Weekly Market Performance — July 11, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of July 7, 2025. Returning from the Fourth of July holiday weekend, U.S. stocks closed narrowly mixed as investors digested a range of tariff headlines and the passage of President Trump’s One Big Beautiful Bill Act (OBBBA). However, to close a rangebound week of trading, stocks slipped on the latest bout of tariff threats from inside the Capital Beltway. European equities posted weekly gains on the back of a nearly week-long winning streak, while markets across Asia ended mixed. Treasuries extended last week’s decline as yields continued to march higher. In commodities and currencies, crude oil and gold ended the week on a positive note, and the dollar strengthened against its peers.

Index Performance

U.S. and International Equities

U.S. Equities: Major U.S. averages ended the week lower to little changed as markets drifted through a relatively quiet week — aside from the latest ramp in trade rhetoric from Washington. After delaying the much-anticipated July 9 trade deal deadline, President Donald Trump sharpened his tariff offensive once again late in the week. The White House threatened higher universal tariffs and elevated duties on Canada, leading stocks to trim weekly gains Friday as markets began to analyze the new threats alongside earlier calls for higher tariffs on Brazil, South Korea, Japan, and copper imports.

Throughout most of the week, equities appeared to enter waiting mode ahead of next Tuesday’s consumer inflation report and the kick-off of earnings season. However, sentiment leaned positive on upbeat quarterly results from Delta Airlines (DAL), while the artificial intelligence (AI) theme noted strong June sales data for Taiwan Semiconductor (TSM). However, despite no firm directional driver through most of the week, the S&P 500 grinded higher to score new all-time highs as Wall Street bulls pushed AI bellwether NVIDIA (NVDA) over the $4 trillion market cap milestone. Energy companies topped the sector leaderboard on the back of Tuesday gains after the U.S. trimmed crude output projections, aiding oversupply concerns, and the White House capped solar and wind project tax credits.

International Equities: Across the pond, European stocks set their longest winning streak in a month, climbing Monday through Thursday, before paring back week-to-date gains on the latest U.S. trade headlines. Focus landed on the European Union’s (EU) race to strike a trade deal with Washington after the White House reportedly offered the European Union (EU) a framework early in the week featuring 10% baseline levies with exemptions for spirits and aircraft. Outside of trade, U.K. politics and fiscal risks remained in the headlines after the Office for Budget Responsibility suggested elevated risk of increased debt-interest costs as pension plans slow government bond purchases. Further, the Treasury and Finance Minister Rachel Reeves left the potential wealth tax on the table amid growing calls to introduce the levy while Reeves continued to shift reform plans in multiple areas. Nonetheless, the U.K. equity benchmark FTSE 100 scored a new all-time high Thursday, and materials names received a lift across the region from rallying iron ore prices on reports that China is determined to extinguish industrial overcapacity.

Major Asian markets ended mixed this week, although the broader Asia-Pacific region closed lower as stocks struggled to find a firm direction over the last five days amid volatile trade headlines. South Korea extended its recent rally as investors cheered upbeat trade-talk commentary following the U.S. deadline extension, and accommodative policy from the Bank of Korea, citing concerns around household debt and home prices in Seoul. Greater China also advanced, with Hong Kong-listed shares drawing some attention as property stocks rallied on reports of property sector stimulus coming soon — plus a $209 billion stimulus package to counter U.S. tariffs — offsetting a slump in copper-mining stocks earlier in the week. Taiwan advanced while Japan underperformed on a weakening yen. Australia, New Zealand, and India also closed lower.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded lower this week. The monetary policy rate-sensitive two-year yield and the 10-year yield ended roughly three and eight basis points higher, respectively. The bond market continues to face a tug-of-war between economic data and concerns over debt and deficit spending. Last Thursday’s stronger-than-expected jobs report caused Treasury yields across the curve to jump, with the 2-year higher by 0.10% on the day (the 10-year was higher by 0.07%) as Federal Reserve (Fed) rate cut expectations got pushed out. In the interim though, much has been made of the recent tax-and-spend budget bill, which was just signed into law, that will keep budget deficits at elevated levels. The bond market will likely remain in a struggle between economic data and debt and deficit concerns throughout the rest of the year, with economic data likely to continue being the larger driver of volatility in the Treasury market. But until the economic data shows real signs of a slowing economy, both will likely weigh on intermediate and longer-term Treasury prices.

