Big Stakes Ahead: Tariffs, Tech Earnings, the Fed, and Seasonal Headwinds Take Center Stage

👋Hello and Happy Monday! 🌅 

Here’s what’s on deck this week:

📆 Big week incoming: A fresh round of Fed drama and a key tariffs deadline are set to steal the spotlight on Wall Street.

💰 Earnings-palooza: Tech titans Microsoft, Meta, Apple, and Amazon are all reporting this week—so yeah, it's kind of a big deal.

📊 Data drop: July’s jobs report and the latest inflation figures are on deck, giving investors more tea to sip on the state of the economy.

📈Markets rally, but watch out for August headwinds: Global markets are rallying after fears of an all-out trade war with the EU have eased, but don’t sleep on bearish August seasonality.

Let’s dive in.💦💦

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The countdown to August is heating up on the trade front. President Trump’s Aug. 1 tariff deadline is looming, and unless the U.S. locks in more deals with some of its biggest trading partners—including Canada, and Mexico—those countries could be staring down tariffs of 30% or more. Talks with China are also on the docket ahead of an Aug. 12 deadline, though that one’s widely expected to get kicked down the road.

Meanwhile, Trump is turning up the heat on the Fed as it prepares for its interest rate decision on Wednesday. Spoiler alert: Most expect the central bank to keep rates steady. But investors will still be glued to this week’s economic data, looking for clues on what comes next. Thursday’s personal consumption expenditures report will show whether inflation is still running hot, and Friday’s jobs report could add fuel to the “higher for longer” fire. The Fed’s made it clear: as long as the job market stays strong, don’t expect rate cuts anytime soon.

We’ll also get the first read on Q2 GDP. After a mild contraction in Q1, markets are eager to see whether the economy is back in the green—or still struggling to find its footing.

Despite all the big happenings this week, a look back at the past 20 years of strong S&P 500 uptrends suggests that there is an 80% chance the S&P cash index (SPX) will close within its implied 5-day range between 6254 and 6523.

Big Tech is stepping back into the spotlight this week, with more than half of the Magnificent Seven gearing up to report earnings—and they’re not alone. Heavy hitters across health care, crypto, finance, and autos are also lining up at the mic.

Meta kicks things off Wednesday, and Wall Street will be watching closely for updates on the company’s AI spending spree. Microsoft reports the same day, riding high on investor hype around its AI dominance. Then comes Apple on Thursday, where analysts are eager to see whether Cupertino is finally getting serious about catching up in the AI arms race. Amazon, fresh off a buzzy Prime Day, will round out the week’s Big Tech parade.

Outside the silicon crowd, Mastercard and Visa could offer a sneak peek at how consumers are swiping their way through summer. Procter & Gamble, Colgate-Palmolive, and Starbucks will drop clues about everyday demand and pricing power.

Over in the health care sector, earnings from UnitedHealth, AstraZeneca, Merck, AbbVie, and Bristol Myers Squibb could provide a broader check-up on the industry. And with Bitcoin back near its highs, Strategy and Coinbase step into the earnings spotlight Thursday. Lastly, Ford will give its update Wednesday as automakers continue to wrestle with tariff pressures.

👇 Below, we’ve got a cheat sheet of this week’s biggest names reporting, sorted by market cap (source: Unusual Whales).

For active traders looking for actionable insights, the highlighted columns show the implied (expected) post-earnings move for each company, along with the Average 1-Day Realized Volatility Post Earnings Ratio (1D RV).

📈Implied Move: The market’s best guess at how much a stock will swing after earnings.

📊1D RV: A powerful tool that represents the post-earnings price move divided by the expected price move over the past 12 quarters. In other words, it measures how good (or bad) the market is at pricing each company’s earnings.

💵When you see a ratio >1.0, indicates that, historically, the earnings are mispriced and the stock moves MORE than the market anticipates, favoring straddle buyers.

🪝A ratio <1.0 tells the opposite story, meaning the stock historically moves LESS than the market anticipates, which favors straddle sellers.

Happy hunting.

Seasonal Headwinds Are in the Forecast

After a red-hot July rally, the stock market might be flying a little too close to the sun. As this 20-year chart of the S&P 500’s average monthly performance from charts.equityclock.com shows, August (red square) hasn’t exactly been Wall Street’s favorite month after what is typically a strong July (green rectangle)—unless you’re a bear.

Over the past two decades, the S&P 500 has averaged a modest loss in August, making it one of the weakest months of the year. But just like the weather, forecasting seasonal trends is tricky. Seasonality can be helpful for planning—but it’s no guarantee. Momentum has been strong, especially in tech and energy. Still, if volatility starts to creep in (👀 VIX), don’t say history didn’t warn you.

So if you’re riding the July high, consider tightening your protective stops as we head into the final stretch of July.

The CBOE Volatility Index (VIX) has now spent 11 straight weeks below 20, and last week’s close below 15 was the first since early February. Until we see a reversal of this trend, look for the S&P 500 to remain true to its typical daily and weekly price swings.

Monday

• Key Earnings: Welltower, Waste Management, Cadence Design Systems

Tuesday

• U.S. trade balance (June)

• Key Earnings: Visa, Procter & Gamble, UnitedHealth Group, AstraZeneca, Merck, Booking Holdings, Boeing, Spotify Technology, Starbucks, Royal Caribbean Group, United Parcel Service

• Data to Watch: Retail inventories (June), wholesale inventories (June), S&P Case-Shiller home price index (May), consumer confidence (July), job openings (June)

Wednesday

• FOMC interest-rate decision

• Fed Chair Jerome Powell press conference

• Key Earnings: Microsoft, Meta Platforms, HSBC Holdings, Qualcomm, Arm Holdings, Robinhood Markets, Carvana, Allstate, Ford

• More Data to Watch: ADP employment (July), gross domestic product (Q2), pending home sales (June)

Thursday

• Personal consumption expenditures (PCE) (June)

• Key Earnings: Apple, Amazon, Mastercard, AbbVie, Comcast, Ferrari, Strategy, Coinbase, Bristol Myers Squibb, CVS Health

• More Data to Watch: Employment cost index (Q2), initial jobless claims (Week ending July 26), Chicago Business Barometer (July)

Friday

• Tariff deadline for Canada, Mexico, the European Union, and other trading partners

• U.S. employment report (July)

• Key Earnings: ExxonMobil, Chevron, Colgate-Palmolive

• More Data to Watch: Consumer sentiment - final (July), construction spending (June), ISM Manufacturing Purchasing Managers Index (July), S&P Manufacturing PMI (July)