Midpoint Heatwave: The Most Important Week of 2025

It's not just summer's midpoint—this week is 2025’s market inflection point. Tech earnings, Fed decisions, and tariff deadlines collide.

KEY TAKEAWAYS

• This is the most important market week of 2025 so far
• 177 S&P 500 companies report earnings, including Apple, Amazon, Meta, Microsoft
• FOMC meets Tuesday-Wednesday, with policy likely unchanged but Powell’s commentary critical
• PCE inflation (Thursday) and jobs report (Friday) come after the Fed decision
• New tariff deals finalized, but rates trending toward 15%, raising inflation and margin risks

MY HOT TAKES

• Markets care more about certainty than low tariffs at this point
• Apple may be vulnerable–but still too big to ignore–we will know more this week
• Powell is stuck between political pressure and committee consensus–markets are stuck in the lurch
• This week’s data could finally push inflation over the edge
• Smoot-Hawley tariff comparisons aren’t hyperbole anymore
• You can quote me: “This week is the market inflection point of the year–yeah, the year.”

To know it is to love it. This week is not technically the midpoint of summer in the northern hemisphere, but it may as well be, because it will be the hottest of the year–in terms of market-moving information that is. Buckle up, folks, this week is THE market inflection point of the year. Yeah, the year.

 

Let’s start with earnings. We are scheduled to receive around 177 earnings announcements from S&P 500 members in the next 5 days alone. We are 168 in, and it has been so far, so good, with sales surprises averaging 2.41% and earnings surprises averaging 6.88%. Growth, so far, has been solid as well with revenues and earnings growing by 4.75% and 8.28% respectively. That’s not bad considering the rhetoric in the leadup was intense with growth expected to take a big step down from the prior couple of sectors. 

 

For you numbers addicts, S&P 500 EPS growth was 14.8% in 4Q24 and 12.8% in 1Q25. So far, we are clearly lower, but perhaps, not as ugly as expected… yet; we are after all only about ⅓ of the way there on the Big Index. The energy sector holds the top slot so far for rev and eps beats, though it is only ⅓ through its cycle. 

 

There will be many important earnings out this week, but all eyes will be on Apple, Meta, Amazon, and Microsoft. The reason should be obvious, and it is not that they are all Magnificent 7 members, though that is important. These companies are all in the top ten weightings of the cap-weighted S&P 500. Those companies alone represent almost 20% of the S&P 500. NVIDIA, which we won’t hear from until later in August represents another 7.4%, and Alphabet, which we heard from last week, is another 4%. Tesla, another Mag-7 stock and S&P top 10 with about 1.8% weight, also announced last week. 

 

This week’s quartet will be at the zenith–well almost zenith–of momentum tension for tech. Alphabet set a positive tone last week with nearly a perfect Q2 delivery, showing clear signs that AI continues to be a growth engine. Microsoft, Amazon, and Meta are all strong players with lots on the AI line, and investors will be looking for continued growth there, as well as from their traditional businesses. Apple, will be playing defense as it has been tarnished from its lack of AI progress and missteps. That doesn’t diminish the importance of solid results from its core businesses. It is still a fantastic company with intense customer loyalty. In addition to its obvious lack of AI presence (sorry Siri, you’re more like a friend), Apple’s premier product line smartphones are caught up in the tariff storm, manufactured principally in China but slowly moving to India. Investors will be keen to get any information on that.

 

Though it is not fair, those 4 names will dominate the news tape this week. There are however many other important announcements scheduled for this week, including, but not at all limited to  UnitedHealth Group, Ares, Boeing, UPS, JetBlue, Visa, Starbucks, Ford, AbbVie, Stryker, Reddit, CoinBase, Chevron, Exxon Mobil, and Palantir. Those are just some examples, but they are all important; make sure that you download the attached earnings calendar so you can follow closely. 

