U.S. equity markets posted mixed results at the close of last week as investors weighed corporate earnings, inflation metrics, and commentary surrounding Federal Reserve leadership.
The S&P 500 index climbed to 6,296.79 from 6,259.75 the previous week, while the Nasdaq Composite rose to 20,895.66 from 20,585.53. Meanwhile, the Dow Jones Industrial Average recorded a minor drop, ending at 44,342.19 compared to 44,371.51 a week earlier.
A surge in corporate earnings helped sustain risk appetite, with both the S&P 500 and Nasdaq reaching record highs. However, macroeconomic indicators and political statements regarding Fed Chair Jerome Powell added complexity to investor sentiment.
Consumer Price Index (CPI) data revealed a 0.3% increase in June, matching forecasts and surpassing May’s 0.1% rise. Annual CPI climbed to 2.7%, slightly above the 2.6% projection, while Core CPI rose by 0.2% month-on-month, short of the anticipated 0.3%.
Meanwhile, the Producer Price Index (PPI) was flat for June, following a 0.3% gain in May. Core PPI also showed no movement, falling below Bloomberg’s 0.2% projection and the previous 0.4% increase.
Political buzz stirred after reports surfaced that former President Donald Trump had told Republican lawmakers he intended to remove Fed Chair Powell. Trump later retracted the statement, calling it “highly unlikely,” amid criticism of renovation expenditures at the Federal Reserve’s facilities.
In response, the Fed released a letter defending the costs and reaffirming its independence. Speaking at the NYU Money Marketeers event, Fed Governor Christopher Waller advocated for a 25 basis point rate cut in July, noting the need for flexibility depending on future data. Chair Powell, however, maintained a more cautious approach amid uncertainty over international tariffs.
Retail activity showed strength in June, with sales climbing 0.6%, beating forecasts of 0.1%. Even after excluding automobiles and flat gasoline prices, retail sales grew by 0.6%, reversing May’s decline.
As Wall Street digests these developments, investors remain on alert for further signals from the Fed, earnings updates, and macroeconomic indicators that may shape the trajectory for the remainder of Q3.
