Stan Choe, AP Business Writer
NEW YORK (AP) – US stock indexes are drifting Monday after the US agreed to tax cars and other products coming from the European Union at a 15% tax rate. However, many details are still resolved. Wall Street is heading for a week filled with potential flashpoints that could shake the market.
The S&P 500 fell 0.2% in afternoon trading after setting its all-time highs every day last week. The Dow Jones industrial average was 142 points (0.3%) as of 2:22 PM Eastern time, with the Nasdaq Composite 0.2% higher, falling off its own record.
Tesla added 3.4% after CEO Elon Musk signed a deal with Samsung Electronics. Samsung’s stock in South Korea rose 6.8%.
Other companies in the chip and artificial intelligence industry are strong and have been running since last week after Alphabet said it is increasing its spending on AI chips and other investments to $85 billion this year. Chip Company Advanced Micro Devices rose 4%, while server manufacturer Super Microcomputer rose 8.6%.
They helped offset the 8% drop due to revvity. The company of the Life Sciences and Diagnostics business reports that profits for the most recent quarter are stronger than Wall Street expected, but its full-year profit forecasts were disappointing.
Companies have been under pressure to bring about solid profit growth following a massive jump in stock prices over the past few months. Much of the profits came as Trump wanted to return some of his tough proposed tariffs, and critics say the broader US stock market would look expensive unless businesses generate greater profits.
More fireworks may be ahead this week. “This is just as busy as a week,” says Chris Larkin, managing director of Trading and Investing at Morgan Stanley’s e-Trade.
Hundreds of US companies line up, reporting how much profit they made in the spring, and nearly a third of all businesses on the S&P 500 Index will be offering updates. This includes market heavyweights from Apple, Amazon, Meta Platforms and Microsoft. These companies are growing so much that inventory movements can pretty much determine what the overall S&P 500 indexes do. Microsoft alone is worth around $3.8 trillion.
On Wednesday, the Federal Reserve will announce its latest decision on interest rates.
Trump has been angrily sought the Fed to cut interest rates. This is a move that could improve the economy. But Fed Chairman Jerome Powell argues that before the Fed makes the next move, he wants more data on how Trump’s tariffs are affecting the economy and inflation. Lower interest rates could drive inflation, and the economy has recently emerged from scar runs where inflation temporarily exceeds 9%.
Wide range of expectations on Wall Street is for Fed officials to wait until September for interest rate cuts to resume, but several Trump appointees could challenge the vote. The Fed has put on interest rates this year since it was cut several times at the end of 2024.
This week will also feature some potential market moving updates regarding the economy. On Tuesday, we will be reporting on how confident our consumers are and how many jobs our employers are advertising. Wednesday provides the first estimates of how quickly the US economy grew in the spring, with economists hoping to see a slowdown from the first three months of the year.
On Thursday, the latest inflation measures the Federal Reserve likes to use will arrive. A modest read can give the Fed more room to cut interest rates in the short term, but someone who is hotter than expected may be more careful about it.
And Friday will provide an update on how workers employed in June hired more workers than were fired.
Treasury yields are relatively stable in the bond market prior to all of its actions. The 2010 Treasury yield extended from 4.40% in the second half of Friday to a maximum of 4.41%. The two-year financial yield, which tracks more closely the Fed’s expectations for action, rose from 3.91% to 3.92%.
Overseas stock markets have penetrated Europe following the announcement of trade contract frameworks.
China’s stocks rose as officials from the world’s second-largest economy prepare to meet with the Swedish US delegation for trade talks. Stocks rose 0.7% in Hong Kong and 0.1% in Shanghai.
The index was mixed into other parts of Asia, where Japan’s Nikkei 225 fell 1.1% in one of the world’s major losses.
AP Business Writer Elaine Kurtenbach contributed.
Original issue: July 28, 2025 10:14am EDT
