Weekly Economic Update – 07/14/2025

The Week on Wall Street

Stocks were slightly lower last week, while looking past news of fresh U.S. tariffs on nearly two dozen countries.

The Standard & Poor’s 500 Index fell 0.31 percent, while the Nasdaq Composite Index edged lower by 0.08 percent. The Dow Jones Industrial Average lost 1.02 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 0.43 percent.^1,2

The Return of the Tariffs

Stocks started the week lower after the White House posted letters to 14 countries announcing new tariffs, set to take effect August 1. They included 25 percent tariffs on South Korea and Japan.^3,4
 
Stocks dropped briefly midweek after the White House announced tariffs on seven additional countries. But as investors digested the news, markets gradually recovered, hoping the administration would dial back its steepest tariff rates again.

Markets also rallied on fresh AI trade enthusiasm and the latest Fed meeting minutes, which showed a majority of Committee members were open to adjusting interest rates later this year.^5,6
 
Markets opened higher on Thursday as investors shrugged off news of the 50 percent tariff on Brazil imports, announced shortly after Wednesday’s close. Momentum continued, and the S&P 500 and Nasdaq rose to fresh records.⁷
 
Then, after Thursday’s close, the White House announced the U.S. was raising tariffs on Canadian imports to 35 percent and was preparing some other tariffs. Markets opened lower on Friday and trended sideways during the trading session.⁸

The T Word

While tariffs drove market headlines last week, another “t word” made news: trillion.

More specifically, $4 trillion in market capitalization. The nation’s largest AI chip maker was the first company to breach that market cap level. It crossed the $4 trillion mark intraday on Wednesday, then closed above it for the first time on Thursday’s close.^9,10

So why does it matter when one stock hits such a milestone? For a market-cap weighted index like the S&P 500, a company valued at $4 trillion has an outsized effect on the overall index’s performance. The largest five companies in the S&P 500 comprise about one-third of the benchmark index.^9,10

Weekly Riddle

Seven people stand in a square room measuring 30′ x 30′. Each can see the entire room and everyone in it without making any physical movement (aside from eye movement). Where inside this room can you place an apple so that all but one person can see it?

Last Week’s Riddle: Alexandra’s mom had four children. The first one was named May, the second was named June, and the third was named August. What was the fourth child’s name?

Answer: Alexandra.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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Posted on July 14, 2025