Weekly Economic Update – 07/21/2025

The Week on Wall Street

Stocks were mixed last week, battling through tariff talk while responding to upbeat quarterly corporate reports and a trove of updates on the economy.

The Standard & Poor’s 500 Index rose 0.59 percent, while the Nasdaq Composite Index added 1.51 percent. The Dow Jones Industrial Average decreased 0.07 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, skidded 0.46 percent.1,2

Economic News

All three major market averages posted modest gains to start the week as investors appeared to shrug off tough talk on trade from the White House over the weekend.3

Stocks mostly fell after news that inflation warmed up a bit last month, albeit in line with economists’ expectations. A narrow, chip-led rally developed after a megacap chipmaker said it received assurances from the White House of its ability to sell products in China, pushing the Nasdaq modestly higher.4

Stocks continued their climb over the next session following news that consumer spending rebounded last month as trade talk slowed. The S&P 500 posted another record close amid several companies beating expectations as they reported quarterly financials.5,6

Markets went slightly lower on Friday despite news that consumer sentiment rose last month. The consumer sentiment report also showed a drop in concerns about tariff-induced inflation.7

Splitting the Difference

Two themes developed with fresh economic data released last week: inflation and consumers.

First, June inflation data painted a mixed picture. While consumer prices rose at a 2.7 percent annual clip last month (faster than May’s 2.4 percent rate), wholesale inflation was flat. So while retail prices were a concern, wholesale prices currently suggest a muted effect from tariffs.8,9

The second theme revolved around consumers, who continued to be a source of strength for the economy. Retail sales recovered in June, and while they were still lower than at year-end, consumer sentiment rose to its highest level since February.10

Weekly Riddle

A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid?

Last Week’s 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?

Answer: Place the apple atop one person’s head.

John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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