Last week, two out of the three widely followed U.S. indexes — the Nasdaq Composite and the S&P 500 — gained 1.24% and 0.45%, respectively, whereas the Dow Jones Industrial Average lost 0.30%. Escalating trade tensions after President Donald Trump’s aggressive tariff policies toward Canada, Mexico and the European Union fueled inflation concerns. However, easing oil prices, strong corporate earnings, and robust consumer spending data pushed stock markets to new peaks. The Federal Reserve has kept benchmark interest rates steady as it closely watches the inflationary effects of Trump's tariffs before considering any rate adjustments.
The Consumer Price Index (CPI) has seen notable acceleration in June, mostly due to the rising costs of goods resulting from recent tariff hikes. The CPI has increased 0.3% monthly, following a 0.1% increase in May. Whereas year over year, CPI increased 2.7%, the highest level since February, from 2.4% in May. The Producer Price Index (PPI) for June registered a flat monthly performance, but the year-over-year figures continue to signify elevated price levels. Retail sales in June rose 0.6% from a 0.9% fall in May, signaling continued consumer strength. The U.S economy has witnessed its first negative Gross Domestic Product (GDP) reading since Q1 2022. The GDP decreased at a downwardly revised 0.5% annualized rate last quarter. The U.S. labor market continues to show resilience, with 147,000 jobs added in June, surpassing expectations and the unemployment rate dipping to 4.1%.
On the global front, the relative calming of Middle East tensions earlier in July contributed to lower oil prices, which is generally a positive for inflation and the global trade and supply chain.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
Shares of Curtiss-Wright Corporation CW have gained 26% (versus the S&P 500’s 7.7% increase) since it was upgraded to a Zacks Rank #2 (Buy) on May 13.
Another stock, Organigram Global Inc. OGI, which was also upgraded to a Zacks Rank #2 on May 14, has returned 17% (versus the S&P 500’s 6.9% rise) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
