Weekly Market Watch

The Goose that Laid the Golden Bars

Global equities rallied last week as international equities continued their year-to-date trend of outperformance relative to domestic equities. A weaker U.S. dollar and strong earnings results from international companies were catalysts for international equities. From a domestic standpoint, investors had muted reactions to trade policy changes related to India, semiconductors, gold bars and the August 7 deadline for tariff negotiations. These policy adjustments could impact the effective tariff rate by adding another 4-5%, with the overall amount reaching an estimated 14%. Investors have been digesting changes in fiscal policy while increasing focus on the forward guidance for monetary policy.

Market Outlook

This week’s Consumer Price Index (CPI) release will be a key data point for markets; it is currently projected to show an increase. Given that the price pressures listed within last week’s ISM^® Services PMI^® reached a three-year high, we anticipate that some economic softness will moderate any tariff-related goods inflation in the months ahead.

Table of the Week

As the second-quarter earnings season comes to an end, the blended growth rate sits at a strong 11.8%, significantly exceeding the initial estimates of 4.9%. This will mark the eighth consecutive quarter of year-over-year growth.

Every sector, except Utilities, has exceeded the initial estimates from the beginning of the quarter. The growth gap between the S&P 500^® and the index excluding the Magnificent 7, has narrowed from last quarter.

Despite continued economic, geopolitical and tariff uncertainties, 2025 has seen its first positive revision following a strong quarter. Growth estimates are now at 10.5%, with 2026 at 13.5%.

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For definitions of indexes used in this publication, please refer to pnc.com/indexdefinitions.

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