 

On the economic release front, there are a couple of elephants in the room. Namely, monthly jobs numbers, PCE inflation numbers, and an FOMC meeting. The FOMC will meet starting tomorrow and announce policy on Wednesday. The policy announcement will likely be as expected and unremarkable, but the Chairman’s post-announcement presser has the potential for delivering some fireworks. Policy is expected to be unchanged, and Powell is likely to continue to parrot his own company line. Wait and see, wait and see, wait and see. He has been under intense pressure from the administration to cut rates and he is not likely to relent in any way. He is not the only vote on the FOMC committee which can barely count uber doves on one hand at the moment. 

 

While the Fed’s job technically does not include the general economy nor the President’s interests, its dual mandate is inextricably tied to those agendas. Neither of those can thrive if unemployment is on the rise and inflation is unruly. The good news is that so far, unemployment seems under control, and inflation, though it has ticked up ever so slightly in recent months, has not shown signs of entering the danger zone. Though that does not give the Fed an excuse to sit on its hands, it will certainly use the current situation to sit tight. 

 

Ironically, the freshest data on the Fed’s dual mandate will come after the FOMC meets. PCE Price Index comes on Thursday and the monthly employment numbers on Friday. Inflation data is expected to show a slight uptick month over month and year over year. Inflation has recently moved back to the top of the list of worries for the market, with many expecting the new tariff regime to have impacts. More on that in a minute, but first we must pay some attention to monthly job numbers which are expected to show a decline in new hires and a slight gain in the unemployment rate. While the decline in new hires may fall, payrolls numbers above 100k are considered to be relatively healthy, heuristically speaking. 

 

Now, back to inflation. Pandemic era inflation–the sticky stuff at least–is still a factor in keeping it above the Fed’s target, but tariffs are expected to confound the downtrend we experienced last year. In case you missed it, August 1st is this week and it is also the President’s newest deadline for trade negotiations. It is coming up quickly, but a deal with Japan last week and a deal with the EU, announced overnight WHILE YOU SLEPT, adds to the already hand shook deals with China, Vietnam, and the UK. Though getting those handshakes was progress, the net result still remains. Tariffs are here and they are not going to be 10%, but rather seem to be trending toward 15%. There are some minor exemptions and steel and aluminum remain at vastly restrictive levels. This puts import tariffs on track to be at the highest levels since the Smoot-Hawley tariffs in the 1930s.

 

So, tariff negotiations seem to be settling on numbers higher than the previously expected 10% average. Interestingly, markets seem to be handling those levels. The S&P made new highs five days in a row last week, and it is trading yet higher this morning, powered by the news of the US-EU deal. How can it be? Tariffs are inflationary, and if they are not they cause margin compression for the companies whose stocks are in your retirement portfolio. Despite this, markets seem content to have, at least, some further certainty around what those tariffs will ultimately look like. 

 

This week will be important, indeed. A second third of the S&P reports with some of the biggest pullers on deck. The silent and inactive-to-date FOMC will meet, set strategy, and prognosticate. The President is cutting deals and the numbers are scary, but not as scary as the Liberation Day ones, we will learn if tariffs finally push inflation over the edge, and we will see if the labor market is in trouble. This week can be THE telltale of what the second half of the year will look like. 

 

Saturday is technically the midpoint of summer, and the next few days leading up to it, it will be hot, hot, hot on the streets of NYC, in the Fed’s half-renovated HQ, on the trading floor of the New York Stock exchange, and in your portfolio. Stay focused, stay cool.

 

FRIDAY’S MARKETS

 

Stocks rallied on Friday, propelled by upbeat earnings along with the momentum tailwinds of the week. Meme stocks have crept back into the investment world threatening to sling mud on legitimate gainers.

NEXT UP

• Dallas Fed Manufacturing Activity (July) may have improved to -9.5 from -12.7.
• Later in the week, tons of important earnings releases along with JOLTS Job Openings, the FOMC meeting, more housing numbers, Consumer Confidence, ADP jobs report, GDP, Personal Spending, Personal Income, PCE Price Index, and monthly jobs numbers. Please download the attached earnings and econ calendars so you are not caught in a storm without an umbrella.

DOWNLOAD MY DAILY CHARTBOOK HERE 📈

DOWNLOAD WEEKLY ECONOMIC CALENDAR HERE 📅

DOWNLOAD EARNINGS CALENDAR HERE 📅