Earnings season – ready, set, go
The past week left a mixed impression. On the one hand, the indexes once again reached all-time highs (with the exception of the Dow Jones) and hit record levels. On the other hand, a renewed wave of tariff wars has flared up, causing growing concern among investors. Naturally, market participants are worried about the consequences and increasingly speak of overheating and a potential bubble. This, in turn, raises the question: is it time to prepare for a correction and consider selling? Whether that is truly the right move, however, remains an open question.
The market remains strong, and with the new corporate earnings season set to begin on 15 July, current prices may appear attractive to some investors if business performance proves solid. So, while the market may seem slightly overbought, that alone is clearly not a reason to start selling.
From a technical standpoint, the situation has even stabilised somewhat. The pace of growth has slowed, and judging by weekly results, it might seem as though a correction has begun (although that is not the case). Still, against the backdrop of new tariff initiatives by President Donald Trump, all major U.S. indexes ended the week with slight losses.
The blue-chip Dow Jones Industrial Average (DJIA-30) posted the largest decline — just over 1% (-1.02%). The main U.S. benchmark, the S&P 500, lost a modest 0.31%, while the tech-heavy NASDAQ Composite fell by just 0.08%.
A similar picture emerged across the ITS index family: the ITS World Index (ITSW), which tracks global companies, declined by 0.61%, while the Islamic securities index ITS Shariah (ITSS) slipped only 0.14%. Trading remained close to neutral throughout the week.
This flat trend was also reflected across sectors: 4 out of 11 economic sectors ended the week in positive territory, while 7 closed in the red. In both cases, gains and losses barely exceeded 1%. The strongest performance came from oil and gas stocks, which rose by an average of 1.63%, driven by a 3% increase in oil prices over the week.
Cyclical companies were among the weakest performers, with average losses of -1.77%. This figure masks greater volatility within the sector, fuelled by Tesla (TSLA). Its shares initially dropped sharply following another public spat between Trump and Elon Musk and then spent the rest of the week trying to recover – with limited success. Still, there is little surprising in such swings when it comes to Tesla.
One clear winner last week was Delta Air Lines (DAL), which impressed investors by becoming one of the first major companies to report stellar Q2 2025 results. Its shares soared more than 10%. Following such a strong report, investors are now eagerly awaiting figures from other leading airlines.
In summary, despite President Donald Trump’s efforts to shake investor confidence, he has not succeeded. The market remains resilient and continues to look upward with confidence.
Market outlook for 14 July 2025
It may be the middle of summer, but investors have little time to relax. The coming week promises to be busy and intense – from every angle. Not only due to key macroeconomic data and corporate news, but also, and perhaps most significantly (and certainly most unpredictably), due to geopolitics – specifically, President Donald Trump and his latest round of recycled tariff initiatives.
So, what can we expect this week?
First and foremost, a fresh wave of macroeconomic data. Starting on Tuesday, markets will see key indicators of consumer inflation: the Consumer Price Index (CPI) on Tuesday, the Producer Price Index (PPI) on Wednesday, and retail sales data on Thursday. These are all crucial metrics that could either lift investor sentiment or dampen it significantly. Still, we’ll hope for the former.
Secondly, this week marks the official launch of a new earnings season. As always, the big banks will lead the way. On Tuesday and Wednesday, we’ll see reports from nearly all the major financial institutions – including JPM, WFC, C, BAC, GS, MS and several smaller players. Add to that the results from BlackRock (BLK), the world’s largest asset manager, and Charles Schwab Corp (SCHW), the leading U.S. brokerage, and by the end of the week we’ll have a well-rounded picture of the financial sector’s condition.
But that’s not the whole story. While the financial sector remains important, it is no longer the main driving force in today’s economy. There are other companies whose earnings may attract just as much – or even more – investor attention. Chief among them is Netflix (NFLX), whose report is due after Thursday’s closing bell. The company’s results will almost certainly set the tone ahead of the forthcoming wave of reports from the tech giants.
The stakes are high – and it’s the earnings season that investors should be watching most closely.
As for Donald Trump – little needs to be said. He continues to stir up investor anxiety. On Monday morning, global trade was thrust back into the spotlight after the U.S. President announced over the weekend that he would introduce 30% tariffs on imports from Mexico and the European Union. This followed last week’s news of similar tariffs on Japan, South Korea, Canada and Brazil, as well as a 50% tariff on all copper imports.
Trump’s new tariffs are set to come into force on 1 August, giving the targeted countries less than three weeks to reach a trade agreement with Washington – after the deadline was moved from 9 July.
Unsurprisingly, all of this is keeping markets on edge and making investors nervous. However, as we’ve seen, it has not stopped them from continuing to buy and push the indexes ever higher. This suggests that optimism remains strong – and now everything depends on whether the upcoming earnings season lives up to those bullish expectations.