S&P 500 up despite tariff concerns, Powell hints at possible future rate cuts

From Yahoo Finance: 2025-07-02 00:01:00

As of the halfway point of 2025, the S&P 500 is up 5.4% despite a 19% drop in April due to Trump’s tariff announcement. The Fed has not cut interest rates, citing tariffs as the reason. However, Powell hinted at possible rate cuts in the future.

The S&P 500 hit a record high for the first time in over four months, indicating reduced market concern over tariffs. Effective US tariff rate is now 13%, up from 3% at the start of the year. Powell attributes lack of rate cuts to trade turmoil.

Core prices rose 2.7% in May, slightly above the Fed’s 2% target. Mixed labor market signals with rising job openings but falling hires. Manufacturing contracted for the fourth consecutive month. Fed may cut rates to stimulate economy and borrowing.

Rate cut at Fed’s upcoming meeting seems unlikely, with a 78.8% chance rates will remain steady. Powell hints at possible rate cuts later in the year. Jobs data to impact Fed’s decision. Markets prepare for the second half of 2025 amidst economic uncertainty.

Read more: Powell Blames Rate-Cut Delays on Tariffs