Tariffs, Schmarriffs

Market Report for Thursday, July 17, 2025

Tariffs, Schmarriffs

Markets made new highs Thursday, further embarrassing the recession forecasters still yelling “Fire!” in a theater now selling standing-room tickets. Evidently, Wall Street misplaced the memo proclaiming the end was nigh.

Level Change 7/17/25 (%)
– – – – – – – – – – – – – – –
+0.5 Dow
+0.8 Nasdaq
+0.8 Nasdaq 100
+0.5 S&P 500
+1.1 S&P 400
+1.1 S&P 600

It’s been a bruising stretch for bears.

On April 8, with stocks scraping their lows and tariff fear at fever pitch, they stood tall and solemn, predicting imminent recession. Since then, the S&P has rallied 26%, making fools of forecasters and turning index investors into reluctant geniuses. Undeterred, bears have recycled their prophecy for higher prices — same warning, different altitude.

And yet, the climb continues.

Thursday gave bulls a refill, thanks to American consumers indulging their national pastime: spending like tomorrow’s paycheck is guaranteed. June retail sales beat across the board, and the “control group” — the Fed’s favorite GDP proxy — posted its best gain since March. Nobody told the mall there’s a slowdown.

Initial jobless claims fell for a fifth straight week, down to 221K. That’s the lowest since April, suggesting that, despite doomsday tariff talk, employers are still hoarding workers like toilet paper in 2020. Continuing claims even slipped below consensus. So much for cracks in the labor market.

No shift in the rate-cut story, though market pricing tilted a touch more hawkish, now projecting 41 basis points of easing by year-end. The Fed has been assigned the role of monetary Hamlet: to cut, or not to cut. With strong economic data and political pressure competing for center stage, Powell may regret not spending July in Iceland.

Speaking of pressure, President Trump offered mildly constructive remarks on trade talks with India and the EU. This saga drags on, though the script is exhausted and the cast appears to be checking their watches. Europe, reportedly working up tariffs on US services, seems ready for a second act, but this diplomacy-as-drama looks one rewrite from cancellation.

With the supposedly bad news now more than three months baked in, stocks rose. Nvidia (NVDA +1.0%) led the charge, a reminder that when in doubt, buy the GPU overlord.

So ended another session where nothing changed and stocks rallied. Bears insist it’s all built on sand. But as of Thursday, it’s a record-breaking, profit-spitting, job-holding, tariff-dodging sandcastle — and it’s holding just fine.

— Jason Kelly