Elsewhere, corporate credit markets have fully recovered from their early April tantrum with spreads (the additional compensation required to own riskier debt than Treasuries) largely retracing back down to recent secular tights. The investment grade corporate buyer base can generally be broken into three segments: A) domestic institutional investors, B) domestic retail funds, and C) foreign investors, with domestic institutions being the largest. Within the segment resides pension fund investors who are traditionally regarded as yield buyers. Yield buyers with return targets in the 7-8% range have been big buyers of corporate credit issuers as elevated yields allow these investors to match investment goals without the need to take on large amounts of equity volatility. But, because of these buyers, the risks within the credit markets are masked, in our view. With tariff uncertainty still lingering and companies dealing with still high interest expenses, our model-implied fair value for the investment grade market suggests spreads are too tight given economic conditions.

Commodities and Currencies: The broader commodities complex found positive week-to-date territory Friday, securing a measured weekly gain. The Bloomberg Commodities Index rallied Friday morning, with West Texas Intermediate (WTI) crude recouping losses as crude traders brushed off oversupply warnings from the International Energy Agency (IEA), focusing on the short-term tightness in the market. The move higher followed recent data indicating refiners boosted gasoline production to meet demand generated by elevated summer power generation and the driving season in the Northern Hemisphere. Gold prices also advanced Friday, catching another haven bid as trade policy concerns returned to the front burner after markets briefly appeared desensitized to trade threats earlier in the week. In currencies, the dollar strengthened over the last five days. The greenback received support from a weakening yen and fresh tariff announcements, as well as little signs of reserve currency holdings shifting away from the dollar based on International Monetary Fund data.

Economic Weekly Roundup

Fed Minutes Confirm Wait and See Mode. Some members of the Federal Open Market Committee (FOMC) were open to cutting rates at the next meeting, while some took another position that involved no rate cuts at all for the remainder of the year. Committee members were concerned about stagflation risks if inflation proved persistent while employment weakened. Surprisingly, members thought the uncertainty about inflation and the economic outlook had decreased. Yet, committee members wanted to take a careful approach in adjusting monetary policy. Several participants noted that lower- and moderate-income households were switching to lower-cost items, and these households could be disproportionately affected by tariff-related price increases. A couple of participants noted that business investment in AI could boost productivity.

The FOMC is comfortable remaining in wait-and-see mode. Despite headwinds, the economy continues to trudge along, giving policymakers time to assess the projected impact from tariffs. Ever since last week’s payroll release, markets do not expect the FOMC to cut rates later this month. Next week’s inflation data will likely show a reacceleration, giving the Fed more reason to keep rates elevated. We don’t expect inflation readings to improve until later this year.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: No economic releases scheduled

• Tuesday: Empire Manufacturing (Jul), Headline and Core CPI (Jun), Real Average Hourly Earnings (Jun), Real Average Weekly Earnings (Jun)

• Wednesday: MBA Mortgage Applications (Jul 11), PPI (Jun), New York Fed Services Business Activity (Jul), Industrial Production (Jun), Manufacturing (SIC) Production (Jun), Capacity Utilization (Jun), Fed Beige Book Release

• Thursday: Retail Sales (Jun), Import Price Index (Jun), Export Price Index (Jun), Initial Jobless Claims (Jul 12), Continuing Claims (Jul 5), Philadelphia Fed Business Outlook (Jul), Business Inventories (May), NAHB Housing Market Index (Jul), Net Long-term TIC Flows (May), Total Net TIC Flows (May)

• Friday: Housing Starts (Jun), Building Permits (Jun preliminary), University of Michigan Consumer Sentiment Report (Jul preliminary)

  
  

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

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This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

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