrading LLC, expressed a similar view, stating, “We will only know where we stand after the market and the economy have had a chance to digest the new tariff rates that take effect on Friday.”