Wall Street closed the trading week modestly lower, with the S&P 500 remaining within striking distance of the historic 7000 level. Investor attention also focused on key inflation data and the kickoff of earnings season. Core CPI edged slightly below expectations, suggesting modest moderation in consumer inflation, while PPI met forecasts, sending a mixed signal on underlying price pressures.
Earnings season also began, with major banks and financial institutions—including JPMorgan, Goldman Sachs, and Bank of America —reporting robust loan growth, solid capital market activity and increasing investment banking deal flow.
For the week, the S&P lost 0.4%, while the Nasdaq dipped 0.7%, and the Dow fell 0.3%.
Future Wealth’s View
In our report last week, we had stated that the biggest risk to the stock market this year is not bad economic data or poor company earnings, but is instead, the repercussions of Trump’s actions that will likely create unpredictable and irreversible consequences. As if on cue, in the past week, the DOJ filed criminal action against the Fed Chair for overspending on expansion of the Fed buildings and then, a couple of days later, Trump imposed 10% tariffs on eight countries that questioned his pursuit of annexing Greenland. These actions are so laughable but they are not funny anymore.
Now, the U.S. faces the prospect of a new cycle of retaliation and escalation, not to mention the complete lack of respect from not only other countries but also from respected citizens of the US. To say we are heading towards more pronounced uncertainty would be an understatement. Week after week, we see chaos unraveling from the most powerful man in the world, who, this week, shamelessly accepted a Nobel Prize that was granted to someone else and then gave the middle finger to a factory worker in Detroit during a Presidential visit to the motor city.
It wasn’t supposed to be like this. Wall Street, Corporate America, and consumers were looking ahead to an economic boost from tax cuts in Trump’s One Big Beautiful Bill Act as well as more calm on the trade front. The Federal Reserve was also anticipating continued moderation in inflation this year as policymakers assumed that tariffs would deliver a one time jolt to prices instead of sustained upward pressure. A new flurry of import taxes could put that expectation at risk and jeopardize future rate cuts if inflation remains stubbornly above the Fed’s 2% target.
As investors, it is time to exercise caution and take steps to protect our portfolios. Even though Wall Street may shrug off Trump’s stupidity near term, there will come a day when one of his random decisions or the combined effect of all his haphazard policies could have a massive impact on everyone’s portfolios.